Building a sustainable planet by tokenising energy
- In recent years, the need for clean energy has become the number one priority of nations and corporations alike.
- High-profile names such as Larry Fink, CEO of BlackRock, and Bill Gates have taken a personal stance to tackle this issue.
- The Energy Web Chain is emerging as a promising technology to move toward a sustainable world using blockchain technology.
Energy is the most fundamental aspect of modern existence. The industrial age helped power up the whole world and the 21st century is the time to move away from fossil fuels, towards sustainability. As more countries recognise the urgency to be more sustainable, an increasing number of countries and corporations have pledged to go carbon-neutral by 2050.
Energy Web Chain and Energy Web Token
Energy Web was founded in 2017 with a vision to bring together all the different components of the evolving energy markets and grids to support clean energy. It was co-founded by the Rocky Mountain Institute (RMI) and Grid Singularity (GSy) along with 10 affiliates. By 2019, the foundation had expanded to 100 affiliates, including big names in the energy sector and blockchain development, like Shell, GE, Hitachi, nakamo.to, Siemens and Total. The Energy Web Chain was launched in June 2019 as “the world's first public, open-source, enterprise-grade blockchain tailored to the energy sector” as per Energy Web. In December 2019, the Energy Web Decentralized Operating System was launched (EW-DOS), which is “an open-source stack of decentralized software and standards—including the Energy Web Chain and various software development toolkits (SDKs).”
The Energy Web Chain is an open-source blockchain, derived from the Ethereum stack, aimed at the integration of different components of the new clean energy grid. It uses Proof-of-Authority (PoA) authentication and consensus method for its security, which affords an improvement in the number of transactions per second and lowers energy consumption. It is publicly accessible, with inbuilt privacy preservation and permissioning features, which allows developers to build DApps (Decentralised Apps) on the Energy Web Chain. This makes integration with hardware and IoT devices possible.
The Energy Web Token (EWT) is the native first-layer utility token and cryptocurrency based on the Energy Web Chain. There are only going to be 100 million EWTs over the next 10 years, of which 48,638,535 are currently in circulation.
The EWT helps build a more integrated, traceable, decentralised and decarbonised system that brings together all the moving parts in the renewable energy markets, including distributed energy resources (DER), grids, customers and assets. It is the digital infrastructure that backs the physical infrastructure. It helps track the actual carbon footprint of an establishment and enables development of DApps, which incentivise the growth of the renewable energy market. With some of the biggest players in the energy markets backing the Energy Web Chain, and millions of users worldwide, it is a diverse, yet stable, technology, aimed at transforming the future of energy.
The EWT is used to compensate network operators and those who hold EWT can pay for DApps services built on the platform. It currently trades on Kraken, Kucoin, BitMart, Liquid and Hotbit exchanges.
How Energy Web Token Incentivises the Shift to Clean Energy
The EWT and EW-DOS are built to incentivise the growth, advancement and acceleration of the renewable, clean-energy market. It achieves this by the suite of applications, features and technological innovations built into the Energy Web Chain and the core EW-DOS.
Making It Possible for DERs to Participate in the Renewable Energy Grid
Distributed Energy Resources, or DERs, are the innumerable energy devices that abound in our world, but are not traditionally thought of as part of the grid. This includes battery-powered devices, solar panels, electric vehicles and thermostats. Many of these may be IoT devices as well, thus providing valuable data, insights and certifications. Making these devices part of the electricity grid and enabling them to participate in providing grid services, will go a long way in monitoring, expanding and democratising the energy grid. By becoming a part of the Energy Web Chain, they also become eligible to get compensation for providing grid services. One of the recent adoptions of this technology is the Australian Power Grid, which uses Energy Web Flex as a toolkit to utilise the value of DERs, while maintaining low administrative costs.
