Blockchain in Energy Trading Michael Merz - PONTON GmbH © PONTON GmbH Why Blockchain @ PONTON… • Peronal interest: Crypto Currencies • PONTON: B2B-Integration between Unternehmen (Ponton X/P) • Annoyed by Hype already in 2015, April 2016: „Brooklyn Microgrid“ • May 2016: Book chapter, available developers, focus on business case „trading“  June 2016: Start on PONTON Blockchain Team © PONTON GmbH Blockchain in the Press © PONTON GmbH Data Exchange Today (E.g Ponton X/P, EFET Box, suppluer switching, …) Applications Applications Applications Applications Applications Comm Module P2P Communication © PONTON GmbH Comm Module Applications Applications Comm Module Comm Module Comm Module Comm Module Applications Applications Comm Module Comm Module Process Platfors today (E.g Exchanges, Uber, Airbnb, Transaction Systems, …) Clients Applications Server © PONTON GmbH Applications Applications Applications Applications Applications Applications Applications Prozess-Plattform Data Exchange over the Blockchain Applications Applications Applications Applications Applications Applications Applications Applications Applications Standardisation Low cost of operation Nodes © PONTON GmbH 100% Availability Data Exchange over the Blockchain Applications Applications Applications Applications Applications Applications Applications Applications Applications Transaction Data Communication Nodes T T T TT T T TT T T T TT T © PONTON GmbH Synchronisation of Nodes T T TTT T T TT T T TT Data Replication T T Data Exchange over the Blockchain (Validation Phase) Applications Applications Applications Applications Applications Applications Applications Applications Applications Validator Nodes © PONTON GmbH OK? Data Exchange over the Blockchain (Validation Phase) Applications Applications Applications Applications Applications Applications Applications Applications Applications Validator Nodes © PONTON GmbH OK! Trustlessness Data Exchange over the Blockchain (communication history stored in a sequence of blocks) Applications Applications Applications Applications Applications Applications Applications Applications Applications Nodes © PONTON GmbH Cryptographic Provability „Immutability“ 10 Wholesale Market Scenario 2030: Hierarchical Markets for the Balancing of local Grids DSO Grid Balance € Trades Residual Load Provider Area € Grid-wide Market E- Residual Load Provider Village € Regional Market E- Residual Load Provider Local Market € © PONTON GmbH EE16 The „Blockchain & Energie“ Space Vertical Focus (energy) P2P Trading - Microgrid - Local grid Flexibility Market - TSO / DSO Grid P2P - Wholesale market Settlement - Financial - Physical Grid Control - TSO vs DSO Internet of Things (Lift device data into the digital sphere) Horizontal Technical Features & Challenges Access / Identity Management / Archive historic blocks Load / Performance / Stability / Security / Privacy © PONTON GmbH 17 Project Enerchain The world‘s wholesale first energy trade over the blockchain © PONTON GmbH 18 Project Enerchain 25 Participants (2 logos hidden) © PONTON GmbH 19 Local Market for Flexibility based on Blockchain Technology Other Market Price Index Battery API 50 €/MWh Power Price (front hour) €/MWh Agent: Exchange Demand Supply Agent: Batterystorage € 100% Battery 0% 100% Electrolyser 50% Marketplace (via Blockchain) 100% Electric Vehicle 0% API 100% Office Building (heating) 0% Agent: Electrolyser API © PONTON GmbH Agent: Electric Vehicle Agent: Office Building 24h NEW 4.0 – „Norddeutsche Energiewende“ Region Hamburg/Schleswig Holstein, > 50% RES share, develop Smart Market for Flex © PONTON GmbH 21 GridChain – TSO / DSO Process Synchronisation TSO requests balancing power from aggregators, which in turn activate load at local generators DSOs are informed after the fact TSO DSO DSO Aggregator DSO DSO Supplier CHP Gen Gen Gen Gen Gen Gen Gen Gen BGR © PONTON GmbH 22 Why use Blockchain Technology for DSO / TSO Integration? • Why Blockchain? – – – – Low cost technology De-facto 100% availability (Bitcoin as a long-term proof of concept of years) 1:N communication Integration of instantaneous settlement  Combined, these features enable new types of software applications for the collaboration of market partners © PONTON GmbH GridChain – TSO / DSO Interprocess Communication using the Blockchain TSO DSO DSO Aggregator DSO DSO Supplier Gen Gen Gen Gen Gen Gen Gen Gen BGR © PONTON GmbH 24 The Blockchain is used as a Data Storage and Communication Layer RRE RRE DSO RRA RRA DSO RRA DSO RRE RRA RRE DSO Sek © PONTON GmbH Sek Sek Sek Sek Simulator Lief4 Lief3 Lief2 RRE12 RRE11 DSO3 RRE9 RRE10 Prozess DSO2 RRE8 RRE7 DSO1 Lief1 RRE6 RRE5 RRE4 RRE3 RRE2 RRE1 RRA3 RRA2 RRA1 Prozess TSO Simulation Mode The Blockchain is used as a Data Storage and Communication Layer Visualisierung Node Node Cloud Lief4 Lief3 Lief2 RRE12 RRE11 DSO3 RRE10 RRE9 DSO2 RRE8 RRE7 DSO1 Lief1 RRE6 RRE5 RRE4 RRE3 RRE2 RRE1 RRA3 RRA2 RRA1 Prozess TSO Production Mode Blockchain Visualisierung Node Node Node Node Node Node Cloud Cloud Inhouse Cloud Inhoue Cloud © PONTON GmbH Blockchain Where is the Business Case for Blockchain? • • • • • • • High availability at reduced cost (operation & transaction) Disintermediate Integrate token currency Allow for minimal transaction volumes through reduced transaction cost Directly link people to people / assets to assets Trustlessness Standardisation effect „So, again, where is the business case in using blockchain technology?“ It is the mix, stupid! © PONTON GmbH 27 Why is it so difficult to „Think Blockchain“? Classic Approach Blockchain Approach ? Business Case ? Software Design / Spec This won‘t work! © PONTON GmbH Software Implementation Blockchain Technology Operation Blockchain (e.g Ethereum) Blockchain-based design is a permanent elevator ride PONTON / Blockchain Hall of Fame Find more information here: http://enerchain.ponton.de © PONTON GmbH plus projects under NDA… Thank you Michael Merz merz@ponton.de © PONTON GmbH 30