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Using the Blockchain for Energy Trading
Michael Merz - PONTON GmbH
© PONTON GmbH
Energy Trading in the Context of the Energy Change
• Volatility and congestion drives physical flow of electricity
• Short-term balancing required at local grid level, distribution grids and transmission grids / control zones– P2P trading between prosumers and consumers
– Demand-side / supply-side management driven by DSO
– Local „Smart Markets“ for flex and local balancing
– Tendency towards spot market and short-term trading on the wholesale market
• Trends: – Lower volumes per trade, lower CAPEX for renewables, lower price per MWh,
smaller MPs, increasing cost (regulation!), market access & transaction fees remain constant, ...
trading is a loss-maker…
A radically new approach is needed!
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Scenario 2030: Hierarchical Markets for the Balancing of local Grids
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Local Market
€E-
Regional Market
ResidualLoad
Provider
€
E-
Area
Village
DSO Grid
Grid-wide Market
ResidualLoad
Provider
€
E-
ResidualLoad
Provider
€
E-
Wh
ole
sale
Mar
ket
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Trading of Power – a Classification
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Unconstraint Market Grid Constraints apply Unilateral DSO Regime
Traffic light phases
Wholesale
Flex-Trading
P2P-TradingIn the microgrid
Regio
nal reach
ENKOSmart Market
Trading only affects distribution of generation
Trading has a physical impact
Trading always hasa physical impact
Trading may have a physicalimpact
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10 Misconceptions of „Blockchain“
• Blockchain is slow
• Blockchain is expensive
• Blockchain is unsecure
• Blockchain is secure
• Privacy is supported by Blockchain
• Blockchain is a database
• 15% of world BIP over blockchain in X years
• The effort for mining determines the value of bitcoin
• Blockchain is a decentralised process
• „My blockchain supports 10.000 / 25.000 / 100.000 transactions per second“
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What Type of Blockchain?
1. Crypto Currencies– Good: transfer and storage of value (Bitcoin, Dash, Zcash, …)
– Bad: any other application
2. Smart Contracts– Good: Crowdfunding, Co-Finance, ICOs (Ethereum)
– Bad: performance, any program logic beyond ICOs
3. Blockchains for B2B Integration– Good: Communication, data storage, integrity, consensus (HyperLedger, Tendermint,
BigChainDB, …)
– Bad: low level of application support
4. IoT Blockchains– Good: Connect a huge numbers of devices, less consensus, less integrity (IOTA, …)
– Bad: only available for a few months
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Why Blockchain?
• Highly available
• Low cost
• Instantaneous settlement
• Trustlessness
• Integrity
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Nodes
Appli-cations
Appli-cationsAppli-
cations Appli-cations
Appli-cations
Appli-cations
Appli-cations
Appli-cations
Applications
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Project Enerchain4.10.2017: „The world‘s first P2P wholesale energy trade over the blockchain“
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Busy on the Blockchain…
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39 Participants
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The WRMHL Architecture
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ApplicationSphere
Vertical Clients
Client Adapters withpluggable applicationlogic
HostedEnvironmentNode Adapters with plugabbleapplication logic
Nodes
E.g. = Enerchain, = Gridchain
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Gartner Hype Cycle… and how to escape from the trough☺
Gartner Hype Cycle für technologische Innovationen
Blockchain
Now?
The Wormhole
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Where is the Business Case for Blockchain?
• High availability at reduced cost (organisationally & technically)
• Disintermediate
• Integrate token currency
• Allow for minimal transaction volumes through reduced transaction cost
• Disintermediation – directly link people to people / assets to assets
• Trustlessness
• Standardisation effect
„So, again, where is the business case in usingblockchain technology?“
It‘s the mix, stupid!
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