Blockchain Meets the Grid Mapping Opportunities for builders exploring real world energy systems

Transcript

[Music] Does it work? Yes. Perfect. Okay. So, this one. Okay. This is uh the sustainable futures track. You're watching a renewable energy systems talk and it's called blockchain meets the grid. Uh mapping opportunities for builders exploring real world energy systems. So this talk is mostly a food for thought talk. We'll try to give you a little um overview of um where you could as builders plug into existing systems.

We try to give you a very low threshold entry point into this world. Okay? And we'll do that by mapping an energy system. We'll then uh look into what's already happening in regards to blockchain in this world where we see opportunities and uh then what you uh might want to know before you engage in this world and at the very end we sum it all up with a little toolkit that will help you to explore further um if this is a world for you. Okay. So why are we here? Um, in the energy community, blockchain is kind of considered one of the key enablers of the next phase of the energy transition,

the move from fossil fuels to uh to 100% renewable energy. Um so um we are also like will what you will see later is that uh even though there's a lot of potential um you don't actually see that much applied yet sadly. Um we are also looking today particularly into the German energy transition because that is one of the most solar punk uh projects uh in the in all of the world. You've seen in the presentation just before uh it started in the 70s. Uh it's still ongoing. Um and uh one of the really cool aspects right now is that um

if you look at the um energy at the electricity demand in Germany right now 60% is already covered by renewable energy. That's quite the achievement but our goal is to get to 100% and our goal today is uh as speakers we want to get you involved in this world. Okay. So first things who are we that we can talk about these things it's uh we had this wonderful introduction so I don't have to repeat that my name is Brent I'm a systems designer and that's uh my colleague Andre and Andreas um he's an energy expert and we work respectively for bomb consult which is a a consultancy for um for the renewable

energy world and all studio a strategic design agency that works exclusively also in the world of sustainability. Okay. Um, most of you have seen the talk before. So for the people who watch the recording, I can recommend um, watching the talk of Damian and Anika from Ikim about decentralization because that's the thing that our two worlds have in common. We have uh the energy world um on the other hand kind of only adopted decentralization as a concept for the next phase of the transition while blockchain was molded in in it. It was built it was born in it. Right. Okay.

Let's look into into the mapping. Let's look uh how does an energy system look like? For that um we actually worked together on a publication which is called flus. The English title is sun, wind and wires. It's an atlas of an energy system in transition and it consists mostly of an extensive scientific model of the German electricity market. Um it's called the actors layer model. Um the weird thing was before we started this project we worked on it several years. It's a highly complex system. Weird thing is there was no model of this whole market in existence. So um we um conjured it into life and then the book goes on uh

it's it zooms in into a lot of different topics of the energy transition key technologies and as you can see lots of cute illustrations lots of infographics very low threshold easy to access. We will um provide you with this publication um at the end of the talk. Okay. How did we how did we build it? We uh accessed a lot of specialists from the field from all areas from all the crooks and necks of the of the energy transition to gather the information that is necessary to map out a highly complex system like uh the electricity grid. As you can see, we build it by with our hands. The first stages were

like really making these connections physically building the network and then diving deeper and deeper into the layers. Okay, let's look at it. Uh quick quick map. Uh Germany's energy transitions. The bird's eyee view. Who are the players? Um to keep it really simple because it is very complex. Um let's keep it simple. You have the producers of energy on the one side and you have to cons the consumers on the other side. So that you already learn some of the key players. Then you have something like a TSO. This is called this is a transmission systems operator. Think of it as the highways of the energy distribution. And the next stage is the DSOS, the distribution system operator,

which is the last mile distributing the the electricity then to the consumer. Okay, that seems simple enough, but it's of course uh as you can imagine there's so much more under the hood in this system. So let's look into how the model how this model that we created how this breaks it open. We have four layers. We have a physical layer that shows how the actual physical energy is flowing. We have a market layer is how the money is flowing. A digital layer, how the data is flowing. And then in the end, an institutional layer, how this whole thing is regulated, how these things play together. Okay, let's break it down. The actors layer model in detail. I'll keep

it short. um the physics there you can see again the energy generation on the one side the consumption on the other side in the middle we have the TSO and the DSO so simple enough right um this is how the energy flows um what do we see we see power plants we see solar panels wind farms cables transformers lots of physical assets that exist in the real world so blockchain entry points here would already be um the identity identity of these assets. Temper proof metering. You've all heard of smart meters maybe. Um and and something called grid grid edge automation. So more to that later. Um let's move on to

