We have discussed the Grid+ rollout in phases of customer acquisition and expansion (Edison, Tesla, Musk), but today I want to provide more detail into the development and operational milestones that will occur over the coming months (and, in some cases, years). Although the implementation details are always evolving, we maintain a consensus on high level objectives.

Step 1: Soft Rollout

Although we are building the future of energy and dream of smart batteries selling their solar power throughout a virtualized smart grid within the existing grid, we are tackling the challenge step-by-step. Grid+ wants to first establish a customer base, design a functional and sufficiently abstracted backend, and build our brand as an innovative team that delivers and moves the needle forward.

To that end, the logical first step is to establish a retailer. This retailer will offer basic flat-rate as well as time-of-use electricity plans. These bills will draw down from customer accounts made from pre-paid deposits. Although cryptocurrencies will not be used for real-time settlement in this system, Grid+ will allow payments to be made in USD, ETH, and BTC. These payments can be made whenever the user chooses, meaning users are not constrained by a monthly bill. GRID redemptions will be honored in this first utility as well as in future products and plans offered in subsequent utilities.

In summary, here are the benefits to consumer:

Pay your bills in cryptocurrency! Pre-pay for electricity whenever you want Redeem GRID to offset markup costs Solar integration

It is important to note that in developing this basic retailer, Grid+ will build the core backend billing infrastructure, which can be reused when integrating the crypto-based backend. Architecturally, the billing system looks like an event-sourced database that maintains balances for each customer, a module for processing payments, and a third module that manages drawdowns of credit from deposits. As we move to a crypto-based architecture, this last module is modified, but the core billing and payment processing modules are used in both systems.

In order to get this initial retailer off the ground, we must tackle some items in our critical path:

Get a REP license in Texas and establish a legal entity. This requires about $1.5M collateral, a licensed Manager of Utility Operations, and some legal consultation. We expect this to take 3–6 months and we intend to begin the process in the coming weeks. We’ve already begun fielding candidates for the position. Form partnership with wholesaler and scheduler. One of the major benefits of doing a soft rollout is that integration with the legacy grid is much less complicated. If we are offering flat pricing and simply want to run a REP, we can partner with an energy service provider to purchase smaller blocks of wholesale energy. Design a generalized billing system and initial modules. We will be architecting and building our core infrastructure, which is standard development work. Additionally, the modules outlined above will need to be built out. I believe the scope of this task is small enough to handle with our existing team, but we may add team members asynchronously as we gear up for later development milestones.

With these milestones in mind, we are targeting a rollout of a basic REP in Q2 2018. We are already fielding pre-commitments for future customers in Texas. If you want to pay your bills in crypto, redeem GRID, or generally support the project, you can sign up to be notified when we can offer services to your zip code.

Step 2: Agent

The second phase of the Grid+ rollout will include v1 of the crypto-based system we have discussed at length in recent months. This will include the agent, a small device capable of making individual demand predictions using the smart meters. This agent will purchase energy primarily on day-ahead markets to meet the expected demand using a cryptocurrency (ETH or BOLT) signed over a state channel. Prices in this model are dynamic so if predictions are accurate, the customer can save substantially on his or her bills.

Added benefits of the agent architecture to the consumer (relative to the basic model):

Real-time payments using cryptocurrency. This means customers can deposit to their agent directly — they are in full control of their funds. Enjoy reduced electricity costs. If you have a battery and access to its charge/discharge cycles, you can program it to sell in the evening and potentially earn significant revenue. Build intelligence into your device to make smarter purchases over time. Begin establishing support for smart devices such as a NEST or Tesla charger.

Once ready, the agent-based system will be introduced as a sort of premier membership. This will require the customer to purchase an agent up-front, but we expect this plan to reduce the customer’s bills over time such that the device easily pays for itself.

