Integrated blockchain solutions

We illustrate the main use case classes - as well as selected projects/initiatives - relating to multi-purpose & integrated platforms and the Internet of Energy Things (IoT, smart devices, automation & assets management):


3c1. Multi-purpose and integrated platforms

  • Government blockchain initiatives (OECD). As seen in the map on the left, there are currently at least 202 government blockchain initiatives (of course well beyond the energy sector) in 45 countries around the world. Many of these are in the early research stages, but a number of them are functional proofs-of-concept or implemented services. A few are also cross-government and cross-sector communities of practice dedicated to raising awareness and skills of civil servants, and serving as a place to share ideas and collaborate
  • EU Blockchain Observatory and Forum. It currently contains a listing of over 700 blockchain initiatives in Europe and globally. Despite all the progress, there is still a way to go before achieving a coherent overall framework. Among the most challenging questions to address one can consider the following: the legal standing of decentralised governance structures, the legal validity of smart contracts or the development of interoperable standards. 

INATBA is the International Association for Trusted Blockchain Applications, dealing with blockchain developments in several sectors.

The energy sector was identified early on as one of the most sensible use cases for distributed ledger technologies. Now that a variety of pilot projects are in operation around the globe, it is crucial to receive reliable data and peer review on the feasibility of P2P trading in real-world markets and the resulting implications for regulation, infrastructure investments and business models.

Peer-2-peer energy trading models are challenging policymakers across the world to regulate them in a fair and technology-neutral manner through initiatives like regulatory sandboxes and updated standards.

This Task Force will study and compare international pilots of DLT-enabled P2P energy trading, as well as provide a forum for discussion and development of new standardisation recommendations.

It will also represent an international platform for collaboration and information exchange between stakeholders from any sector (i.e. industry, academia, non-profits) working on these new energy trading models.

The European Blockchain Partnership is planning a pan-European regulatory sandbox in cooperation with the European Commission, including for data portability, B2B data spaces, smart contracts, and digital identity (Self-Sovereign Identity) in the health, environment, mobility, energy and other key sectors.

A regulatory sandbox is a facility that brings together regulators, companies, and tech experts to test innovative solutions and identify obstacles that arise in deploying them. Regulatory sandboxes are increasingly used in a range of sectors, for example in finance, health, as well as energy, often including emerging technologies or the innovative use of existing technologies.

Use cases are foreseen in EBSI (European Blockchain Services Infrastructure), which is the network of distributed nodes across Europe that will deliver cross-border public services, and outside of EBSI, in the health, environment, mobility, energy and other sectors.

Targeted areas: data portability, B2B data spaces, smart contracts, and digital identity.

Energy Web Foundation platform: leveraging blockchain to achieve a more transactive energy system. EW focuses on fostering a community of practice and building core infrastructure and shared technology, speeding the adoption of commercial solutions.

EW also grew the world’s largest energy-sector ecosystem - comprising utilities, grid operators, renewable energy developers, corporate energy buyers, and others- focused on open-source, decentralized digital technologies.

In 2019 EW launched the Energy Web Chain, the world’s first open-source, enterprise blockchain platform tailored to the energy sector.

EW then launched the Energy Web Decentralized Operating System (EW-DOS), including applications and software development toolkits, i.e. a “blockchain-plus” suite embedding Energy Web Chain. EW-DOS is aimed to be applied in any regulatory context or market framework. With EW-DOS, anyone— utilities, startups, individual customers—should be able to write an application on their laptop and instantly deploy it at enterprise scale without needing any of their own infrastructure.

EW partnered with several projects/initiatives around the globe, including those linked to Power Ledger (transactive microgrids for local energy communities) and Share and Charge (e-mobility platform).

The platform is based on Ethereum but aims to achieve better scalability and faster finality of transactions by use of a Proof of Authority algorithm, called Aura.

Alastria represents a national blockchain initiative across different sectors founded in 2017

It is a non-profit consortium aiming to accelerate digital transformation through blockchain technology.

Several Spanish companies from the areas of banking, energy and telecommunications came together to form Alastria and now it counts more than 560 members from the private and public sectors.

