From its initiation to now, power as an entity and technology has seen immense growth and now its meets another advancing technology, the blockchain to further enhance its outreach. Estonia’s Energy Grid collaborated with WePower(WPR), a blockchain technology based energy trading platform to deliver a nationwide pilot for energy tokenization.
The company announced that the first of its kind in the world initiative will utilize an Ethereum-based ledger to tokenize energy consumption and production data, this will further facilitate more efficient trades. WePower, in partnership with Elering, a transmission system operator (TSO), stated that the pilot is “paving the way for the digital revolution of the energy sector.” As per company claims, the energy consumption data of 26,000 hours and 24TWh of energy has already been successfully uploaded to the blockchain, for a total of 39 billion Smart Energy Tokens.
Estonia presents an ideal infrastructure for the testing of the pilot as it boasts a 100% smart meter coverage along with a data sharing platform dubbed as Estfeed. Estfeed allows the consumers to download their data and share it with any persons or companies of their choosing.
Early on the energy markets were governed by a few large providers, with the adaptation of renewable energy a more distributed system was established “where energy buyers would not need to rely on one single source of electricity but could potentially pick and choose the producers that would fit their needs the best and transact with them directly,” as noted by Tokenization Executive Summary by WePower. The summary also states:
Transactions in electricity markets are settled in hourly, 30 minutes or, in some markets soon, on a 5 min basis. This means that to process transactions between a single consumer and producer would create at least 8,760 data entries for a year and if you take a 10-year tenure of a standard PPA[Power Purchase Agreement] this would grow to 87,600 data entries at the point when the contracts are issued. In order for this system to reach meaningful scale, it needs to support thousands of buyers and hundreds of generators.
The blockchain technology perfectly fits the jigsaw of these complicated data requirements. The CTO Kaspar Karleep, noted in a statement:
“Projects of this scale and ambition haven’t been attempted before, in part because of the complexity involved, but also because energy data is highly sensitive. Blockchain is the ideal enabler because its foundational principle is trust, which can be leveraged to bring revolutionary transparency to the industry.”
WPR believes that recording the minutiae of individual consumption or production reliably with the aid of blockchain technology can reduce inefficiencies and ease the transition to green technologies.
The CEO of Elering, Taavi Veskimägi, Said,
“Future clean and secure energy will depend on innovative solutions and consumer empowerment. However, a major barrier in most countries is lack of access to energy data. Estfeed unlocks data access within Estonia and we are now working towards doing this on an international level. WePower’s proof of concept is important for showing how data access leads to innovation.”
According to Crypto Briefing, Estonia was listed amongst the top places to start a company for those involved in the blockchain industry. Though the extent to which blockchain technology can curb the future of the power industry remains to be seen, the collaboration is a welcome step towards mainstream adoption of blockchain technology.