It is important to note that this phase of the rollout will take significantly longer than the first one and as such, we will be designing and developing the agent device in parallel. Here is what is required to transition from Step 1 to Step 2:

Design the agent hardware. This includes designing the production board and case, firmware development, security testing, and manufacturing the device. In total, we expect this will take 6–9 months. Build the agent client software. A very early version of this is available on our github page, but this will need to be further developed. The agent client manages a connection with the Grid+ hub and queries/pays bills. It must be capable of predicting a customer’s future use and make purchasing decisions based on those predictions. It must also leverage the device’s secure signing environment to sign arbitrary messages. Development will take 3–6 months. Build the new billing middleware. As discussed previously, the agent architecture requires a new server-side module to interface the agent with the existing core billing system. This is a relatively small task and should take 1–2 months. Design prediction algorithms. To start, the agent will be capable of basic demand predictions using an algorithm designed in-house. We are hiring a data engineer to build and extend the algorithm and pipeline. It is difficult to estimate the amount of time this will take, but a basic algorithm should be production-ready in 2–3 months and this work will be parallelized with other efforts.

Step 3: SDKs and battery integrations

Once the harder launch is rolled out (i.e. the agent system is tested and is out in the wild), we can start optimizing! Here is where decentralization really benefits our business model. We will open our software stack to outside development in a series of integrations.

Battery Integration SDK

The first prerequisite to the transactional grid of the future is having a control mechanism (i.e. battery network) that is intelligently managed. Until we integrate with home batteries, any arbitrage opportunities have to be seized by users manually. We will need battery integrations, but because there are various battery manufacturers with unique API interfaces, we would have to add each of them. If only we could parallelize development…

Well, this is what an SDK is for. We will allow battery manufacturers or properly incentivized crowd participants (hint hint: bounties) to develop bridges between each home battery (or electric vehicle!) and the Grid+ agent. Once established, the Grid+ agent can manage charge using standardized inputs and pricing data. Any user who owns a battery will have an option to search for their battery and integrate it with their agent using a simple to use mobile app or web interface, which aggregates all of the third party integrations. This will look like the App Store of battery drivers.

Load Prediction SDK

Another avenue for a bounty program will include AI developers designing pricing algorithms. Users will be given the option to open source their (anonymized) usage data and allow the crowd to design optimized predictive algorithms.

Platforms like Kaggle and, more recently, Numerai have leveraged crowd-sourced AI algorithms trained on anonymized data for production systems. These algorithms are generated by the crowd using training data, with the best algorithms winning a prize. In a similar vein, Grid+ will open our demand prediction algorithm to the crowd. Data scientists around the world will compete to create the best algorithm and will be paid a monthly stipend by Grid+ to license the algorithm if it is used in our production system. In this way, the best algorithms bubble up to the top and the best developers see more revenue.

Step 4: Localized Pricing and P2P Payments

All of the above steps get us to a place where we have a smart grid. We expect this setup will incentivize customers to purchase more solar panels and batteries and start earning revenue. However, there is a missing piece — we are still the centralized the price setter and the counterparty on every transaction. This is a market inefficiency that can only be remedied by peer-to-peer price-setting and payments. This is the phase at which Grid+ truly shines.

In the last phase of platform development, we must build a more granular pricing map. This will require Grid+ to work with regulators to create dynamic pricing structures and tariffs for the distribution infrastructure. In the end, we want to be what connects the smart grid of the future to the legacy grid of the past. We want to facilitate a smooth transition into the decentralized grid we wall want.

The development of this pricing model will be difficult. We will need to ensure that load always matches supply and design the system such that we don’t lose money when the price drops below wholesale rates. This part of the roadmap still needs more ideation, but we will get there.

As for p2p payments, recall that peers are connected to one another through one hop on the Raiden network (because they are all connected to our hub). We are thus able to facilitate micropayments p2p over state channels.

Building the future

We hope this post gives more clarity to our immediate priorities and our roadmap over the next two years and beyond. Things will no doubt change, we will learn responses to new problems, and we will make mistakes. Keep in mind that our long term goal is building the grid of the future. Though this is a lofty ambition, we feel it necessary to take concrete, iterative, baby steps to get there. We’re ready to begin building as soon as possible and ideate along the way.

If you want to learn more, go to https://gridplus.io.