It aims to develop a semi-public distributed ledger technologies infrastructure and a collaborative multipartner digital platform that will be compliant with Spanish and EU regulatory and legal frameworks.

Alastria has developed a novel digital identity model coined Alastria ID.

IoT consists of networked objects that sense and gather data from their surroundings, which is then used to perform automated functions to aid human users (creating insights and solutions).

Most IoT infrastructures have the following shortcomings, hindering their scalability and wide adoption:

  • The IoT centralised governance (typically based on a central cloud service) represents a central point of failure.
  • IoT distributed architecture: each IoT node is a possible point of failure and a system of nodes with several infected devices can collapse quickly.
  • IoT devices are gathering growing amount of data and there may be several confidentiality, authentication and privacy issues.

Blockchain capabilities (like decentralisation, immutability, transparency, auditability, data encryption and resilience) applied to IoT can help solve the shortcomings above by:

  • enhancing fault tolerance and removing singular points of failures.
  • Protecting personal data of IoT users thanks to the Blockchain’s tamper-proof property and the absence of third-parties controlling the data.
  • enabling IoT device autonomy, and end-to-end communications (no need to go through a centralized server for performing automation services). Participants in blockchain networks can verify the integrity of the data they are sent, as well as the identity of the sending participant.
  • IoT data and events stored on the blockchain are immutable, therefore there is guaranteed accountability and traceability. Reliability and trustless IoT interactions are a major contribution of blockchains to the IoT.
  • Blockchains smart contracts can treat IoT interactions as transactions. They can help perform security functions like access control and authentication to enhance security.

3c2. Internet of (energy) Things

We saw that integrating blockchain and IoT can deliver several benefits.However most IoT devices do not have cryptographic, computational and storage capabilities for engaging in blockchain consensus algorithms. To account for these limitations, different integration paradigms have been proposed and most of these configurations the IoT edge devices only act as simple transaction issuers, without hosting an entire copy of the blockchain. Clearly, other full nodes in the integrated IoT/blockchain network need to carry out the block validation tasks.

The different paradigms which can be considered to integrate blockchains and IoT are:

a) Gateway devices as end-points to the blockchain: All communications go through the blockchain, while the IoT gateways act as end-points to the blockchain network. In this case, the IoT devices will be registered to the gateway device, and the gateway issues transactions to the blockchain. In this approach, not all of the data transferred needs to be stored on the blockchain. The degree of decentralization achieved through this approach is not as fine-grained as in the case where devices issue transactions directly to the blockchain.

b) Devices as transaction-issuers to the blockchain: The IoT devices are simply issuing transactions to the blockchain (and not carrying a whole copy of the blockchain). Similar to the previous approach, all IoT interaction events are logged onto the blockchain for secure accountability. The trade-off here is higher degree of autonomy of IoT devices and applications, versus increased computational complexity of IoT hardware (IoT devices can be provided with cryptographic functionality).

c) Interconnected edge devices as end-points to the blockchain: IoT gateways and devices issue transactions to the blockchain and can communicate with each other off-chain. This scheme is more suited to scenarios where interactions are much more frequent and high throughput, low latency, reliable IoT data is required.

d) Cloud-blockchain hybrid with the IoT edge: This approach is an extension to the previous one, whereby IoT users have a choice to use the blockchain for certain IoT interaction events, and the remaining events occur directly between IoT devices though a cloud. The challenge is to optimize the split between the interactions that occur in real-time and the ones that go through the blockchain.

In the classic view of the power grid, there are essentially three hierarchical data control/processing levels: the control center level, the substation level, the field device level

The field devices are located near the process and collect their input data from instrument transformers, hence they are the most productive sources of data in the overall architecture. The field devices communicate among each other to enable low-latency operations, as well as with the next higher layer, the substation automation level.

At the substation automation level a small configurable subset of data (approx. 15%) from the field devices is accumulated – still within the context of a single substation.

To manage power flows across the entire grid, the control center is the central point for Supervisory Control and Data Acquisition (SCADA System). On this level, only a few relevant data points from all substations in a grid are accumulated via Remote Transmission Units (RTUs), analyzed and acted upon to maintain a stable energy supply.

