How Electron is using blockchain to disrupt the energy sector

Okay, I'm Jon Ferris, strategy director at electron and we develop blockchain systems for the energy factor Yes the energy sector is facing a lot of transformation whether it's decarbonisation decentralization as generation moves towards a consumer and digitization and there's a growing need for coordination and collaboration among the various parties

We are looking to apply blockchain to the underlying problems of the data that needs to be shared amongst those parties in order to create a platform that will allow innovation over the next 10, 20 years as the industry evolves Okay, and so what problems is it that you're solving that haven't yet been solved? Well we've got two main projects looking at two different problems one is just the sharing of data no one knows no one has a complete end-to-end view of what's connected to the grid which might sound absurd but the way though that the grid is has been sectioned off into different parts there's good visibility in one area of large scale generation distribution companies are finding it more challenging to understand what's connected to their networks because 5-10 years ago it was dominated by fairly homogenous consumption particularly at the residential level Now there's more and more generation that's going in on the distribution networks behind the meter There are assets behind the meter that are controllable and a lot of the data around these assets is being held in silos; is being duplicated in ways that that, that you don't have visibility and people are trying to operate in balance network don't have visibility of the capabilities of the assets connected to the network so one project we're working on is a platform where the owners of that data can share it They're incentivized in a way that doesn't happen today to make sure it's accurate and they're incentivized to share and are rewarded for sharing our data the other platform that we're working on is flexibility trading

At the moment the way the industry has developed the wholesale market is traded on the transmission network where generation used to dominate The forecasts are that over the next five years the majority of generation could be on the distribution network much closer to the consumer and yet there's no platform there's no market that allows the consumers to actively engage with with the wholesale markets and bring flexibility And that's needed because the increasing levels of renewable generation and the closure of the fossil fuel power stations that bring flexibility from the generation side are disappearing in order to decarbonize the network Flexibility has to come from somewhere and consumers can bring that flexibility if there is a pathway for them to do so So we're developing a flexibility trading platform with a consortium of some very large and very small energy players which is one of the the great attributes of a blockchain based platform but it's not dominated it's not owned by one large central party it's not dominated by the largest it brings this ecosystem together and that can enable the demand side and consumers to bring flexibility to help balance the networks and to help integrate increasing levels of renewable generation on the grid

So you said that decentralization is a key part of why using blockchain systems is useful Are there any other reasons why this is a better way to do it than what exists currently? It's a method that mirrors what's happening at the underlying physical level that we are seeing decentralization of on the physical worlds So a decentralized digital layer matches that in a way that the decentralization of the assets is very difficult to coordinate from a from a centrally controlled top-down approach which has historically been being the way the industries run So we definitely see a opportunity to to a mirror both the physical and the digital worlds to help balance the system at different levels so whether it's behind the meter at a local level and all of that requires coordination and collaboration and and it can't happen when you have a central incumbent counterparty that it is potentially going to hold back innovation The industry is developing in in ways that no one can foresee in the last 5-10 years it's changed beyond all recognition and that's going to continue so we need an environment where innovation can can take place where innovators are free to experiment and in in traded markets liquidity will go to to the best products and whatever they are and anyone who thinks they know what the industry is going to look like in five years time is probably going to see a few surprises

And what stage you are at? At the moment we've developed proof-of-concept platforms we're hosting a hackathon shortly where we've got great interest from across the industry whether its suppliers generators software developers service providers metering companies that are going to come and interact with our asset registration platform and we see that as being one of the first steps of engaging and educating the industry around what they can do with with an open platform that isn't currently possible the way the industry is currently structured Why not? Because the open platform and open standards enables the data to be shared amongst parties they can bring their data and can open it up to other parties and and find ways to monetize that data in in ways that wouldn't be possible if they held it in their own silos And obviously the energy sector and ownership of data are both really hot topics at the moment Are you seeing any resistance to what you're trying to do? We see some questions There's certainly a lot of a concern about data privacy and how the data can be used: who can own that data but again we see a blockchain based platform as being one of the solutions and and in the long term an asset register that works across different industries can change the way the industries are regulated from a vertical industry basis to the consumer owning their data, having control over their data and perhaps a move towards a more a more horizontal form of regulation where that the retail side is regulated across industries the consumer data side is regulated and it's a way to change the way we think about data and for the consumer