the market uh level. So it gets more complicated here. What are we looking at? We're looking at tariffs. We're looking at fees, energy trading, flexibility markets. We have two new player enter this level. we have like retail sellers and wholesale sellers of electricity. Um, so what it's all about it's the cash flows between the generators, the suppliers and the users. And also here we have some interesting entry points for blockchain peer-to-peer transactions tokenization microp payments, and programmable tariffs. We're moving on to the data layer. This one is particularly

interesting because um in the real world, so this is how the data flows in the real world. This is almost exclusively used just to to to print your energy bill in Germany. So what are we looking at? What's measured? We have the smart meters. We have the internet of things, sensors, any grid management system. Um but of course this data can be used to do forecasts to do usage profiles and in the end it's all about the control logic the automatation of the layers. Um again here is also great opportunities for blockchain. You have smart contracts that could be useful here. Um secure data exchange and uh anything uh in terms of verifiable

automatation. Okay. And this one is the most complicated layer because it's where the institutions come in. So who decides? It's all about legal frameworks, uh, market roles and compliance. How is it all regulated? The most affected in this whole system are the TSOs, the DSOs and two groups that, uh, you will get to know in a short while, proumers and what we heard in the last talk as well, energy communities. So it's all about governance structures on this layer. Uh here we see entry points with registries um DOS governance governance tokens decentralized identity and certification. Okay. But we've seen that

between all these layers in in these layers uh in each layer itself there's a lot of opportunity for blockchain technology already. But where it gets really interesting is when these layers start to talk to each other. So for builders the biggest opportunity is interfacing between these layers. So what's already out there? There is a bunch happening already and uh that is where Andreas will now give you a little little insight too. Thank you Ben. So we have seen a lot of details about the energy system in Germany and as it seems it's very complicated. So and obviously there might be some solutions already out there or something that you can do more.

We saw a little bit about that and I want to give you more insights on what is out there already and maybe give you some food of thought as band already introduced to go further with your ideas maybe in the energy sector. So uh I wrote a study in 2020 so it's been a while. Um small disclaimer is just available in German but I'm pretty sure all of you use AI systems to translate this. So just ask it then if you need something specifically I will give you some insights to it. So it was a two-folded approach. Um the first part was um looking into some of the consensus mechanisms that are out there just four of them and checking a little bit how are they built in an architectural way and giving people who

are interested in challenging this with their own ideas implementing this into the system to go through it and have a small navigation system if you want to look into that. So this was the first part and the second part was well big promises and big things that we did. Uh I was working at technical university back then and we had a big uh project that we also made the other book. So we had a lot of things going on. Um but big promises were made. Um many people said like this is the next thing we can disrupt also the energy system. We can do many things. So I wanted to look into the second part of the study what is out there and what was done in fact and um I'll give you here a small uh overview um you will not recognize exactly what

it is but you can research it later we'll give you the materials um there but there were a few key learnings that we saw first and foremost uh most of the things back then and still are built on the Ethereum blockchain technology. These are the ones that are orangey red. And most of the endeavors in this world were also built built on peer-to-peer solutions. We have heard some of the decentralization and uh community approaches. So I do believe the community also recognized that here's a lot of music that wants to be played. We also learned that most of the things were initialized in Europe. So this was also interesting to see because we looked at the whole world. Obviously this is not complete but we looked at at a big range of solutions and this was in

2020. Now you might ask yourself well this was 5 years ago how is this relevant today? Well let's look at it. Um I revisited all of them and I checked a little bit what is still out there because as you know sometimes you have projects and then after a few years someone opens the door puts the project inside and closes the drawer and all the things are gone. So let's look at it. So I think positively speaking 43% of the projects or initiatives are still out there. Some of them are more successful than others but they're still active. So I think this is good but approximately half are not out there anymore. So you can say okay whenever I start initiative there's like a 50/50 chance let's say to get there. So I think this is a high risk but might be also a high reward thing that you might

look uh be willing to look into. And there are also some I wasn't 100% sure where they are sometimes a little bit foggy. out there in the internet. Um, but let's say we we park them in the right side and say we're not sure. So, let's call it a 50/50 success rates. Sorry. Um, so looking at that, um, I wanted to give you some insights of a few examples that you just maybe already know or heard of or might be just interesting for you to see. Um, just to give you some light into what is still working, I picked a few examples just to give you a quick heads up. So, it's uh, Power Ledger. They started in Australia and um they did a little bit what uh our previous um talk was about uh namely the

peer-to-peer trading between neighbors specifically. So if your neighbor has a solar panel and you think it would be nice to buy electricity from this person next door then you can do this with this. And then the next let's say level of implementation was then hm what if you can also buy this from anyone anywhere. So like a energy market let's say uh I don't know I live in Berlin I want to buy electricity from a rooftop in Hamburg I could do so with this uh sun contract that was started in Slovenia but where is light there is also shadow so I also brought you one that failed because we also talked about failing and not being successful and um this we power initiative that was started in Lithuania they raised a lot

