18
Feb
2019

Blockchain technology as the new revolution for the Energy industry

We interviewed Oriol Pujodevall, Head of Business Development at Energy Web Foundation, who explains us in the book Empodera por las ODS how Blockchain technology is changing the reality of the energy sector. Oriol started his career developing decentralized solutions for the generation of energy in rural areas of Africa, an experience that sparked his interest in Blockchain technology, following the creation of the first educational online program in Blockchain for the energy sector. After all this dedication and social venture, Oriol is convinced that Blockchain will take the energy field to a new paradigm.

Oriol, tell us how was Energy Web Foundation born and what is the philosophy behind it.

Blockchain as a technology has a lot to offer to the energy sector. Processes such as the energy bill collection, energy certificates’ purchase and sale, or the way in which prosumers interact with the electricity grid can be largely be optimized to by implementing blockchain-based applications.

However, until now, many projects have failed (or experienced many difficulties) when ascending, due to two very definite reasons. In the first place, due to pure technological limitations, since the existing blockchain platforms were not prepared for energy applications (these applications need to withstand large volumes of transactions per second, and guarantee privacy standards that were not possible so far). Secondly, due to the lack of a regulatory framework that would help these applications reach a commercial stage.

The Energy Web Foundation was born precisely with the aim to solve this congestion, addressing the problem from two different angles:

  • Build a public and open blockchain specially designed to meet the energy industry’s needs. The Energy Web Blockchain will act as a market standard, providing a solid base on which electric companies, start-ups and other energy sector’s actors will be able to develop and run their applications and products.
  • Develop an ecosystem of pioneering companies in the energy and blockchain field, and bring them together around the platform, in order to promote knowledge transfer and shorten the market entry time for all the developed applications. In this ecosystem (of around 100 organizations in July 2018), we have a great variety of energy stakeholders, among which it is possible to find from generating companies, to network operators and regulators.

Blockchain and decentralized energy generation. Will we citizens be able to self-produce and share our own energy in the future? How to explain what is to come to people who do not know what the Blockchain technology is?

The electrical network’s stability is a critical factor. The network has a limited capacity, and an excess of electrons at a given time could easily collapse. A big part of the traded energy is bought/sold a whole day before it is generated/consumed. This system, although it has properly worked so far, is clearly inefficient, and prevents the network’s access to a large amount of renewable energies (that can be distinguished among many other things, from fossil fuels by their more difficult to predict generation curves).

Blockchain can solve this problem. In the future that we are building, all the devices that consume or generate energy will be connected not only to the electrical network, but also to a virtual blockchain network. These devices will be able to bid in the electricity market, sell energy to other devices and help the network operator to stabilize the system. Among other things, this will increase the knowledge we have at each moment about what is happening in our electricity network, allowing us to reduce the sale-generation time interval from one day to minutes only. Thanks to this, we will be able to count on a greater volume of renewable energies, which will allow commercial prosumers to count on the energy they generate.

Let’s talk about the real effect of blockchain technology. How can it transform the society as we know it?

If we see social transformation as the next level of our evolution, then blockchain would be the bridge that takes us up to that level. Block chains will act as the infrastructure on which to build applications based on technologies with much more defined purposes, such as artificial intelligence or machine learning.

The range of applications on which blockchain can play a disruptive role, is almost endless. Outside the energy sector, work is done in diverse fields such as electronic voting, medical records, digital identity, shared economy …

Practically any opaque process, or with little transparency whose lack of reliability when managing data is generating problems, could be optimized by using a blockchain.

In your opinion as an expert, what will make out of our cities real “smart cities”?

Beyond a purely technological factor (connectivity, data collection, machine learning algorithms, and so on), what will define a Smart City is the perfect harmony between the city and its citizens. Through the application of new technologies, much more information is available, and as it is commonly said: information is power. Now, to whom does this information belong? We have to ensure that all generated information belongs to its rightful owner, allowing that person to even monetize it, if he wishes so.

Do you think governments are prepared to decentralize the energy resources that have been so lucrative for electricity companies?

Everything is ready. Not only governments, but the electricity companies themselves see this new set of technologies as a way to explore new business models. The energy sector is changing, we are moving towards a decarbonisation and digitization of an industry historically marked by its slowness in terms of innovation. Today, there are more than 300 start-ups working in the blockchain/energy field, and there are already several energy regulators interested in knowing how they can use blockchain to optimize their processes. The first regulatory agency that joined the Energy Web Foundation, The National Energy Commission (CNE) of Chile, is already using its own blockchain-based application! None of the things we are talking about is science fiction.

With so many blockchain projects ranging from social impact initiatives to opportunistic marketing strategies, it can be difficult to discern. In this revolution, is everything what it seems to be?

Some projects’ commercial success has caused a tsunami of initiatives aiming for the same goal. We are living a similar revolution to the .com fever, with the differential factor that now there are financing mechanisms that allow these companies to raise large amounts of capital in a short time.

Nothing is what it seems to be, and those projects that are more based on marketing than on good services end up collapsing under their own weight.

The Austrian company Wien Energie is already participating in a pilot energy exchange project with two other companies. Could this actually happen in Spain?

Several Spanish companies have already participated in P2P energy exchange projects. Iberdrola is already part of the Energy Web Foundation, and there are several leading companies in the sector that will join their efforts to our ecosystem in the up-coming weeks.

A lot of innovation will be seen in Spanish territory in the remainder of the year.

We are passionate about the idea that local communities share energy with each other, that citizenship is the center of this innovation. Do you work accordingly with the Sustainable Development Goals?

The Energy Web Foundation’s mission is to decarbonize, democratize and decentralize the energy sector. All our efforts are now focused on creating a public and open market standard so that all the other projects that will help our society to get to the next level, can come into existence as soon as possible.

How can someone become part of the Energy Web Foundation community if eager to?

Any company, organization or individual with interest towards the energy sector’s revolution is welcome to the Energy Web Foundation. You can find more information about our work on our website Energy Web Foundation.

What are your goals and next steps? Define the essence of your work and your research in a sentence.

In my view, a revolution is not complete until everyone is on board. My team and I will continue working to educate the energy industry about the use of blockchain, in order to accelerate the well-deserved electricity sector’s arrival.

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