The energy system globally is in the midst of a digital revolution. From power generation, to the systems that distribute energy, to the way that customers manage energy at home and interact with their providers, the world wants and needs smarter, cleaner, more reliable energy. This is a challenge for all providers of energy. Blockchain is a technology that has the potential to enhance all aspects of the energy system. In simple terms, this is because every aspect of the energy system can benefit from greater efficiency.
At Iberdrola, we are looking at technological advancements that will help us to deliver the greatest benefits from every green megawatt of power that we produce. We want to manage the flows of electricity in a smarter way, enhancing efficiency. And we are also working hard to help all of our customers, from the largest businesses to individual consumers, receive the most intuitive services at the best possible value.
Last year we invested €246 million in research and development. This financial investment is geared towards ensuring our business can play a role in delivering a better future, quicker. Companies in our sector who fail to innovate will be left behind.
In our most advanced blockchain trial to date, we worked with Kutxabank, a Spanish bank, testing processes that allowed us to better deliver a service guaranteeing that the energy supplied to our customer was 100% from renewable sources. Guarantees of Origin, Europe’s market-based and tradable renewable energy certificates, are an important element of the energy system, for both suppliers and for customers. By utilising blockchain in this trial, the bank was able to track, in real time, the origin of the energy supplied by Iberdrola from the generation asset to the point of consumption.
Our customer could see that wind power from Oiz (Biscay province) and Maranchón (Guadalajara province in the Castile-La Mancha region), as well as hydro from the San Esteban plant (Orense province in the Galicia region), was the energy that was being consumed at their headquarters in the Basque Country and Cajasur in Córdoba.
Another benefit for both supplier and customer is that blockchain technology eliminates intermediaries. The technology uses smart contracts, which automatically come into effect when both parties fulfil their side of the agreement. This simplifies the process, eliminating costs and improving privacy.
In the latest trial, blockchain applications allowed us to accelerate the overall process of certification, increase traceability, and increase the transparency and security of the transaction. As the transaction is permanently registered on the platform, both parties can also audit the results.
A win-win situation, and something we see real potential in growing.
Beyond this, we see blockchain being able to deliver benefits in all of our business areas. As part of a wider industry group, we have already tested blockchain-based transactions in wholesale energy and natural gas markets.
This initiative allows peer-to-peer transactions to be carried out without the need for intermediaries. Agents can buy and sell energy directly, without a regulated market, and their transactions will be registered on the platform anonymously and in encrypted form to be verified by other operators.
In our energy networks business, blockchain initiatives are mainly aimed at certifying information about network events with the potential to have an impact on customers. This helps us to manage our network more efficiently, and have greater information to keep customers updated.
For the Kutxabank trial we were supported by Energy Web Foundation, an open-source blockchain platform designed specifically for the energy sector. We have worked with various innovators looking at blockchain processes, and a whole host of other start-ups and providers looking at technology advancements in our sector.
Last year at our Innoday showcase event in Madrid, 25 exhibitors highlighted their new concepts in areas such as renewable energy, smart grids and energy storage. We are working to encourage innovation in our sector, and we will support ideas that deliver real benefits.
With the fast-paced rate of progress, technology concepts that are just appearing on a whiteboard today will be a key component in our sector in no time at all.
Blockchain applications are rapidly showing their value. If the trials continue to yield positive results and deliver real benefits for energy providers and customers, it is likely that we will see this technology being applied to processes all across the sector.
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