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Energy Web Foundation – blockchain and digital security in energy
OECD workshop,
15 February 2018
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Agenda
1 What is EWF?
The EWF Blockchain Platform: functionality and governance 3
Blockchain and digital security in energy2
Q&A4
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What is the Energy Web Foundation?
• Foster value creation in the energy sector by promoting an open, decentralized software infrastructure built around blockchain technology
EWF’s Mission1. Work jointly to develop decentralized,
blockchain-based energy applications
2. Build an open source IT infrastructureupon which these applications can be implemented
3. Develop an ecosystem of users, application developers, and infrastructure providers
4. Educate regulators and other stakeholders and provide input to standardization bodies
What we do
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What is the Energy Web Foundation?
Advisory Board
Foundation Council
Dr Herve TouatiPresident, EWF
Senior Fellow, RMI
Dr Jon CreytsMember, EWF
Managing Director, RMI
Dr Ana S. TrbovichMember, EWF
COO, Grid Singularity
Ewald HesseVice-President, EWFCEO, Grid Singularity
Christoph FreiMember, EWF
Secretary General, World Energy Council
EWF Governance structure
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EWF Affiliate EcosystemEWF Affiliates as of Feb 2018
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Cultivating a broader “energy blockchain ecosystem”
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Energy Web Foundation - Timeline
Round B recruiting (starts in Q3 2017)
• Begins August 1st, closes May 1
Event Horizon Conference (April 2018) EWF blockchain goes live (2019)
• Second annual energy & blockchainconference
• Affiliate-only meeting during event
• Token Generation Event Q1 2019
• Release of operational EWF Blockchain platform after generation event
Task forces & core tech (Now)
• Ongoing task force work
• Alpha version of core tech released
Core tech features and testing (2018)
• Additional functionality
• Application testing and feedback from task forces
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Agenda
1 What is EWF?
The EWF Blockchain Platform: functionality and governance 3
Blockchain and digital security in energy2
Q&A4
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Expert Panel at EventHorizon 2017:”Control and security features of smart metering infrastructure“
High exposure to attacks by hackers
The current system incentivizes utilities to focus on short-term cost-savings rather than long-term investment in security
In many regions of the world utilities lack qualified professionals to properly assess all risks and supervise outsourcing of smart meters roll-out
Protocols regulating communication among utilities, smart meters, home appliances Insufficiently secure
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Expert Panel at EventHorizon 2017:”Control and security features of smart metering infrastructure“
Governments, including regional authorities, should set up institutional structures
to accelerate the process of establishing safety guidelines
Device manufacturers and electric utilities as operators of smart meters should pay
more attention to security issues
Responsibility for liability issues should be fully clarified
Blockchain is a possible solution
Conclusions
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Expert Panel at EventHorizon 2017: ”Control and security features of smart metering infrastructure“
“The real benefit of blockchain is that the protocol and network themselvesalready have security implemented”
Jan-Peter Kleinhans, IoT-Security Project Leader of the think-tank Stiftung Neue Verantwortung
“Single points of failure can be avoided. When they are distributed, an attacker would have to hack each single device to obtain each single key. Devices talk to each other over this
decentralized blockchain, which does not have a single point of failure. That is why there is such a good fit between blockchain and smart meters.”
Christoph Jentzsch, co-founder of blockchain tech company Slock.it
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Blockchain features that enhance security
Feature Effect on security
Immutability /Authenticity
Records of transactions cannot be altered once they have been written on the blockchain (unless all on the network agree)
Traceability Every transaction added to a blockchain is digitally signed by both the sender and the receiver, making them accountable for it
Smart contracts Can facilitate, verify or enforce rules among parties
No single point of failure
The inherent decentralized structure of blockchains makes the system significantly more resilient to attacks.
Operational resilience
A node under attack can be made redundant and continue to operate business as usual.
