Blockchain Technology Makes Decentralized, Regenerative Electricity a Possibility

ChainNews

In 2018, blockchain technology welcomed a wave of breakthroughs in the global energy industry.

One Singapore-based blockchain power supply project, Eloncity, jumps out of the box of what early starters of blockchain-based electricity supply industry was doing: using the model of the peer-to-peer power trading platform to deal with the issue of electricity.

Eloncity sought to build community infrastructure power facilities by using the “ application of decentralized new energy power supply and power storage equipment” and gradually complete the group grid connection within the micro-community smart grid. This would, thereby, establish a decentralized electricity supply and trading market. In this process, we can fix industry weaknesses, balance the public power supply and demand, and accelerate the production of renewable energy.

Trend: Energy Distribution

The statement, “the global fight of our century today is the fight for energy and resources” has been around for decades. And it is not a joke, nor is it an exaggeration.

Within the context of global economic integration, the effect of fluctuation in energy prices on the international situation and also on single country economic crises cannot be overlooked. Establishing a distributed (fragmented) and renewable energy system is one of the ways in which countries are trying to shake their over-dependence on already scarce energy resources.

However, in most major developed countries, consumers can freely choose the most cost-effective electricity producers and power distributors on the market. But since the traditional electricity supply has adopted a centralized power supply mode with few participants and oligarchy stands strong, transmission-related standards are difficult to unify. Additionally, local government lacks long-term insight on renewable energy’s promotion. This allows interest groups to fight to determine prices, thereby causing electricity prices to fluctuate chaotically and network costs to rise.

In addition, in the traditional retail network supply, electricity supply and demand management has adopted a method of centralized forecasting. Obviously with factors such as time, season, weather, and cultural background, there is a real-time difference in dynamics in electricity supply and demand. But most electricity supply systems only operate a few months ahead and use rough price differences estimates when addressing the electricity supply and demand issue. The general public, therefore, cannot smartly use their energy, which only serves to exacerbate the peak and valley effect.

Centralized power generation, distribution, and sale model; Poor management of power supply and demand, confusing calculations for power pricing, and an inability to accurately match power supply and demand in real time all converge to create a huge waste of resources and electrical energy worldwide.

For these reasons, achieving a decentralized renewable energy supply and deploying distributed renewable energy has become the common trend of every country trying to strengthen its competition for energy.

This trend provides a feasible basis and extensive support for the application of blockchain technology within the energy industry. In the traditional power industry, many professionals and interest group have started considering how to modify the presently centralized and monopolistic grid and how to implement a modernized grid that features a new power industry business model.

Nowadays, energy blockchain projects that with deep research on distributed energy and sustainable plan, not only gained the support from venture capitals and cryptocurrency investors, but won the attract multinational industry giants.

(Note: Japan East made early investments in the start-up company, Eloncity, and hopes to develop shared grid based on blockchain technology. The German peer-to-peer platform, Conjoule, has also gained the support of German traditional energy enterprise, RWE, as well as Japan East.

Blockchain technology scenario applications: Peer-to-peer trading

Emerging application scenarios for blockchain technology in today’s electrical power industry are reflected in peer-to-peer trading.

Peer-to-peer trading can greatly enhance the purchasing autonomy of electricity consumers, reflect real prices of electricity, help electricity consumers consciously use energy, and also reduce the complexity of network traffic.

These are the common practice that early energy blockchain players have followed since 2017. Drift Energy, as well as Power Ledger, Conjoule, Grid, and other projects all set up peer-to-peer blockchain electricity trading platforms — the first step to entering the electrical power industry.

At current stage, the power trading platform built with blockchain technology can remove the middle portion of power trading progress. Electricity consumers can freely switch to cleaner electricity providers, or use providers with more competitive prices. Individuals and businesses can directly conduct safe and quick power transactions on such platform.

