Technology - 08/July/2021

Blockchain finds a purpose in tracking energy unit origins

Case study: The breathless furore around blockchain has died down but in some ways, the technology is still supporting the energy transition. Carbon-conscious buyers and sellers can use a distributed ledger to track where the electricity they use comes from

Blockchain technology could help customers guarantee the source of the electricity they procure


In 2017, the founders of Spanish startup FlexiDAO spotted a potential niche where blockchain could make a difference. A distributed ledger could solve a growing problem for businesses buying clean energy supplies over the gridto make sure a specific renewable plant is producing at the exact time you need electricity.

Traditionally, clean power producers and consumers have relied on energy attribute certificates (EACs), also referred to as guarantees of origin or Renewable Energy Certificates, as a way of certifying the source of energy. They are meant to encourage clean energy investment by giving customers a way to pay a premium to renewable energy producers, with the hope that this money will get reinvested in new plants.

When it comes to measuring carbon emissions, however, traditional EACs are imperfect instruments. They do not take into account the moment in time in which the green energy was consumed or produced and the price of an EAC, at around 1% of an energy bill, is too cheap to drive real investment in new plants.

With businesses facing increasing scrutiny over their commitment to carbon reduction, FlexiDAO realised that a blockchain platform could add an extra layer of transparency to EACs. It allows each unit of energy to be given a smart contract, recorded on the distributed ledger and allocated to a specific customer. It results in accurate measurement of the real carbon footprint of a company’s energy consumption.

FlexiDAO created a distributed application, called REspring. Energy retailers can use it to enhance the renewably sourced supplies they offer to carbon-conscious customers. It tracks the kilowatts bought and sold in physical or virtual power-purchase agreements, green energy tariffs, community solar trading schemes and electric vehicle charging initiatives.

“Having more accurate, granular requisites over the source of energy can drive up prices, hence fostering investment in new plants,” says FlexiDAO’s Joan Collell. “Blockchain finally allows for that level of granularity.”

REspring has been adopted internationally by large power users looking to enhance their environmental reporting, such as Vodafone or El Corte Ingles, Spain’s leading department store. Energy firms including Iberian majors Acciona Energía, EDP Renewables and Iberdrola are including REspring reporting in their green tariffs and power purchase agreements (PPAs). Each year the platform tracks about five terawatt-hours (TWh) of renewables, out of a total of 3269 TWh in 2020.

FlexiDAO is not the only company that has found success in applying blockchain technology to EACs. In France, Engie-owned company The Energy Origin offers a similar service. Meanwhile, Power Ledger, an Australian firm, also provides guarantees of origin as part of a wider suite of blockchain-enabled services focused mostly on energy, grid flexibility and environmental commodities trading. •

 


TEXT Jason Deign

Share


Comments are closed.

Related articles

Blockchain literally links, or chains together, blocks of data, such as information regarding a specific power generator and a specific consumer.

New kid on the block

Blockchain is regularly touted in the media as a tool to revolutionise business, but the jury is still out on whether it can help speed up the transition to renewables

Read more

Spanish utility Iberdrola is testing the use of blockchain to show customers exactly where their wind energy is produced. Francisco Hernanz, Head of Renewable Energy Management at the company, highlights the importance of innovation

Blockchain in energy

Spanish utility Iberdrola is testing the use of blockchain to show customers exactly where their wind energy is produced. Francisco Hernanz, Head of Renewable Energy Management at the company, highlights the importance of innovation

Read more

Traditional rules do not apply in this experiment

Five years ago, technologists excitedly started suggesting how to use blockchain for energy applications and a raft of start-ups followed, sporting distributed ledgers for the power sector. Today, the word "blockchain" is seldom heard in energy circles. While the hype may have been overblown, work continues instead on a quieter revolution to the one that was promised

Read more

Parisian radiators with brains

Qarnot, a small company based outside Paris, France, is developing computing products that generate heat close to the end user

Read more

Use the correct data in the right way

Data is having a major impact on our world. In energy, an influx of data is changing the roles of each player across the value chain but it needs to be gathered and processed in a suitable way to have the greatest influence. Ensuring the data is right to begin with is essential to the success of the energy transition

Read more

Spring/Summer 2021

Digits, Data & Metrics

Read more