Decentralised energy trading first results of the Enerchain project Michael Merz - PONTON GmbH

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1 Decentralised energy trading first results of the Enerchain project Michael Merz - PONTON GmbH

2 Energy Trading in the Context of Energiewende Volatility and congestion drives physical flow of electricity Short-term balancing required at local grid level, distribution grids and transmission grids / control zones P2P trading between prosumers and consumers Demand-side / supply-side management driven by DSO Local Smart Markets for flex and local balancing Tendency towards spot market and short-term trading on the wholesale market Trends: Lower volumes per trade, lower CAPEX for renewables, lower price per MWh, smaller MPs, increasing cost (regulation!), market access & TA fees remain constant, trading is a loss-maker A radically new approach is needed! 2

3 Wholesale Market Scenario 2030: Hierarchical Markets for the Balancing of local Grids Balance Trades Area DSO Grid Grid-wide Market Residual Load Provider E - Village Residual Load Provider Regional Market Residual Load Provider E - Local Market E - E - 3

The Blockchain & Energie Space Vertical Focus (energy)

Market - TSO / DSO Grid P2P - Wholesale market

vs. DSO Internet of Things (Lift device data into the

Challenges Access / Identity Management / Archive

4 The Blockchain & Energie Space Vertical Focus (energy) P2P Trading - Microgrid - Local grid Flexibility Market - TSO / DSO Grid P2P - Wholesale market Settlement - Financial - Physical Grid Control - TSO vs. DSO Internet of Things (Lift device data into the digital sphere) Horizontal Technical Features & Challenges Access / Identity Management / Archive historic blocks Load / Mass Data / Performance / Stability / Security / Privacy 4

5 Project Enerchain 4. Oct 2017: The world s first wholesale energy trade over the blockchain Challenge: Technology Legal / Regulation Governance 5

6 Our Brainchild was born on August 25th! (the first test trade on Enerchain as of August 25, 2017) By AXPO and Wien Energie

7 How it all began Early 2016: Book chapter, REMIT rollout deadline Summer 2016: development of demonstrator Winter: trading organisations interested in internal prototype February 2017: Workshop Berlin May 2017: Project start with 23 participants Today: 33 participants, live trade in AMS next week End of 2017: original end of PoC, to be extended until end of Q1/2018 Right time to come onboard! 7

8 Project Enerchain 35 Participants (some logos hidden) 8

9 NEW 4.0 Norddeutsche Energiewende Region Hamburg/Schleswig Holstein, > 50% RES share, develop Smart Market for Flex. 9

10 Local Market for Flexibility based on Blockchain Technology 2 Agent: Batterystorage Battery API 1 Agent: Exchange Demand Supply Other Market Price Index 1 50 /MWh Power Price (front hour) 0 /MWh 2 Battery 100% 24h... Marketplace (via Blockchain) 0% 3 100% Electrolyser 50% 4 Electric Vehicle 100% 0% 3 API Agent: Electrolyser API 4 Agent: Electric Vehicle % Office Building (heating) 0% Agent: Office Building

11 Where is the Business Case for Blockchain? High availability at reduced cost (organisationally & technically) Disintermediate Integrate token currency Allow for minimal transaction volumes through reduced transaction cost Directly link people to people / assets to assets Trustlessness Standardisation effect So, again, where is the business case in using blockchain technology? It is the mix, stupid! 11

12 PONTON / Blockchain Hall of Fame Find more information here: plus projects under NDA

13 Thank you Michael Merz 13

14 GridChain TSO / DSO Prozess-Synchronisation TSO TSO requests balancing power from aggregators, which in turn activate load at local generators. DSOs are informed after the fact. DSO DSO DSO DSO Aggregator CHP Gen. Supplier Gen. Gen. Gen. Gen. Gen. Gen. Gen. BGR 14

15 Why is it so difficult to Think Blockchain? Classic Approach Blockchain Approach Business Case? Software Design / Spec.? This won t work! Software Implementation Operation Blockchain Technology Blockchain (e.g. Ethereum) Blockchain-based design is a permanent elevator ride

16 Gartner Hype Cycle Sept 2017? Gartner Hype Cycle für technologische Innovationen Blockchain The Wormhole

Smart Contracts for Smart Grid: Harnessing the Potential of Blockchain Technology for Future Energy Systems

Smart Contracts for Smart Grid: Harnessing the Potential of Blockchain Technology for Future Energy Systems BenJeMar-Hope Flores floresbenjie@seoultech.ac.kr Asia Clean Energy Forum 2018 ADB, June 4-8,