Blockchain technology can lead to an integrated distributed energy transactions and supply systems. It does this by directly connecting energy producers and consumers, which significantly reduces the cost of electricity and improves transaction efficiency. This allows electricity producers, transmission grid operators, distribution network operators, and energy retail service providers to engage in multi-level transactions, and simplifies the complexity of our current power system.

Blockchain technology puts its inherent quality of not being able to be falsified to use in the recognition of carbon power and in the certification of renewable energy. Blockchain technology can directly track and record the transactions of renewable energy, thereby, provide credible transactions.

Using blockchain technology in the construction of an electrical power trading platform is, in a sense, an upgrade to the current technology in the power trading market. This upgrade will solve issues in today’s centralized energy industry, and make transactions more “flat.”

But in the current power system, the calculation for the cost of distribution network is extremely complex. In order to achieve data sharing and a dynamic balance of the power system, the information collection needs to have finer scale and a higher sampling rate. There is a high demand on data quantity and calculation speed. And obviously, current blockchain calculation and transaction speeds cannot support that.

In-depth application of blockchain technology and the smart use of energy and storage systems

To achieve a decentralized and renewable energy supply and avoid energy waste caused by inefficient management, we need more than just a virtual decentralized power trading platform.

Whether or not it is possible to build a “continually developing and balanced community renewable energy supply and demand ” is one of the rules to consider when evaluating if blockchain technology has the potential to secure its value and development within the energy industry.

If we want to solve the power industry’s most basic problem — decentralized production — and achieve a truly smart supply and demand distribution of energy, the waste of energy and resources that come from lack of planning has to be eliminated. To move towards the distribution of renewable energy, We also needs to determine most appropriate option and plan a suitable course of action to apply blockchain technology in power industry

To ensure the stable operation of global power facilities, a centralized power generation hub and electricity distribution system is of utmost importance. Up until now, every country has been pouring itself into smart grids, hoping to effectively separate the supply and demand of electricity. By using community micro smart grids as a basic supply unit, we can gradually fulfill the concept of a “community surrounding the city” and overturn the current power system’s “instantaneous balance of supply and demand” principle. We would then accomplish flexible and interactive electricity usage and revolutionize the operation of traditional power systems.

The smart electricity grid is a complete unit that consists of generation, supply, power transformation, distribution, utilization, and scheduling. It is a complete, smart electrical power system. If we want to achieve flexible and interactive electricity usage on smart grids, then the smart use of multiple energy sources is an important prerequisite. And if we want to conscientiously use multiple energy sources, then we need more modern power storage technologies.

Storage technology can effectively separate the production and use of energy. Power grid planning, design, layout, operation, management and application all go from power transmission efficiency to conversion efficiency, thus, breaking the traditional principle of instantaneous balance of electrical supply and demand.

Simply speaking, storing energy can achieve an efficient demand-side management of power to reduce the peak and valley effect, thereby improving overall operational efficiency and decreasing operational costs. In the event of a natural disaster or a large-scale human-induced energy crisis, energy storage equipment can become an emergency energy source. In addition, energy storage technology has great potential for application due to being able to adjust power capacity of various power sources, as well as it enhancing the effectiveness of renewable energy,

In the future, distributed hybrid energy systems will become the global trend. With the continuous development of new energy technologies, renewable energy sources such as solar energy and small wind turbines will all use distributed systems to supply energy to the community. Millions of community micro smart grid will also become an important component of distributed hybrid energy systems.

Having community micro smart grid as the basic supply unit will help to gradually reduce dependence on major energy supply grids. Community-wide electricity prices will undergo a peer-to-peer supply and demand adjustment. This will, at the same time, also facilitate the widespread use of distributed renewable energy sources, and will conserve the earth’s resources.

Obviously, blockchain technology will provide an increase in technical support for the construction of distributed renewable energy smart systems across the globe.

Eloncity will provide clean energy solutions

Unlike other blockchain projects, Eloncity, whose blockchain electricity project recently launched in California, has been looking forward to solving end-of-pipe issues within the global energy system.

