Spainâs Iberdrola recently announced it had completed a blockchain project that guarantees that 100 percent of the electricity delivered to a consumer, Kutxabank, comes from renewable energy resources. In a first proof-of-concept test, Kutxabank was able to track the energy from various points of origin â Iberdrola wind farms and a hydroelectric power plant â to their points of consumption â Kutxabankâs headquarters in Spainâs Basque Country and Cajasur in Cordoba, according to Iberdrola.
The successful test marks a significant achievement in applying blockchain-based, peer-to-peer (P2P) distributed ledger information and communications technology (ICT) to accelerate energy âdecarbonization,â decentralization and digitization, according to project partners.
This innovation shows us that it is a crucial catalyst in the process of âdecarbonizingâ the economy, allowing traceable, secure and rapid transactions. In this case, the supply of green energy is more efficient, flexible and transparent, which âincentivizesâ the production and consumption of 100% renewable energy.
Iberdrola, the Energy Web FoundationÂ (EWF) and EWF affiliate FlexiDAOÂ collaborated in the development of FlexiDAOâs Spring, the distributed, renewable energy blockchain used in the Iberdrola-Kutxabank proof-of-concept. âFlexiDAOâs Spring software helps energy retailers sell a new energy service in addition to their current energy supply: selection and time-based certification of local green energy,â FlexiDAO co-founder and CEO Simone Accornero told Solar Magazine.
âFor the first time, consumers can benefit from a certification mechanism that truly demonstrates renewable energy âadditionality,â and therefore they are empowered to impact generation of green energy with their consumption by selecting the type of source they desire â solar, wind, hydro, etc. â and the geographic distance. A Web app allows them to track every hour or day that this selected renewable generation matches 100 percent of their consumption. In addition, corporate consumers can use the Web app as a powerful Corporate Social Responsibility (CSR) communication and reporting tool for their sustainability metrics through which they can build transparent, trusted brand equity,â Accornero explained in an interview.
FlexiDAOâs EWF-based Spring renewable energy blockchain
The renewable energy FlexiDAOâs blockchain software system tracks and accounts for is generated by Iberdrola wind farms in the Oiz area of Spainâs Biscay province and in MaranchÃ³n, Guadalajara province in the Castile-La Mancha region. Adding to that is electricity from the San Esteban hydroelectricity plant from Orense province in the Galicia region. Solar Magazine spoke with EWF and FlexiDAO to learn more.
Barcelona-based FlexiDAO used EWFâs Origin as a framework to develop Spring. EWF saw to project negotiations and coordination, while the API and data collection was carried out by Iberdrola with the support of EWF. FlexiDAO subsequently integrated the API with its Spring software and deployed the application, Accornero added.
The data streams flowing across the FlexiDAO systemâs EW Blockchain can be grouped into five categories, Accornero explained.
- Private meta-data: âSaltedâ hash of the assetsâ and consumersâ data stored in a Retailersâ database. The hashes are used as secure on-chain data proof for off-chain data validation.
- Contractual data: âSaltedâ hash and link between anonymous identities (users, assets, organizations, operators, energy meters, etc.) that defines and automates the contractual relationships among all the parties.
- Meter data: Time-stamped accumulated active energy (both consumed and produced), assigned to anonymous identity.
- Certificate transaction data: Certificates trading data between anonymous identities (including type of certificate, like certificate of origin from on-shore wind farms).
- Certificate claim data: Certificate claim data describes which anonymous identity and for which period of time the certificate has been utilized/consumed.
FlexiDAOâs Spring forms the application layer of the system, integrating all the data from these disparate sources with the EW Blockchain. âThe interaction with the retailerâs IT system is extremely easy since all the logic happens behind simple APIs (application programming interfaces),â Accornero added.
The first API is embedded in Springâs metering module, which connects to the energy retailerâs SCADA (Supervisory Control and Data Acquisition) system in order to keep track of generation data. Consumption data is gathered through the systemâs DSO (Distribution System Operator) or directly from consumersâ smart meters, Accornero explained.
