Energy is the beating heart of modern civilization. Petroleum powers the vehicles that take us around and the supply chain that bring us our goods from around the world. Coal and natural gas generate the electricity that power our homes and machines, including what you’re reading this article with. The system works so well that we have endless reliable power in our homes, freedom to go anywhere we’d like, and fresh foods and products from everywhere in the world no matter what time of the year.
At least in the major industrialized economies, that is. A billion people around the world have no access to electricity, and three billion people do not have clean fuels for cooking. Theirs is a preindustrial life of suffocating fumes around a hearth and darkness at sunset. Even in the advanced economies, places like Puerto Rico experience regular blackouts which
Meanwhile, greenhouse gas emissions from fossil fuels is causing climate change in many parts of the world and sectors of the economy. As Greenhouse Gas emissions and climate change are inextricably linked to energy, many of our initiatives in the Climate Action and Accounting SIG also relate to energy.
At the same time, the energy industry is undergoing significant changes of its own. New technologies such as renewables, storage, and electric vehicles as well as IOT and advanced metering infrastructure promise a fundamental change to how energy is produced and consumed. All these changes have some element of a transition from centralized to distributed and from analog to digital models. As a result, blockchain or distributed ledger technologies (DLT's) are well suited for facilitating the energy business models of the future.
Therefore, we've decded to form this Energy Working Group to focus on energy industry DLT applications while advancing climate action.
Energy and DLT's
At a high level, we see the following key trends in the energy industry today:
- Renewable energy generation - The cost of renewable energy, including wind and solar, have fallen so much that they've become cheaper than coal and very competitive with natural gas. As a result, the volume of renewable energy generated has increased tremendously.
- Electric vehicles - Electric vehicles have entered the mainstream and are looking to disrupt if not completely replace gasoline powered ones.
- Energy storage - With the increased generation fo renewable energy and demand from electric vehicles, energy storage has become a critical part of our energy supply.
- Internet Of Things (IOT) - The number of devices connected to the internet is growing rapidly, making floods of data available and many more machines controllable as part of a network.
- Advanced Metering Infrastructure - One example of IOT's is the utilties' rollout of advanced metering infrastructure, which puts smart meters that provide more frequent interval data and allow two-way controls, in homes and buildings.
- Grid modernization, security, and asset maintenance - The grid in industrialized economies such as the US is aging and in need of modernization. Cyber security is becoming an issue in the connected world. The combination is creating the need for better asset management by grid operators.
- Microgrids - Small grids of renewables and storage are bringing energy to places where centralized utilities have not been able to serve. They've also been providing resilient energy supplies in the face of natural disasters such as storms and fires.
- Grid balancing, demand response, and transactive energy - Utilities and grid operators are finding it more cost-effective to serve their customers by reducing peak loads rather than building more capacity. This is evolving from the early days of industrial demand response to more intelligent load management between the grid and buildings.
- Smart buildings (Grid Interactive Efficient Buildings) - One trend is the Grid Interactive Efficient Building (GEB), an energy-efficient building which could respond to real-time signals from its utility and manage its load in exchange for incentive payments.
- Net Zero Energy and Passive buildings - Another trend is new building standards including Net Zero Energy and Passive House, which aim to increase building energy efficiency and offset their net energy fully with renewables.
- Peer to Peer Energy trading - The combination of customer renewables and utility need for grid-balancing is paving the way for a future where all consumers also act as producers ("prosumers"), and all parties on the grid can trade energy with each other and settle payments in real time.
All these key trends could benefit from DLT's in some combination of the following:
- Immutable records
- Payment (such as pay-go for microgrids)
The current scope of this working group includes:
- Identifying use cases for DLT's in the energy industry.
- Providing recommendations on how DLT's could complement or improve current industry processes.
- Implementing open source DLT software to demonstrate energy industry applications.
- Highlight work done with Hyperledger and DLT's in the energy industry.
- Educating other industry stakeholders, including utilities and regulators, on the value of DLT's and Hyperledger in the energy industry.
- Improve access to clean, reliable energy for more people in the world.
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