INTERNATIONAL NEWS

The Energy Web launched as first blockchain tailored for energy

 Zug, Switzerland: The Energy Web Foundation (EWF) announced June 19 that it had launched what it calls the world’s first public, open-source, enterprise-grade blockchain tailored to the energy sector: the Energy Web Chain (EW Chain).

          More than 15 EWF Affiliates—including utilities, grid operators, and blockchain developers—are hosting validator nodes for the live network. In addition, EWF is currently tracking 17 decentralized applications (dApps) running on Energy Web test networks that were expected to transition to the live network over the coming weeks. The first wave of dApps focuses on making it easier for individuals and companies to buy renewable energy, enabling customer-owned devices like batteries or air conditioning units to balance the grid (and be paid for doing so), and simplifying the way electric vehicles are charged.

          The organizations hosting validator nodes for the Energy Web Chain form the foundation of the Energy Web chain’s public Proof-of-Authority (PoA) network design: a publicly accessible network with permissioned validators. The chain itself is public; any company, individual, or internet-connected device can transact across the network without permission. This dramatically increases network interoperability and reduces solution development cost. At the same time, the chain’s validators are permissioned—they are known energy market participants identified and affiliated with EWF. EWF and its validators have in essence “staked their brand” to underpin this energy-specific blockchain.

          All blockchain systems rely on a technical system for validating transactions securely, uniquely and non-reversibly. Classic bitcoin is validated by a process known as Proof of Work, which involves solving ever more complex mathematical calculations. One problem with that system is the amount of energy consumed in the process. Massive server farms, known as bitcoin mining operations, have sprung up around the world just for that purpose, including Cryptoglobal in Hamilton, Ontario and Hut 8 in Drumheller, Alberta. Also in this issue is a story about Hydro-Quebec seeking to secure 300MW of capacity for blockchain mining – miners like to set up where power supply is inexpensive. Worldwide, the energy consumed for this purpose has grown to exceed that of some countries – for example, Switzerland, according to a July 4 story in The Verge (theverge.com[2]). The Proof of Authority protocol is far less demanding of energy, and does not suffer from another of PoW’s limitations, an inability to process large numbers of transactions quickly[3] (hence, not easily scalable to large volumes).

          The PoA-based design comes with three additional benefits for the energy sector: scalability, energy efficiency (which also equates to low transaction costs for energy market participants using the network), and increased regulatory compliance.

          “The Energy Web is essentially a new operating system—a new digital DNA—for the electricity grid,” explained Jesse Morris, chief commercial officer of EWF. “Other token-based energy blockchain projects are focused on delivering singular decentralized applications. By contrast, the Energy Web is a blockchain infrastructure project focused on supporting all blockchain developers looking to accelerate the global transition away from fossil fuels toward efficiency and renewables. That’s a huge and exciting distinction.”

          The Energy Web Chain is a relatively robust form of blockchain because it integrates known legal entities into its validation system rather than relying exclusively on anonymous online participants. In a report published by Michael Barnard of TFIE Strategy Inc., EWF representative Peter Bronski said, “the EW chain uses a new version of the consensus mechanism called Proof of Authority, in which the validator nodes are trusted, permissioned, and known energy companies. On other public networks, these validator nodes are anonymous miners. This kind of transparent oversight is important when managing critical energy infrastructure.” This characteristic means the Energy Web Chain doesn’t have to devote the same degree of technical resources to establishing participant credibility, allowing for certain design advances.

          EWF formed in early 2017 with support from co-founders Rocky Mountain Institute and Grid Singularity, as well as a cohort of about 12 initial Affiliates. The number of affiliates had passed 100 by early 2019.

          See also the lead story “Energy Web has launched.” For more information, visit energyweb.org.

[2] https://www.theverge.com/2019/7/4/20682109/bitcoin-energy-consumption-annual-calculation-cambridge-index-cbeci-country-comparison

[3] https://www.binance.vision/blockchain/proof-of-authority-explained

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