The software then uses smart contracts to define a set of rules for the automatic matching of generation and consumption based on a set of consumer preferences, such as location, type of energy and frequency. The smart contracts automate all the back-end processes associated with management of the renewable energy certificates, which include on-boarding of assets, certificate issuance, trades and claims.
A second API is part and parcel of an application module that manages all administration tasks, such as registration of new users and assets, the creation of digital identities and storage of the retailerâs private keys.
Front-end data visualization and interaction is taken care of via a white-label Web app that enables any consumer or generator to interact with, track and select the origin of their renewable energy, Accornero continued. âThe user experience for both the retailer and the consumer is made extremely easy and user-friendly by a set of cloud-based services offered by FlexiDAO,â he said.
Addressing issues of blockchain scalability, transaction and energy efficiency
Accornero laid out Springâs key aspects and functions as follows:
- Gas Relay: Allows secure operation and interaction with the blockchain without the need to worry about transaction fees and cryptocurrencies;
- Digital identity management and account recovery system: Manages users and assets via smart contracts and based on digital identities. âThis is a sophisticated mechanism to solve two key issues,â Accornero highlighted:
- It simultaneously ensures transparency, traceability and GDPR compliance; and
- Provides identity recovery in case the user loses the private key;
- Provides a safe decentralized environment for usersâ private key local storage and management, which is always stored on usersâ premises; and
- provides blockchain âconnectivityâ without running a local blockchain node, or instance.
The scalability, transaction processing and energy efficiency of blockchain distributed ledger systems, and hence their feasibility, has been called into doubt. The EW Chain upon which the Iberdrola-Kutxabank distributed ledger system is based is still in development. Tests conducted on EWFâs test network show that it can support 100-plus transactions per secondÂ at present, EWFâs Mario Pavlovic told Solar Magazine.
âWe achieve this through a number of approaches,â Pavlovic explained. âFor example, rather than the Proof-of-Work consensus used by blockchains such as Bitcoin, the EW Chain uses a Proof-of-Authority approach that speeds block time. Through developing technologies such as Polkadot, we also foresee near-infinite scalability through parallel chains that overcome the transaction throughput limitations of individual blockchains.â
Furthermore, Accornero pointed out that Spring is fully compatible with current certification mechanisms, such as GoO, which provide an additional layer of transparency, while at the same time automating the processing certificates registration and retirement for regulatory certification. That can reduce costs as much as 3 FTEs for both the retailer and the consumer, he highlighted.
New opportunities for distributed, renewable energy producers and consumers
For Kutxabank, the renewable, distributed energy blockchain offers the banking and financial services group another means of realizing its clean energy and broader-based sustainability goals.
Kutxabank numbers among the growing ranks of corporations aiming to âdecarbonizeâ the energy it uses in an effort to contribute to the global drive to stem the tide of rising atmospheric greenhouse gases (GHGs), global warming and broader-based degradation of natural resources and ecosystems.
The distributed, renewable energy blockchain project presents the banking and financial services group with âa new opportunity to keep advancing in the sustainability criteria which guides our activity, as we have spent years developing multiple actions, both directly and indirectly, to minimize our environmental footprint,â management stated.
New technologies are proving to be a powerful ally when it comes to improving knowledge about the source of the energy we consume as we aspire to become completely renewable in the near future.
Moving forward, Iberdrola aims to leverage and capitalize on Springâs successful proof-of-concept test and other blockchain-distributed energy initiatives. âGuaranteeing the renewable origin of energy is critical for long-term PPAs (power purchase agreements) associated with the growth of the corporate green energy market,â management stated. In July, Iberdrola and Kutxabank entered into a long-term PPA for the supply of electricity from additional renewable energy assets. In this instance, the energy will be generated at what Iberdrola says is the largest solar power project in Europe, the NÃºÃ±ez de Balboa solar plant itâs building in Spainâs Extremadura region. comment