The Developing Role of Blockchain Report 2017 of World Energy Council (WEC) in collaboration with PricewaterhouseCoopers (PwC)

Transcription

1 Seoul July 5, 2018 The Developing Role of Blockchain Report 2017 of World Energy Council (WEC) in collaboration with PricewaterhouseCoopers (PwC) Dr. Axel von Perfall

2 After hitting the financial sector by storm, Blockchain now takes on the energy industry Just a hype or starting point of a revolution? PwC

3 The energy sector is seen as one of the industries where Blockchain could have the biggest transformative and disruptive impact Traditional processes Processes in a Blockchain-based system Conventional power plants Wind energy Storage PV and other renewable energies. Conventional power plants Wind energy Storage PV and other renewable energies. Energy suppliers EVU Bank Traders Grid operators Metering companies 1043,27 Banks and payment services Grid operators Blockchain Electricity Payments Blockchain: payments and transaction data Operation and system integration Domestic and commercial consumers Domestic and commercial consumers PwC

4 Blockchain technology offers a variety of use cases across different sectors Financial market transactions, especially currencies Initial coin offerings (ICOs) Ownership registration, registry functions Peer-to-Peer transactions, without a middleman Direct transactions between sender and receiver (Bitcoin and other currencies) no intermediary needed Decentralized, Blockchain-based crowdfunding for projects and companies Decentral and secure storage of ownership information in various industries Non-financial transactions without an intermediary Cryptocurrencies: Bitcoin, Ripple, Litecoin etc. Crypto-related tools, e.g. wallets: Coinbase, Copay etc. Financial sector: consortia like R3/Corda etc. Various ICOs with multi-million dollar fundings in recent years Currently majority of ICOs are for crypto-related projects/startups. Tendency of non-crypto projects to launch ICOs. e.g. Land registry: ChromaWay, Propy Luxury goods: Blockverify, Everledger Art: Ascribe; ArtPlus Logistics: Blockfreight, Maersk, GS1 Germany (pallets) Energy: Solarcoin, Grünstromjetons many projects in the energy sector, e.g. B2C Peer-to-Peer: Brooklyn Microgrid, PowerLedger, Wepower B2B Peer-to-Peer: Enerchain Electric mobility: Share & Charge Grid management: TenneT/Sonnen/ Vandebron, TWL PwC CRYPTO ENTERPRISE BLOCKCHAIN 4

5 Joint study of the World Energy Council with PwC on the role of Blockchain technology in the energy sector (2017) Update 2018 in progress PwC Blockchain Services 5

6 Blockchain is being picked up strongly by the energy and utility sector in Europe and across the globe PwC Radar Energy Ecosystem players and use cases Energy ecosystem in 2018 increased 6 times when compared with 2016 PwC Radar in June 2016 ~15 IT Company Distribution of >100 players by type of company Collaborating Network 4% 8% Other 8% Developer 47% Wholesale peer-to-peer networks Distribution of 38 energy use cases per category Administrative/ supportive 11% Ownership registration, registry functions 8% 5% related Grid flexibility 18% PwC s Digital Services PwC Radar in July 2017 >70 Radar in March 2018 Energy Company 33% E-mobility platforms 11% Cryptocurrencies >100 Main use cases categories: grid flexibility & peer to peer retail networks. More that 50% of all the use cases with considerable impact on grid management 13% 16% 18% Retail peer-topeer networks Initial coin offerings (ICOs) 6

7 Many energy firms have started to engage around Blockchain by checking use cases and doing pilot projects Activity level of selected European utility companies around Blockchain 2) Enerchain only Proof of Concept Live Projects Scale Experiments or pilot projects that Product/service with a defined demonstrates evidence of the business plan, roadmap and budget, applicability and feasibility of often between parties for mutual Blockchain benefit and open to more participants (limited) Companies participating in the Enerchain project, yet not developing other Blockchain projects by themselves 1) allocation of companies to categories based on publicly available information, no guarantee Established large scale running projects, open to any participants, driving financial results and fulfilling evaluating KPIs PwC 7

8 From the study and our experience in the market we see a high willingness to cooperate and to share resources Cooperation and consortia As there exist numerous conflicts the technology will have to deal with and in order to provide solutions for complex issues, such as regulatory disputes, major firms must come together to produce collaborative projects. 64% of the participants exchange views on the use of blockchain with other industries. 86% have thought about partnerships with start-ups. PwC s Digital Services 8