of money I think about 40 million for the IPO or ICO as it's called and um unfortunately um they failed and it was slowly phased out then a few years ago and you cannot find anything really about that. So there is also some let's say not so good examples but we believe looking at all these things it might be a big learning curve to see what's what goes what doesn't go or maybe just learn how and why they failed so maybe other people can do it better. So this is just a little bit of inspirational thought also and um information for you so you can give it a look later on if you want to investigate. So um let's look about further opportunities because today we want to give you just a little bit of you know uh just the entry point if

you're interested in joining the energy sector let's say with your surely good ideas. So um we heard about P2P trading and we heard about there are a lot of communities out there I think 9,000 in Europe probably the count is rising and there are already some solutions out there for P2P but it's still used very little. So this power ledger that I mentioned they start in Australia. I think they have another hub in Thailand and now in France. So slowly people are adapting it but I do believe there is more things to do. Um we heard about grid edge and um did talk about it before. So the entry point or let's say the connection between the grid

operators and the actual consumers. This is a very interesting point to harvest and maybe also dock onto interesting ideas. So there might be a lot of opportunities especially with this secure and decentralized approach. And if you look a little bit further there is also a system um in the energy sector called virtual power plants where aggregators pull all capacities or big and small capacities in the energy system and then trade this um electricity or whatever capacities are out there with others to gain some money from that. So I do believe there's also a lot of opportunities in this very digital way of um aggregating um electricity capacities because as for now we're just talking about electricity

nothing else. Um yeah and then u we heard it before there are obviously energy communities that need your support. Um I believe that uh another thing that was maybe not mentioned before is the lack of skills in these communities because you might have an engineer and you might have someone who can build it but maybe they cannot manage and organize it. Maybe they don't know all these um I would say um complex structures that we showed you before and maybe we can make it a little bit easier and accessible so they can actually empower and and build their community. So there are a lot of things that can be done. And uh one more thing that I'll mention before I give back to my co-speaker um there is also something called flexibility in the energy market.

And in our project back then, we had a big supermarket chain and they had a um cooling cell, you know, where all the stuff is stored that you don't see while you go to the supermarket and they connected to the grid in a smart way and they would turn off this cooling cell when there would be too much electricity uh in no they would turn it off when there's little electricity um in the market and vice versa turn it on where there's an over supply of electricity because for example there's a lot sun and all the solar panels are producing electricity. So um these are possible solutions that can be done in a real world scenario but also in other scenarios. And with this I'll get back to

band. Great. Thank you. Yeah, flexibilities is one of the most fascinating um principles uh in in my opinion um because it is a very very complex kind of issue. There's lots of dynamics. things change really quickly and I have the feeling that this is a perfect nurturing ground for the uh for applying the blockchain to solve some of the issues that are happening there. If you want to dive into this topic more, we also have a nice publication about that. It's called let's talk about flex again it's a it's a publication with lots of nice infographics that explain what um what flexibility is and uh it explains how we can use it, how you can identify it. uh also settling in German

but again the AI will read it for you. Okay. And then if we zoom out even more um one last opportunity is again like switching sectors. Um we were talking just about the electricity sector so far. Um but there's more sectors. There's also the transport sector. There's the heating sector. And each of them again has its own set of rules, its own dynamics. Um and it gets really interesting when you start connecting these coilos um that are separated from each other uh among each each other. There's a lot of optimization potential. So that's also like the grand scale u but also the most complicated area to um like make

connections. So what would I have wanted to know when I entered the energy market? Uh here's a few things to keep in mind. Uh just some very basic stuff. Um we are not able to disrupt the system there. We have like it is an organically grown system. Um it uh we have lots of lockin effects. This thing uh is a lifeline for society. So we cannot really reinvent the grid. We have to extend it because as you can see you can see nothing like that.

That's the point. It's critical infra infrastructure. We cannot just turn it off and then experiment with like uh with with a lot of elements. So uh think of it like uh you want to you want to expand your gaming rig, your gaming PC and you have to do it while it's plugged in and while it's running. There's only so much you can do in this case, right? Then the next next thing um also a really tough nut to crack is the fear of uh fear of contact. most decision makers um do not have blockchain really on their radar or even understand or even know that it this technology exists and what it does. So the main thing you will hear very often is when you approach a decision maker in the energy world they

will go like blockchain crypto isn't that that scam stuff and so you have this really huge knowledge gap. Um so not only have we do we have to come up with good ideas, we also have to convince people and educate people of how this thing can be uh made useful for this great endeavor. Okay. Then there's regulatory boundaries um because it is a a crucial part of society. Society depends on it. Um it is heavily regulated. So keep that in mind getting in there. Um lucky nowadays we have AI to help you make sense of all these legal papers.