Privacy Blockchain can provide high standards of privacy while not relying on a centralized authority (ZkSnark, Secret Store)
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What are blockchains capable of in energy?
Source: DENA / ESMT survey of 70 German energy sector executives – Nov 2016
Process improvement (total = 55)Disruptive platforms (total = 52)
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Communication
Grid management
Security
Mobility
Automation
Sales & Marketing
Billing
Metering anddata transfer
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Transactiveenergy
P2P Trading
Distributedgeneration
Additional use cases
• RMI: 27
• GSy: 30
• PWC: 20
Game changer to potential game changer
EWF and others have identified over 100 potential applications to date
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We are focused on four specific application domains
Taskforces conduct research and supporting Affiliate app commercialization
Certificates of Origin Utility Billing
Demand Response Transactive Energy
Description: RE generators / buyers interact directly, use smart contracts to streamline overall CO process through automated issuance, tracking, and retirement
Detail: EWF is developing “Origin”—an open source, decentralized energy certification application
Description: Utilities, third parties use cryptographic identities to manage metering, customer settlement, advanced rate implementation and/or customer switching
Detail: EWF is supporting Affiliate “lighthouse projects”
Description: DR aggregators use secure smart contracts to conduct aggregation, real-time M&V, settlement, and trading for EE and DR programs
Detail: EWF is supporting Affiliate “lighthouse projects”
Description: Devices automatically respond to local grid conditions in real time via two-way price negotiation based on a combination of user preferences and grid needs
Detail: EWF is developing an app, a recursive transactivemarket structure / simulation environment
What are blockchains capable of in energy?
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An example of process improvement (1/2)Certificates of origin today
Renewable Generator
Qualified Reporting Entity
REC Certification Entity
Certificate Tracking System
Annual Audit
BrokerAggregator
OTC Markets
REC Exchange
REC BuyerRenewable Generator
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certificates of origin today Trading & Ownership Tracking
Redemption, Retirement, & Reporting
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Renewable Generator
Certificate Buyer
Certificate of Origin Tracking System
Blockchain
Compliance or Disclosure Entity
Onboarding & Issuance Trading & Ownership Tracking
Redemption & Retirement
Reporting
• Lower transaction costs
• Faster execution (minutes - not weeks)
• Reduced working capital requirements
• Reduced labor
• Increased transparency
• Increased cyber-security
An example of process improvement (2/2)
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Certificates of origin with blockchain: high level “Origin” architecture
• Number of vulnerable points reduced
• Higher data reliability
• Increased transparency and traceability
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Issues that blockchain can address
• Smart contracts for IOT
• Cost of transactions
• Cyber security / data privacy
Where blockchain can make a difference –and how regulation needs to be adapted
Wholesale
Distribution Edge
kWh $
Emerging system architecture
• Digital ID based on blockchain• Metering data on blockchain
(allowing customer access)• License for small scale trading • Direct payment of energy between
parties• Billing data access for grid operator
(DSO)
Regulation to be added
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Standards under development – IEEE, ISO + Horizon research
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Agenda
1 What is EWF?
The EWF Blockchain Platform: functionality and governance 3
Blockchain and digital security in energy2
Q&A4
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The EWF Platform: Overview
Hydro WindSolar
DERs Dist.Networks
CoalGas
Nuclear
Blockchain (core and additional functionalities)
Application
Blockchain infrastructure
Deviceinterface
• Proprietary• For profit (mainly)
Certificates of Origin
Transactive Energy
EV Management
• Open source• Not-for-profit
Emerging blockchain and energy ecosystem
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EWF Blockchain Governance
• Open but Permissioned Network (proof-of-authority consensus mechanism)
• Higher degree of scale, Interoperability with other chains
• Identity of Authorities to be known – selection criteria to be determined but aim to reach diversity (geographic, company size) and retain focus on energy
• Regulatory Oversight – role of regulators still under discussion but agreement on enabling oversight – sandboxes need to be initiated
• Regulatory Liability – at app level
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