Secure data share is vital to fast-track renewables says Energy Web boss

In an Enlit exclusive, Jesse Morris, CEO of Energy Web Foundation, notes the importance of having correctly structured energy markets to support industry growth and sustainability.

What are the top three challenges in delivering the energy transition?

From our perspective, the main barrier to the acceleration of the energy transition is related to how energy markets are currently structured.

The regulatory requirement, in most countries worldwide, requires that small-scale flexibility assets such as residential batteries, electric vehicles, heat pumps, and others, participate in energy markets only via their representation by an aggregator.

Considering a more direct market design where flexible assets, irrespective of their capacity, can directly bid into an energy market will minimize their marginal costs and will promote and foster the participation of small-scale distributed energy resources in energy markets. This need for the direct involvement of assets in markets was identified and considered to be an overarching principle in the joint report 'Roadmap on the Evolution of the Regulatory Framework for Distributed Flexibility' by Entso-E and the European Associations representing distribution system operators published in June 2021.

Moreover, secure data sharing between the various market participants and automated governance of the flexibility markets are two additional challenges to delivering the energy transition. Especially with regards to automated governance, complex integration problems like those presented by TSO and DSO coordination are often solved with hub-and-spoke architectures because they are more cost-effective, scalable, and efficient than other alternatives.

While this architecture offers clear system benefits, it has yet to gain adoption in electricity markets because of the difficulty in assigning operational and financial responsibilities to a single entity in a setting where multiple regulatory jurisdictions are involved.

In your own words, what single action will accelerate the deployment of renewable generation?

At Energy Web, we believe that an information-sharing layer where a variety of system condition data from hardware and software deployed on the grid can be easily and securely exchanged among transmission operators, distribution utilities, and a wide array of third-party stakeholders including but not limited to independent power producers, project developers, OEMs, aggregators, individual prosumers, analytics providers, and more is required.

Energy Web’s Decentralized Operating System (EW-DOS) delivered exactly this functionality by leveraging digital identities. Digital identities implemented via the notion of decentralized identifiers, also known as DIDs, allow assets, systems, and energy market participants to hold their self-sovereign identities.

The biggest challenge here is how you assign digital identities to energy assets, such as smart meters, and smart inverters in a way that is both secure and at the same time cost-efficient.

This is where the collaboration between Kigen, KORE Wireless, and Energy Web focuses on solving the challenge of assigning digital identities to assets. Taking into account the fact that starting for example from smart meters, an increasing number of energy assets rely on the GSM network for their communication with the backend systems, finding a way to include a DID in the SIM card itself in a straightforward, open, and cost-efficient manner is indeed a leap towards decentralized energy market and increased cybersecurity.

What excites you most about the European energy transition?

We think that the most exciting thing about the European energy transition is the democratization of electricity markets by allowing the direct participation of small-scale distributed energy sources (DERs).

It is exactly this radical change where at Energy Web we see an opportunity to disrupt the electricity sector by deploying a public digital infrastructure that breaks down information technology and data silos currently inhibiting coordination amongst energy market participants across the transmission and distribution interface.

Our strategy is to develop the EW-DOS  as a fully open-source software solution that can be easily customized and deployed within individual grid regions across Europe. EW-DOS can be brought to market by applying the same principles and cost-recovery mechanisms that have governed the physical grid for a century; transmission operators and distribution utilities simply extend their existing roles by building and maintaining digital infrastructure as a public good, providing open-access to qualified third parties.

How are industry experts from Energy Web Foundation going to address these challenges at Enlit Europe in Frankfurt?

Enlit Europe is without a doubt the most important European event in the energy sector with a global impact. Our industry experts will demonstrate at Enlit Europe the angle from which the energy transition should be approached. At Energy Web we are focused on bringing to market three specific solutions in partnership with energy companies around the world.

These solutions represent areas where decentralized technology — in Energy Web’s case a mix of public blockchains, decentralized identifiers, Energy Web Tokens, and decentralized software architectures — can create significant business value for enterprises.

We believe that the decentralized multi-tenant environments required for these solutions are only possible with public blockchain technologies, and we see more and more enterprises ready to embrace them.

The three solutions are:

• Our enterprise asset management solution, which is built on the W3C-administered decentralized identifier standard. Examples of existing real-world implementations include Stedin’s identity and access management solution, California ISO flex alert, and our work with Vodafone, as well as our work with Kigen, and KORE Wireless that we are currently discussing.
• Enterprise data exchange enables different combinations of energy companies, prosumers, and individual devices (e.g., electric vehicles, and residential batteries) to exchange and process granular data in a secure, trustworthy, and decentralized way.
• Green proofs platform, which is our solution focusing on enabling next-generation traceability for low, zero, or negative carbon supply chains. Our primary work in this area is focused on renewably mined cryptocurrency, 24/7 renewable energy matching, and sustainable aviation fuel.