Powering the Circular Green Economy by Device Lifecycle Tracking
Every component of the renewable energy infrastructure has its own carbon footprint and costs. To achieve a clear picture of the carbon footprint of any establishment, it is important to track the carbon footprint of these assets throughout their lifecycle. This is an important step, which allows the operators to upgrade, maintain and replace assets. The concept of Circular Economy is based on this principle. The European Green Deal lays great emphasis on the lifecycle tracking of all components in the green economy,
This tracking becomes achievable through the EW-DOS technology stack. One of the examples of this type of tracking is the app EasyBat, which leverages the Energy Web tech stack. EasyBat is an open-sourced solution for decentralised lifecycle battery asset management. The entire logistic flow of every transaction of these batteries now sits on a decentralised ledger. This innovation has led to a Battery Digital Passport, which enables the implementation of the EU Circular Economy Plan.
Digitization of Renewable Energy Markets
One of the key aspects of the renewable energy markets is the existence of portals where buyers and sellers can obtain solutions for their renewable energy requirements. Additionally, buyers require a way of verifying the certifications and specifications of any devices or solutions they buy. The EW-DOS has created SDKs that solve this problem. EW Origin, built on the EW-DOS, catalyses demand among buyers, from small and medium scale enterprises to corporations, for electric vehicles and low-carbon fuel sourcing, among other things. Different digital solutions can be further built on EW Origin to provide custom solutions to buyers and sellers. EW Zero, one such solution, helps buyers find digitally source-verified renewable energy globally. It allows for the transfer of energy attribute certificates (EACs), digitally, and allows the tracking of the resulting environmental impact, thus reducing the administrative and transaction costs of the process.
EW Zero has also entered into a partnership with the XRP Ledger Foundation and the Ripple blockchain, enabling Ripple to be completely decarbonised and entirely sourced through renewable energy. Considering the backlash received by cryptocurrencies for their energy consumption, this is a big step forward.
Enabling the Crypto Climate Accord
The Crypto Climate Accord is a private-sector initiative to decarbonise the crypto and blockchain industry. In July, the CCA surpassed 150 supporters. This project focuses on benchmarking and setting good industry practices to decarbonise the blockchain, developing solution toolboxes and sharing credible proof of progress. In other words, the blockchain will be used to solve the energy-related problems of the blockchain sector, thus making it as low carbon as possible, with individual commitments of signatories to decarbonise by 2030.
To this end, Energy Web Zero will launch a commercial product in Q1 of 2022, giving all crypto hodlers, developers, miners and exchanges, a platform to buy verified renewable energy digitally with the records on the blockchain ledger. This is a giant step towards fixing an oft-repeated problem for the cryptocurrency sector, which is usually based on Proof of Work (PoW) and thus requires huge amounts of electricity.
Democratising and Upgrading the Energy Markets
For the last century, the power grids and technology sector have remained isolated from each other. Very little technology has been deployed to address the challenges of the power sector and the Energy Web Chain disrupts this model of working. Since renewable energy sources remain largely distributed, the future decades hold an enormous challenge, as well as potential, to knit together the millions of renewables with the power grids, and connect them to customers. With blockchain intervention, this becomes not only achievable, but traceable too.
An important part of switching to renewable energy is the assessment and tracking of the carbon footprint of every component of the supply and distribution circuits, so as to periodically evaluate how far any organization, establishment or country is from their declared renewable energy goals. This is possible through DApps developed on the EW-DOS. With a digital ledger of every transaction, information from every device and the interoperability of different components, it becomes easier to solve the requirement of moving towards renewable energy piecemeal. As more and more participants adopt the model, the goal of entire corporations turning zero-carbon becomes possible.
Compliance with Regulations
With new regulations in place in every country, and with regulations changing every year, there is no other foolproof way to track progress and compliance with the regulations. The paperwork required to meet the requirements and the administrative costs associated with verifying energy attribute certificates (EACs) are considerably high, prone to error and corruption. The process is also time-consuming and geographically limited. Whereas the blockchain provides easy transferability of EACs, easy assessment of regulatory compliance and tracking of progress towards declared goals, with minimal costs. Not only that, the participants on the chain are compensated in Energy Web tokens and thus incentivised to further invest in the growth of renewable-energy markets.
Nothing in this article constitutes professional and/or financial advice. The content is provided exclusively for informational and/or educational purposes. Nothing is to be construed as an offer or a recommendation to buy or sell any type of asset. Seek independent professional advice in regards to financial, tax, legal and other matters.