Blockchain Applications: What's Energy Web Chain?
Companies in a variety of industries all over the globe are investing in blockchain technologies to stay competitive and improve ways of doing business. The energy industry is not an exception. A recently launched Energy Web Foundation is an organization that serves to prove that blockchain and energy industry are a good match.
What is EWF?
The Energy Web Foundation is a non-profit organization started in 2017 by the Rocky Mountain Institute think-and-do tank and Grid Singularity – the European blockchain company – together with ten founding affiliates. The primary goal of the project has been to create a blockchain platform for the energy sector that would harbor all the companies and regulators of the industry. The foundation received its first initial funding of $2.5 million in May of 2017 and for the last two years EWF has been harnessing all the necessary components to achieve its goals. In June 2019, the company officially launched the first-ever blockchain designed for the energy sector’s regulatory, operational, and market needs – the Energy Web Chain (EWC).
How Can Blockchain Change the Energy Sector?
There are numerous ways in which blockchain technology can drastically change the energy sector’s inner workings. Applying blockchain to the industry could lead to a variety of potential benefits, including a significant reduction of transaction costs, enhanced data security, increased number of options for customers, improved sustainability, and further decentralization.
Using blockchain is expected to lower energy providers’ costs. Thanks to the digitized approach to business, fewer physical operations will be necessary. This can lower costs associated with accounting, monitoring, and human resources, among others. Lower costs for providers are expected to translate into more competitive pricing for consumers.
The Energy Web Chain serves to promote a more democratic and efficient energy system, thanks to its decentralized structure. More power will be distributed towards consumers, which in turn will lead to the increased quality of providers’ services, lower prices, and generally more options. If the ecosystem becomes truly global, there will be an abundance of choice. For instance, consumers will be able to choose who to get their electricity from and what kind of electricity to get: they can choose to go with renewables or coal power plants, etc. No longer will the participants from the same country or continent be confined to working with each other. Thanks to a broader access provided by the blockchain, consumers and providers will gain access to a diverse selection of international partners.
The incorporation of blockchain technology into the energy industry will provide transparency for potential stakeholders, without compromising the privacy of individuals or companies. Thanks to the blockchain’s design, all the dealings inside the ecosystem will be available for observation. This should translate into more investments in and the general improvement of the energy sector.
Blockchain adoption is expected to promote clean energy and therefore the overall sustainability of the industry. The energy – especially electricity sector – is already changing thanks to massive investments and asset deployment. Each year about $300B is invested in clean energy sources, including solar systems, batteries, and wind turbines, while sustainable mobility investments are projected to get to $2 trillion by 2030. Deployment and integration of these assets known as distributed energy resources (DER) are already causing an emergence of a very different grid architecture. Yet, many DERs still need to be integrated and blockchain can help utilities with that. Blockchains can close the existing gap. They can assign and manage digital identities for DERs, make DER onboarding efficient, and enable faster grid services at very low costs.
Blockchain will allow the industry to adopt an improved P2P system that will cut out the middleman companies entirely. Sadly, the current system requires a public utility to play a third party role that enables the trade between producers and consumers, who support and use energy. Thanks to blockchain, the old system will become obsolete. For instance, consumers will be able to buy solar energy directly from their solar-powered neighbor. Smaller ventures will thrive and business will become increasingly peer to peer.
Most importantly, blockchain offers security, thanks to its decentralized nature. Since EWF members will participate in the ecosystem using sensitive information, it is crucial to have an unhackable virtual environment. Blockchain technology is considered unbreakable, so its implementation is expected to lead to increased data security for all the parties involved.
Since it was first launched in 2017, global energy giants have been keeping a close eye on the Energy Web. It is not surprising that the list of its affiliates has been increasing exponentially ever since. EWF went from 37 affiliates at the beginning of 2018 to well over 100 partners today. The list of partners includes prominent energy companies, such as Total, EnBW, Centrica, GE, SB Energy, Shell, Siemens, Swiss power, TEPCO and many others. While still in the early stages of implementation and usage, Energy Web is the biggest blockchain project designed to date and seems to be the key to revolutionizing the energy sector, considering the support and attention it has been receiving from the industry leaders.
Needless to say, that the EWC will face challenges associated with regulatory and legal frameworks impacting the blockchain ecosystem, from legal restrictions to taxation. However, governments around the world are starting to develop their regulatory structures related to the new technology. As a result, countries like France are already working on implementing possible solutions.