During the first two weeks of this month, representatives from nearly 200 countries met in Katowice, Poland, for this year’s UN Climate Change Conference (COP24). Many in the climate community have grown increasingly impatient with the perceived inability or hesitancy of many nations to take active, decisive steps to transition the world’s energy systems extensively and rapidly toward low-carbon solutions. In fact, 15-year-old Swedish climate change activist Greta Thunberg made international headlines when she criticized the world’s leaders for as much during COP.
Many in the energy blockchain community—Energy Web Foundation (EWF) included—share Thunberg’s impatience. We need to take bold, swift action. Which is why the energy sector’s first-ever blockchain hackathon was so excited. Hosted by Swisspower across 3–5 December in Bern, Switzerland, it brought together 40 developers from 12 countries to transform a spark of an idea into a working prototype in support of a digitized, decarbonized grid.
Switzerland as an energy blockchain hub? Yes!
So the energy sector’s first blockchain happened in … Bern, Switzerland? It didn’t happen in a known tech hub such as San Francrisco and the Silicon Valley or Tokyo or Shanghai or Berlin?
“There are different energy blockchain communities popping up around the globe. Berlin—where EWF has a big cluster of team members—is certainly a hotspot. There is also some activity in the U.S. But there’s no single energy blockchain hub; at least not yet,” explains EWF’s chief commercial officer, Jesse Morris. “With Swisspower exploring the technology, with Zug and the surround ‘Crypto Valley’ as one of the fastest-growing blockchain hubs, and with EWF based here in Switzerland, why can't we make Switzerland the nexus of energy blockchain?
Tacking known challenges to blockchain’s adoption in the energy sector
The hackathon presented an opportunity for the energy blockchain community to make a joint concerted effort solving key issues currently hampering progress in the field. In particular, three organizations each hosted a challenge for the hackathon participants: host and EWF Affiliate Swisspower, Iberdrola (also an EWF Affiliate), and EWF itself.
The Iberdrola challenge: Connecting real-world assets to a blockchain is a complicated problem. In order to solve it, the industry needs to fundamentally change the way energy assets are transmitting data, including the infrastructure to measure load, monitor and manage energy assets, and connect individual meters to the grid. Iberdrola challenged startups to come up with solutions to tackle this connection problem (also known as the “device registry” question) in a non-disruptive way for existing electricity infrastructure. Any solution needed to be low-cost when implemented, acceptable to existing regulations, and leverage the potential of decentralized technologies.
The Swisspower challenge: Swisspower has already deployed a pilot for billing its customers (mainly households) for electricity consumption using blockchain technology to ensure data validity. The next step is to track the production and consumption of electricity in small communities. The ultimate goal is to enable communities to use solar energy for both self-consumption and trade. Swisspower challenged the startups to develop a model that allows communities to control their energy assets, optimise their consumption, and trade electricity at economic rates.
The Energy Web Foundation challenge: In the current set-up of the carbon market, corporates are urged to track and document the GHG emitted along their value chains, as well as their efforts to offset or reduce them. While on-site production has reached a certain standard of monitoring, the amount of CO2 emitted along the supply chain is only being estimated under current means. This is counterproductive to goals of accountability and transparency. EWF challenged the startups to create a shared disclosure platform for reporting, tracking, and offsetting carbon emissions throughout corporate supply chains.
The hackathon winners: developers rose to the challenges
The main benefits of hackathons are their rapid results: in this case, the teams came prepared to deliver a minimum viable product (MVP) within 48 hours. A lot of expertise, skill, and business sense went into all the solutions presented on the final day, but three challengers in particular stood out, either due to the sophistication of their solution or the creative and complex angle they took to solving the problem.
Papers, a team from Switzerland, won the Swisspower challenge. They presented a working prototype of a platform that can optimize consumption via a mobile app, thus incentivising consumers to adopt PV panels, increasing the ROI for solar investors, and enabling platform providers (such as utilities) to deliver value-added services to consumers based on data flowing across the platform. Paper’s solution therefore offered a win-win-win business model for consumers, PV investors, and platform providers. The MVP they developed solves long-standing economic questions, as well as showing a level of code maturity ready for commercialisation.
Due to the professionalism of their presentation, business case, and technological solution they were also awarded the title of “Best Team Overall” at the hackathon.
FlexiDAO, a team from Spain known for their business sense in bringing blockchain solutions to the energy market, developed a framework for device registry on a mass-market scale called RX3 (Registration, Reputation, Resolution). Their framework is based on three different components: 1) the use of an autonomous dispute resolution system based on visual recognition and machine learning, 2) an incentivisation mechanism to attract AI companies to detect fraud or rogue behaviour and build device reputation over time (essentially creating a bounty system for smart meters), and 3) the use of a decentralized identity management system to register meters.
This approach enables a trustless and seamless collaboration via blockchain technology to solve the reputation issue of devices, while remaining low-cost and easy-to-implement into the existing energy infrastructure.
DAO IPCI, a global front runner on carbon tracking from Russia, presented a unique technical solution that demonstrates it is possible to track supply-chain emissions and offset them using multiple shared disclosure platforms. Such a platform would allow corporates to track CO2 emissions along their supply chain systems via IoT integration, and generate certificates of origin for every instance of GHG emission. The DAO IPCI solution also provides a mechanism for sharing accountability and auditing data on carbon offsetting.
The scope of their solution, coupled with its technical sophistication, is something that, to date, no other actors in the blockchain ecosystem have been able to provide.
Reflections coming out of the inaugural energy blockchain hackathon
Climate change is a pressing global challenge, and solutions developed during the hackathon are another step forward to how we tackle these issues. Companies are exploring different ways to use blockchain in the energy sector, startups are developing different solutions from renewable energy to electric vehicle charging to P2P trading to billing apps, while corporates are becoming more engaged and starting to learn what digital business models in the energy sector could look like.
By actively taking part at the hackathon, Iberdrola and Swisspower are showing initiative to deal with arising challenges that are coming with acceleration of blockchain into the energy sector and realizing investments in new software and digital solutions can be just as crucial as investing in the physical grid. Following the success of the hackathon, Energy Web Foundation continues to build and foster an energy blockchain community of startups and corporates that are developing innovative solutions to take on the energy sector’s issues.
In the spirit of the urgency of the climate change challenge, hackathons like the one in Bern are about swift action. The hackathon alone—and blockchain alone—won’t solve the bigger problem. But they’re doing what’s needed: making rapid progress to forge workable solutions. We all should be proud of such outcomes … and the challenge sponsors and hackathon participants behind them.
Natalija Sandic is part of EWF’s Affiliate Engagement team.