Blockchain and energy: the revolution of the prosumers

Eduardo Soto Sepúlveda
CEO | Phineal

3 JULY, 2018

This year for sure you have heard of blockchain and the wide variety of applications that this technology offers. Although the best known application are the crypto currencies, it is possible to use blockchain in almost any process that involves transactions of information through the Internet such as files, images, videos, emails, among others. It is for this reason that the blockchain applied to energy takes great relevance, since it allows to make more flexible and efficient the processes of generation and consumption, besides showing transparently this information to the users. The blockchain used in the area of energy, will be the inflection point for the change of the systems of transport and storage of this one, without the necessity of a “notary of the energy” with which the processes will be more economic, efficient and safe.

Undoubtedly, this has been one of the years where the blockchain has taken on greater relevance in the world. It has become a common theme in conversations and discussions in technological innovation circles. Chains of information blocks and data mining are increasingly recurring themes, as well as the large number of potential applications that this presents. Although there is a lot of information on the net to explain what the blockchain is, I recommend watching the following video that explains in a general and precise way the advantages and qualities of this technology.
The possibility of tracing energy through blockchain offers great advantages and solves technical and economic difficulties. From the perspective of an energy consumer of the network, it allows to know the origin of energy and even choose according to their type of origin, identify the production processes in which they interacted and even assign them a stock market value that could be traded in a spot market as an energy unit with potential value. Furthermore, if this energy were stored in a battery (reservoir, lithium and/or molten salts) it would be identifiable since the energy could be recognized as a temporary variable where the blockchain facilitates the “accounting” of the units of stored energy, recognizing of course the losses associated with the process.
In this context, in 2016 the company Phineal began to develop a methodology to add value to products and services beyond the generated solar energy, incorporating traceable information from the “genesis” or origin, which allows these to be given an attribute and identification. The aim is to strengthen the renewable energy market through the possibility of measuring, verifying and differentiating companies that use clean energies from those that depend on fossil sources (currently more than 50% of the Chilean energy matrix comes from fossil sources). This is how Sello Sol, the solar blockchain of Latin America is born.

The system is already in operation in small, medium and large generation solar plants, with commercial scaling through the licensing model for different types of customers. The traceability of solar energy is currently being implemented in projects developed by the French company Total Solar, in its photovoltaic plants of the Alianza Francesa (100kW) and PV Salvador (70MW) schools. Another company where solar energy traceability is being carried out is the Chilean national copper company, CODELCO, incorporating traceability systems in the solar plants that provide the company (photovoltaic and solar thermal) for the production of cathodes in the plant to obtain the Gabriela Mistral Division .

Measurement scheme of generation and consumption through the platform of Sello Sol.
Traceability of solar energy in the production of copper, which will then become conductors for the winding of electric car motors.

Traceability of renewable energies in national production processes will play a fundamental role in the registration systems of the circular economy of products and services worldwide. End users will be able to know the entire value-added chain through this type of sources by means of certificates that are automatically generated through measurement, avoiding the manipulation of people and certifying companies as is currently done. The blockchain eliminates the barriers and the final users can consult at any time in the platform of Sello Sol when, where and who produced the energy of the products and services that are buying or transferring.

Intelligent transactions without intermediaries

The energy is measured by means of equipment certified by national regulations and is extracted through devices installed locally in the generation and consumption plants, establishing a communication M2M (Machine to Machine) where there is no human intervention in the process. In the future, intelligent measurements should incorporate processing units and block mining, in response to the trend towards new and better measurement mechanisms as is being proposed in the “Internet of Things” (IoT) with blockchain.

phiNergy, measuring system with blockchain technology.
One of the great challenges raised during the development of the energy blockchain is the ability to add greater attributes to the information generated by generation plants and consumption centers. For this purpose, georeferenced information, time, equipment identification and, of course, the physical variable of the energy have been incorporated. Thus, the GTIME was defined, with which every 15 minutes an information vector is produced for each measurement in a solar plant.
From this information of all the measurements received by the GTIME creation systems the blocks are generated, which are mined to obtain the #hash that join the transactions from the past and the new blocks. A group of miners, who are connected to the Internet, are in charge of performing the calculations and rigorously keeping the historical information of all the blocks.
From these two units:l GTIME and #hash, it is possible to reconstruct the history of the transactions made by the system, allowing any user to verify the integrity of it until its “genesis” or origin.

The blockchain and the birth of prosumers

Before continuing, it is necessary to define what a prosumer (derived from the English word “prosumer”) is with a simple example. Suppose a person has a photovoltaic system in their home that allows them to generate most of the energy they consume annually, include within this equation an electric car and an energy storage system. This user can manage his energy with the electricity grid, either buy or sell his energy to users who are linked to it (the natural advance of the distribution law should tend to this logically). If a measurement, supervision and control mechanism is incorporated through blockchain, with which the energy can be managed directly from your home without having to go through intermediaries (distributors) and where it will also allow you to sell energy to your neighbors through the electrical networks, the user can be defined as prosumer.


Diagram of prosumer with measuring system with blockchain Phineal©2018
We are not far from these advances in energy management, nor are we the first to predict these issues, but the process of conversion towards this new concept involves “liquidating” the unidirectionality of the current generating > distributing > consumer scheme and understanding that this change is inevitable in the next 5 to 10 years. As a conclusion, it is clear to foresee that…
“…the energy revolution will come from the same users who will become prosumers, who will generate and store their own energy, which they will be able to sell to other users for direct use in electricity grids or electromobility, without intermediaries.”

Blockchain visualization and traceability platform Sello Sol

Sello Sol is a certificate that allows you to trace the generation of solar energy from the place of origin using blockchain technology. The data is measured and processed to add value to its use in products, services and transactions as verifiable, transparent and secure information.