Eloncity founder, Andy Li

Andy previously led ChinaCache to build the content distribution network (CDN) Internet infrastructure. CDN is analogous to the networks of decentralized energy resources on the energy infrastructure. Andy also led Alibaba Cloud Computing Data Center Architecture team to pioneer the application of direct current (DC) power system for mega data centers in Asia. Additionally, Andy mastered the network traffic engineering at Cisco System. His work helped to realize the system intelligence at the edge of the network, which is significantly superior to the traditional core distribution networks. Since 2014, Andy has been leading POMCube Inc. to develop intelligent networked battery energy storage systems (“BESS”). POMCube Inc. will be one of the Foundation’s technology partners in implementing the pilot Eloncity model microgrids to demonstrate the open standard ECTP. Later in 2018, Andy founded Eloncity with the hopes of using blockchain technology to transform renewable energy sources. His desire is to make renewable energy more convenient and economic and, thereby achieve worldwide energy conservation.

Simply put, Eloncity is built on high-efficiency energy storage systems deployed through smart networks that create micro smart grid for the community. This will provide an ideal solution to the storage and distribution of renewable energy, which is totally flexible and with strong support on balancing supply and transactions.

Eloncity took note of the current operational deficiencies of renewable power in North America. government invested a great deal in subsidizing rooftops photovoltaic solar energy, but did not build energy-storage equipment. The large amount of energy generated by photovoltaic roofing cannot be traded due to a shortage in demand, resulting in energy waste and high energy prices.

Eloncity believes that the use of constantly evolving battery storage technology, photovoltaic arrays, small-scale wind-powered generators, and renewable fuels can be the major an energy source in the communities. The deployment of new electricity facilities will help more communities to build decentralized micro smart grid, to balance the local regenerative energy supply and demand. Intelligently connecting local micro smart grid will form a city-scale energy system, ushering in an era of decentralized renewable energy.

Energy storage equipment and technology are very important in Eloncity’s solutions. Energy storage will give community residents greater freedom to use micro smart grid, and will also reduce electricity costs (including network maintenance costs), simplify the exchange of electrical energy, provide a network partition, in order to minimize the negative effects of the network and improve electricity safety for users.

For some newly developed communities that located on the outskirts of large city networks, Eloncity’s power solutions will solve their supply problem by building transforming facilities, expanding distribution network. For small communities already connected to the larger network, Eloncity also has solution planning to help with modification and increase efficiency. Community users will see a clear difference in the prices between local renewable electricity and commercial renewable electricity.

To accomplish Eloncity’s clean energy project, Eloncity will provide royalty-free Energy Network Protocol (ETCP) as well a variety of electricity storage facilities for different applications. Eloncity Grid Foundation will divide into more micro, community smart networks so that by using efficient energy exchanges, more regional network users will become self-sufficient.

The core of ETCP is a blockchain-based transaction system. Real-time inter-network fair trading prices are suggested based on AI calculations. Dynamic pricing and real-time electricity transactions are completed using Eloncity’s issued ECT (encrypted token). Additionally, ECT’s intrinsic value will be reflected in Eloncity’s own power storage systems.

Customers who purchase protocol compatible energy storage appliances (such as POMCube and NetZero) can earn ECT, through energy storage and transaction. ECT can be used as subsidy, can also encourage the community to support Eloncity’s energy network protocol. ECT can further reduce the cost of energy storage equipment.

Currently, Eloncity has deployed its own prototype project in many communities in North America

Andy Li, the founder, believes that blockchains based on public sharing and consensus is crucial for the future of forming collaborative and decentralized renewable energy. The blockchain industry’s economic certification will become an effective catalyst for promoting electricity consumers, service providers, technology providers, financial partners, local governments, public organizations, and all other shareholders to participate in this revolutionary change that lead to a safer, cleaner, and economic energy consumption.

Eloncity expects that clean, renewable electricity will become the world’s primary source of “one time energy.”

For more information on Eloncity’s clean energy and to download the white book, please refer to: http://eloncity.io/