9 MICROGRID / P2P PwC PROJECT PwC creates an independent microgrid using Blockchain technology to match supply and demand for a German utility company (TWL) Blockchain-based microgrid Project example: development of an auto-balancing Microgrid using Blockchain technology Project LUtricity creates an independent auto balancing grid by using Blockchain and smart contract technology to manage flexibility Storage By using the decentralized Blockchain technology no single point of failure as well as independent machine-to-machine grid balancing and stabilization is possible B2C Prosumer B2B Consumer Local solar power producers Enablement, orchestration of and stabilization of decentralized grids Keeping control of decentralized grids AUTOBALANCING MICROGRID Smart contracts manage flows PwC September 2017

10 E-MOBILITY PwC PROJECT We developed a Blockchain strategy for a large European utility company supported by a practical use case around electric vehicles Peer-to-peer mobility Development of a Blockchain strategy - What is the current state of Blockchain in the energy sector? - What are opportunities and risks for the client and for each of its business units (generation, trading, grid, sales, ) - Which use cases are most relevant? - Which capabilities and investments are required to fully benefit from Blockchain technology in the next years? Use Case Sprint - 3 day workshop to brainstorm on use cases - selected use case in the field of E-mobility Prototype (app mock-up and Blockchain) for the use case Project was implemented by an international PwC team PwC 10

11 TRACK & TRACE PwC PROJECT AirTrace is an end-to-end tracing tool based on Blockchain technology that was developed by PwC and is rolled out in several industries now AirTrace PwC tool for supply chain use cases Imagine if you could check your pharmaceutical purchase prior to POS to confirm that it: is not a fake is safe to buy from this location is safe to take with current medications is priced reasonably relative to prior purchases and nearby alternatives has not been recalled or subject to warnings And once you buy it, the app keeps on letting you know when to take your meds, when to replenish them, and where you can replenish from. Initially developed for the tracking of pharmaceuticals, it is now deployed in several industries, e.g. retail, airplane part management, food tracing etc. PwC Blockchain Services 11

12 TRACK & TRACE PwC PROJECT Pallet handling PwC is part of a consortium to use Blockchain for the integrated tracking and tracing of pallets in the retail sector Pilot project pallet handling Manufacturers Objective: radically simplify the currently highly inefficient process of pallet handling in the German retail sector Blockchain platform will integrate the currently very manual, paper-based process of exchanging pallet notes A cross-industry consortium was set up to implement the platform and gain insights about practical requirements and success factors for Blockchain in logistics Consortium partners Further partners Organization promoting the establishment of industry standards Transformation of process requirements to Blockchain technology Technical implementation of Blockchain platform Logistics companies Retailers More information: PwC 12

13 The market sees clear opportunity but there are important technical and regulatory challenges to be overcome Opportunities Potential barriers 100% of the interviewees think that blockchain will be able to disrupt the functioning of the industry and contribute toward accelerating the speed o the energy transition. 67% of the interviewees think that unclear regulatory protocols are the most important barriers to the further development of Blockchain in the energy sector. 92% think that blockchain technology will start making the most disruptive impact within the next 5 years. 53% of the interviewees think that blockchain will bring new cybersecurity risks PwC s Digital Services 13

14 What are the benefits of using Blockchain technology? Today In 3-5 years Blockchain allows business models that were not possible before? Blockchain motivates companies to think much more about decentral / new business models Increase of operational efficiency (slimer market models with no or less intermediaries) Reduction of transaction costs (integration of previously separate steps, e.g. market making function, contracting, transaction confirmation, payment)? Security (decentralised systems are less vulnerable than centralized servers) 14

15 Blockchain technology is at the beginning of a development path that will eventually lead to more decentral business models Main objective: increase flexibility and scalability Standardization of data exchange Efficient execution of micro-transactions Flat no hierarchy systems (peer-to-peer) Web technology Blockchain Enable decentral business models Increase cost efficiency Blockchain 2.0/3.0 Next Level decentral technologies e.g. IOTA, Hashgraph PwC s Digital Services 15

16 Do you remember? PwC Blockchain Services Where will Blockchain be in 10 years?

17 Contacts Axel von Perfall PwC