As mentioned in previous posts (see links, below), blockchain based peer-to-peer applications are particularly suited to energy trading. At the recent EMART Energy 2016 industry conference and exhibition in Amsterdam, the first peer-to-peer energy transaction took place as part of a live demonstration.
(Read some of our previous posts on blockchain technology: #blockchain; German Energy Industry moves to take Advantage of Blockchain Technology)
However, such transactions are more an indication indication of much bigger things to come. Ponton, the developer of the first blockchain energy trading system, ‘Enerchain’, is one of 60 private and public sector organisations taking part in a large scale distributed renewable energy experiment recently launched in the northwestern German states of Hamburg and Schleswig-Holstein.
Germany’s Ministry of Economic Affairs and Energy (BMWi) kickstarted what’s known as NEW 4.0 (NEW for Norddeutsche Energie Wende and 4.0 for the fourth phase of the Industrial Revolution) with 44 million euros of seed funding. By year-end 2020, project partners intend to introduce an open, decentralised and integrated platform for electricity generation, transmission, distribution and use that relies entirely on renewable energy.
NEW 4.0 is viewed as the seed from which a new all-renewable energy infrastructure for Germany will develop, one that will not only serve the entire nation, but export emissions-free electricity across the EU.
The state governments of Hamburg and Schleswig-Holstein are among the 60 partners participating in NEW 4.0, the overarching aim of which is to serve as a example that demonstrates the feasibility of a new digital distributed renewable energy infrastructure that’s cost effective, socially beneficial and environmentally friendly not only for Germany, but for Europe as a whole.
Blockchain’s attributes make it ideally suited to developing NEW 4.0’s smart, distributed renewable energy market, the primary function of which will be balancing supply and demand between renewable energy producers and consumers in the two northwestern states.
“The blockchain service is, at its core, the possibility to register and store transactions in a distributed database and in an immutable form.” –Ponton
“Ponton is convinced that industrial B2B processes can be dramatically improved towards higher reliability, higher performance and better traceability. This, however, requires a transformation of processes, interfaces, and applications that a single participant cannot impose on a whole sector.”
Schleswig-Holstein has emerged as a centre of onshore and offshore wind power. With a population of less than 3 million, the state’s power generation capacity far exceeds demand. Hamburg, on the other hand, is a huge consumer of energy. That makes the two states natural counter-parties in NEW 4.0’s open, distributed energy market, project partners point out.
NEW 4.0 will also address a big problem that has been plaguing Germany’s renewable energy transition. Wind and solar power capacity has grown so fast that producers have had to offer to pay consumers to take on more load at various times of the year. With increasing frequency, grid regulators have to instruct wind farm operators and other producers to curtail production as a result.