The energy value chain - from generation, transmission, down to distribution and consumption - has become more complex and less hierarchical. An internet of energy (things) is emerging, where the things are the smart energy infrastructure components, e.g. generation plants, loads, storage, energy meters, equipment like circuit-breakers, transformers, etc.

The biggest hallmark in the “Internet of Energy” age is the greater interdependence of all parts of the grid. A greater need for communication among all participants in the energy infrastructure is emerging.

In the old world, usage of data was restricted to predefined silos and hierarchies. In the new world, data from one corner of the grid may be needed to influence decisions outside of its classic “reporting line”.

The Internet of Energy can be defined as a networked system of smart energy infrastructure components and assets. Digital and ICT solutions are key to make this networked system work properly.

Thanks to the communication interlinkages of the components and together with modern IT technology (e.g. cloud computing), the security, affordability and sustainability requirements of modern energy supply can be better fulfilled.

Several companies and initiatives are working on the integration issues of blockchain-Internet of Energy. They are making research and development efforts aimed to:

  • test new grid management models and tools which can optimize the energy system operation and maintenance in an increasingly complex grid infrastructure.
  • Implement new applications and services for a more affordable and sustainable energy supply.

Companies will need to build competence in both fields – blockchains and IoT -  in order to be successful in the market, and of course while complying with changing regulatory frameworks.

In South Korea, Swytch has prototyped a DLT platform to certify and reward environmental friendly behaviours. Token supply will be driven by data collected from smart meters and IoT devices. The prototype is tested in collaboration with European renewables aggregator e2m.

The objective is to offer DLT tools to track energy supply, provide carbon footprint and leverage data analytics gathered with a horizontal approach to grid management application design and implementation.

Swytch enables people, businesses, municipalities and other entities to get rewarded for sustainability actions — to the extent these actions can be tracked and measured using a combination of smart sensors and IoT devices.

Within the Switch networks, tokens are created every time an energy producer generates renewable energy or another sustainability action is taken that can be measured via a sensor or IoT device.

The IOTA Tangle is the first open-source distributed ledger specifically being built to power the future of the Internet of Things (IoT), with feeless microtransactions and data integrity for connected devices and machines.

Since November 2017, IOTA has been running the Data Marketplace initiative with the participation of Energinet and several industrial and IT companies.

After running tests on distributed identities, Energinet is now shifting toward exploring the potential of IoT devices integrated with the electricity markets with the IOTA Tangle.

Energinet and IOTA will explore and test the possible use of IOTA in creating new products and services in the energy system centered on using IoT devices to accelerate the green energy transition, e.g. to manage heat pumps and electric vehicles towards using energy when there is an abundance of green energy in the grid.

This collaboration will include services applicable to Energy and adjacent areas such as smart cities, smart buildings and mobility. This will be done through joint Proofs of Concepts and participation in collaborative IOTA initiatives.

Based in the US, Oli is focusing in optimisation of energy system components, such as single power plants, demand services, storage providers but also more complex energy systems comprising multiple components.

The energy system consists of many ‘energy cells’ – essentially virtual power plants (composed of generation units and loads) - that need to work in collaboration to provide some grid services. These ‘energy cells’ communicate with each other via blockchain technology.

Oli uses blockchains to enable virtual power plant operation that can also provide grid services. Oli developed a software platform that outsources tasks such as data storage and optimisation to cloud services.

Oli is member of the Energy Web Foundation.

The “energy cell” is typically composed of at least one generation unit and one or multiple loads. Those can be single buildings, but also building complexes and entire areas.

OLI’s modular design also allows optimizing subcells, individual flats for instance. Consumption and generation data, combined with external data, such as weather forecasts ensure the cost-efficient use of generation units, loads and storage systems. To do so, OLI communicates with other OLIs in many different “energy cells” via Blockchain.

Marketing energy to third parties is possible – grid services can be provided to grid operations within a virtual power plant framework.

OLIs open architecture ensures high interoperability as a multitude of loads (household equipment, and electric vehicles for example) and different sources of electric energy made by different manufacturers can be integrated.

Being part of a community, the users can share electricity within neighbourhoods, districts, regions and entire countries.