Then uh it is also really important that all things work together like you can experiment but of course you will not have total adoption uh anywhere. So making things work together and then building a lot of identity and trust around all these approaches to the energy system also a big big thing to keep in mind. And trust is another really important keyword because we've seen the geopolitical turbulences we're experiencing uh over the last few years have a massive effect on our energy system. Um so one of the things that the energy community is talking mostly about at the moment is security. Um but again here of course we uh can play into a strength of crypto as well. Okay so

we've shown you a few of these publications. Um if you want to use them to further navigate these complex spaces uh you can download them uh on my link tree. So there's like all three publications there as a as a a free download. um throw it into the AI of your choice and uh let's see if you if if it can enrich your ideas, it can give you some some more pointers of where to look for solutions and maybe it can challenge your ideas this way. Okay, bottom line, um how do we sum this all up what we just told you? Uh the future of energy definitely needs systems thinking and uh if we want to build something truly

decentralized we'll have to start by understanding the existing grid and uh even more important is you like we need your help. Uh you've seen the system is highly complex lots of variables lots of stuff that can't be steered uh come into play. Um what we need is you explaining to people like us how we can really make sense of this, how we can use this technology which is which is very new for the energy world. Um how to benefit off that and uh in particularly we need your imagination, your creativity of how to um introduce these ideas into this rigid system. Exactly. And with that, thank you. Um, I hope you could take

something away of that and um, we can give it up to the questions. [Applause] Oh yeah, maybe maybe one more thing. Uh, we have a little mini quiz. The person who can tell us um the German energy demand, how much is currently covered with renewable energy? First person to know that the first will get one of the books. 16%. Perfect. Yes. Yes. Um you will you will get one of our our Atlas books, the Sunwin and Wild ones.

Perfect. Thanks a lot B and Andreas. It seems like everyone was quite attentive to your presentation and we have few minutes for the questions. So if anyone of you has a questions, feel free to ask. As of now, don't be shy. Hi there. Uh thank you very much. Uh what do you think is the biggest challenge to get regulators and energy grid current operators to start adopting blockchain and how can we explain that technology that's there can be used for that good uh good question um I do not have the

solution to it but I might have some approaches so I think showing or showcasing that specific things work already in other realms let's say you approach a German regulator but things are working let's say in Australia as we saw on other countries that might be a good entry point saying look they're already having something that works what would it take maybe to adopt that for you and um would you be willing to talk about this and the second part of that I think it's very important in general is about explaining people what this is and uh in the study I tried to explain this still quite complicated technologies of these consensus mechan mechanisms and everything that comes with it um in the study but I still had the feeling that this very complex and there's there's no

easy entry points for people especially when they're biased by maybe negative news or thinking that a scam or something like this. So maybe it's also upon you to uh open a little bit the stage and break down these complexities into digestible pieces to just say like you don't have to fear this is not technology is going to eat you up. It's more if you understand it you can leverage it to your own needs and maybe success stories that that are already out there. So I think these are two components that could be used but again it's a it's an old industry uh that comes from a monopoly point of view as many other big industries also exist. Um so it's breaking apart a little bit these um how can I say this uh big big piece into smaller fragmented things. uh it's already happening. So we have good

things out there but it's just the start and we have to speed up as we heard also in the talk before other questions. Thank you very much. Um just one question for um your opinion. Um the recent um huge um power outage in the Iberian Peninsula um Spain and Portugal, would you say that this um made the operators more wary of new technologies or do they see that there is actually more need for new technologies to um stabilize grids? Yeah, that's a very

good question. I think it's not completely solved what exactly happened there yet. But I think people are investigating a lot. Um I have once heard from a distribution operator, so those who put the cables, you know, under the under the earth and everything that these cable are so old they don't even know exactly what kind of status they have and how good they'll function over the next years and decades. So I think one of the things that people should do especially those who have these cables underground they should reassess what they have and maybe also revamp a little bit this infrastructure because if you want to you know rebuild and do things in a better way we need to make sure that at least the connection points work properly. Um so I think that's maybe one of the first steps but I do believe even

in Berlin that's also the one that are talking uh they said some things we also don't know you know they can measure end points but they can measure anything between because it's in the ground what can you do so uh but yeah it's a big complex problem and maybe we can take it to the coffee afterwards perfect thanks a lot burn and it was amazing presentation [Music]