The Energy Web Foundation Accelerating the adoption of blockchain technology in the energy sector ICEF October 4, 2017 Dr. Aeron Buchanan 1
Presentation Overview Economic potential of blockchain in energy Obstacles to adoption Why the Energy Web Foundation? 2
The economic advantage is shifting Diseconomies of scale vs. economies of scale Cost 3
The value should be shifting to the customer Generation Transmission Distribution Ratepayer Where the value has been Generation Transmission Distribution Customer Where the value will be 4
For that we need a new system architecture Legacy system architecture Utility Emerging system architecture Wholesale Thousands of participants Customer kwh $ kwh $ Distribution Edge Millions and potentially billions (IoT) of participants 5
Blockchain enables new sources of value 184 use cases identified to date falling into two broad categories Game changer to potential game changer Disruptive platforms (total = 52) Process improvement (total = 55) Transactive energy 26 Billing 13 P2P Trading 17 Sales & Marketing 9 Distributed generation 9 Automation Metering and data transfer 6 7 Mobility 6 Additional use cases RMI: 27 Communication 5 GSy: 30 PWC: 20 Grid management 5 Security 4 Source: DENA / ESMT survey of 70 German energy sector executives Nov 2016 6
An example of process improvement (1/2) certificates of origin today Onboarding & Issuance Qualified Reporting Entity Certificate Tracking System Trading & Ownership Tracking OTC Markets Redemption, Retirement, & Reporting 5 Renewable Generator 1 2 Renewable Generator Broker Aggregator 4 REC Buyer 3 6 Annual Audit 2a REC Certification Entity REC Exchange 7
An example of process improvement (2/2) Certificates of origin with blockchain Onboarding & Issuance Trading & Ownership Tracking Certificate of Origin Tracking System Redemption & Retirement 2 Renewable Generator 1 Blockchain 3 Certificate Buyer Reporting 4 Compliance or Disclosure Entity Lower transaction costs Faster execution (minutes - not weeks) Reduced working capital requirements Reduced labor Increased transparency Increased cyber-security 8
Outsource the repetitive stuff Legacy Internet Future App App Blockchain Internet 9
Communication transformation Analog Comms Legacy Internet Blockchain 10
Presentation Overview Economic potential of blockchain in energy Obstacles to adoption Why the Energy Web Foundation? 11
A number of issues need to be addressed Emerging system architecture Today s focus Wholesale Issues to address Transaction costs kwh $ Large data sets Data privacy Distribution Edge 12
Performance where we are today Number of transactions per second 56,000 450 20 4 13
Performance why it is a problem Existing blockchains cannot support commercial applications Time to execute Where we are today with blockchain technology Proof of concept Commercial Scale 14
Performance how do we go there? Time to execute Where we need to be Proof of concept Commercial Scale 15
Presentation Overview Economic potential of blockchain in energy Obstacles to adoption Why the Energy Web Foundation? 16
Our core beliefs to promote adoption 1 2 3 4 Leverage the best technical talent Create an open source core infrastructure Focus infrastructure on application needs Promote an ecosystem of users 17
Leverage the best technical talent 18
Create an open source infrastructure Certificates of Origin Transactive Energy EV Management Application Proprietary For profit Easy Blockchain infrastructure Device interface Blockchain (core and additional functionalities) Open source Not-for-profit Difficult Coal Gas Nuclear Hydro Wind Solar DERs Dist. Networks 19
Focus infrastructure on application needs EWF Affiliates as of Oct 3, 2017 20
Promote an ecosystem of users ~100 energy blockchain startups will benefit from the EWF infrastucture 21
Timeline Proof of Concept Start building Minimum viable Products Test Phase MVP Software updates in 3 month cycles - constant community feedback 22
Exploring blockchain alone is more expensive than teaming up with the rest of the industry Lost Synergies Duplication same work done many times No leverage of scarce technical talent No investment into a scalable electricity-sector specific blockchain infrastructure No concerted effort for regulatory changes / standardization No experiment in governance of a blockchain infrastructure No cross-learning from peers 23
The process of joining EWF is straightforward 3 1 Review documents in the data room Send us an email (join@energy web.org) 2 Send us your signed MOU (join@energy web.org) Data room includes all legal documents including EWF deed, bylaws, and template contracts 24
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The Energy Web Foundation Accelerating the adoption of blockchain technology in the energy sector ICEF October 4, 2017 Dr. Aeron Buchanan 26