How blockchain can open up energy markets: EU DLT expert explains


In addition to the esoteric neoclassicism of Web3, there is a slightly less attractive but hardly less important concept of Industry 4.0, which includes new and revolutionary drivers of the next-generation industrial landscape. And, especially when it comes to the energy sector, blockchain is at the heart of these technologies.

The authors of the recently published EUBlockchain Observatory report “Blockchain Applications in the Energy Sector” are convinced that distributed ledger technology (DLT) could become a major enabler technology and has the potential to influence or even disrupt the energy sector. Has a lot of potential. This is no surprise given the five D’s of the digital green shift: deregulation, decarbonisation, decentralisation, digitization and democratization.


The report highlights the key directions for blockchain in the sector and provides them with real case studies and insights from energy market stakeholders such as Volkswagen, Elia Group, Energy Web Foundation and others.

Cointelegraph spoke to Ionis Vlachos, one of the report’s co-authors, Commercial Director for the Europe, Middle East and Africa (EMEA) region at EnergyWeb, and a member of the EU Blockchain Observatory and Forum.

Vlachos elaborated on the most intriguing parts and concepts of the document, such as the granularity criteria, the importance of self-sovereign identity, and the potential role of DLT in developing the consumption of non-electric energy sources.

Cointelegraph: To date, no blockchain/DLT solution has been widely adopted by energy system stakeholders, reports Cointelegraph. Why do you think? Can you try to answer this?

Ioannis Vlachos: The main impediment to the widespread adoption of blockchain solutions by energy system stakeholders relates to the way energy markets are currently structured. In most countries around the world, regulatory requirements for small-scale flexible assets such as residential batteries, electric vehicles, heat pumps and others make it possible to participate in energy markets only through their representation by an aggregator.

Considering a more direct market design, where flexible assets, regardless of their potential, can directly bid on the energy market, reduce their marginal cost and the participation of small-scale distributed energy resources (DERs) in energy markets will promote and promote

This need for the direct participation of assets in markets was recognized and considered a broad principle in the joint report “Roadmap on the Development of Regulatory Frameworks for Distributed Resilience” published by ANTSO-E and the European Unions. June 2021, where “access to all markets for all assets, whether direct or consolidated”, is recommended.

Blockchain technology, through the concept of Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs), provides the necessary tools to allow this direct access of small-scale DERs to energy markets.

CT: How can blockchain be used to track non-electrical energy sources such as biofuels?

IV: Blockchain technology provides a means to create a trusted ecosystem of actors, where assets, systems, and all information exchanged between actors can be independently verified through DIDs and VCs. It is of utmost importance to provide the necessary audit trails in non-electric energy supply chains such as natural gas, green hydrogen and others.

Recently, Shell announced Avelia, the world’s first blockchain-powered technology to scale sustainable aviation fuels (SAFs), as a blockchain solutions provider with support from Accenture, American Express Global Business Travel, and Energy Web. Digital is one of the book-and-claim solutions. ,

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The report claims that the application of blockchain in the energy sector could be further explored and advanced.

What are the grounds for such an optimistic conclusion?

This conclusion is drawn primarily from the premise that despite the highly regulated energy environment, we have recently seen a large number of projects in the wider energy sector that use blockchain technology. They do this either by implementing use cases outside the existing regulatory framework such as Shell’s SAF project or with the support of national regulators and market operators such as projects such as EDGE and Symphony in Australia.

The EDGE and Symphony projects are supported by state government agencies, the Australia Energy Market Operato and the Australian Renewable Energy Agency, and integrate consumer-owned DERs to enable their participation in the energy market of the future on a decentralized basis. To apply an innovative approach. the vision. In both projects, EnergyWeb’s decentralized blockchain-based digital infrastructure is used by providing participants with digital identities thus facilitating secure and efficient exchange and verification of market participant data.

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In addition, we cannot ignore the fact that blockchain technologies are referred to within the EU Action Plan for Digitizing the Energy Sector, which focuses on the uptake of digital technologies.

IV: The concept of granularity refers to the need to increase the frequency of data that will allow traceability of energy objects. Particularly in the case of electricity, moving from monthly or yearly matching of energy consumption to a more granular (eg, hourly) best practice with renewable electricity being produced in a specific location is considered best practice as it will reduce energy greenwashing. does. In this regard, Energy Web in collaboration with Elia, SP Group and Shell developed and released an open-source toolkit to simplify 24/7 clean energy procurement.

CT: Can you explain the concept of granularity, which determines the demand for blockchain in the energy sector?

CT: The report mentions a self-sovereign identity, defining it as “a growing paradigm that promotes individual control over identity data rather than relying on external authorities.” It’s easy to imagine such a paradigm shift with online personal data, but what is its significance for energy production and consumption?

IV: The importance of Self-Sovereign Identity (SSI) for energy production and consumption stems from the fact that consumer energy data can be treated as personal data. [Prosumer is a term combining consumer and producer roles by one individual or entity.] Especially in the EU setting and in light of the General Data Protection Regulation, the granularity (sampling frequency) of smart metering data can be highly correlated with the confidentiality of the data. Furthermore, given the fact that new business models are emerging that use prosumer energy data to facilitate the provision of energy efficiency and management services, the distribution, processing and distribution of their energy data through the concept of SSI It is more to empower the prosecutor to consent to storage. A luxury rather than a necessity.