Blockchain entrepreneurs are helping utilities re-invent the powergrid

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WHY THIS MATTERS IN BRIEF

  • The power grids used by most countries were born in a different era, but now, thanks to new technologies like blockchain, grid scale storage and renewables, they’re about to get upgraded


 

Imagine the scene, a power pole collapses at 8PM on a hot night in the remote outback of Australia. This is a real problem affecting real people day in day out in remote areas of the world. People like William and Olivia Munroe, who raise sheep and cattle 100 miles outside an old gold mining town on the edge of the Great Victoria Desert where the temperature frequently soars close to 120 degrees Fahrenheit.

 

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Their children attend school via satellite link, which also acts as the family’s only means of accessing health services in the event of illness or emergency, and even though the family have a backup generator, it can’t power the water pumps, communications, and air-conditioning for long – in short, their lives depend entirely on having access to reliable energy.

Nine hours after the power pole fell over the power utility sends out a team to find and fix it, and in this case it’s customer complaints that gave the company an idea of where the break occurred, but that said though the team still takes more than a day to identify, reach, and fix the pole, and the generator’s running out of fuel. Meanwhile, the family and their nearby neighbours, businesses, and institutions are also without power. It’s inconvenient, economically expensive, and dangerous.

In the Outback and to minimise these hazards the local utility companies, at great expense, employ big teams of inspectors to regularly check the network, but imagine how much safer, easier, and cheaper it would be if each power pole was a “Smart thing.”

 

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They could all report their own status and trigger actions for replacement or repair. If a pole caught fire or began to tip or fall, it would generate an incident report in real time and notify a repair crew to come with the appropriate equipment to the precise location. Meanwhile, the pole could potentially reassign its responsibilities to the nearest working pole – after all, they’re all on the grid. The utility could restore power to the community more quickly without the huge ongoing costs of field inspection.

Using some of today’s emerging technologies, such as Blockchain, it’s now easier than ever before to create networks of smart things. Imagine, for example, creating a new flexible and secure network quickly and relatively inexpensively that opens up new opportunities to create new services and improve supply.

Using a combination of Blockchain and Mesh Networks, networks that can connect computers and devices directly to one another, companies can now inexpensively create networks of smart things that can automatically reconfigure themselves according to the availability of particular resources, such as bandwidth and storage, to name but two in order to keep services flowing. As an added benefit communities can use these same networks for basic connectivity where they lack access or affordable service, such as in the UK in the countryside outside of London where I live where even a GPRS or Edge signal is a great win.

 

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Mesh networks are also increasingly being used as an alternative to  traditional “Top Down” models of organisation, regulation, and control, and they can provide greater privacy and security because traffic doesn’t route through a central organization.

Around the world companies are already seizing the opportunity with both hands and running with it, combining Blockchain with Mesh Networks to solve complex infrastructure problems, and one of those is Filament, a US company, who is experimenting with what it calls “Taps” on power poles in the Australian outback.

Taps are devices that can talk directly with one another at distances of up to 10 miles, and in the Outback, because the power poles are around 200 feet apart, a motion sensor on a pole that’s falling will notify the next pole 200 feet away that it’s in trouble, and if for any reason the tap on that pole isn’t available, it’ll communicate with the next one and so on and so on until it finds one that it can use to communicate its status back to the utility company. Similarly customers can connect to the taps directly with their own phones, tablets and devices, providing them with a way to access connectivity and disintermediate their telecoms carriers, that is, depending on where they are, if they even have one…

 

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In Filaments case their business model is fairly simple, and the utility company pays them a monthly service to monitor the network rather than having to keep deploying their teams of people, and because power poles rarely fall, the power company rarely uses the actual communication capability of the network keeping it free for the locals to use instead.

“Since Filament owns the devices, we can sell extra network capacity on top of this network that spans most of the continent,” said Eric Jennings, Filament’s cofounder and CEO, “for example, we could strike a deal with FedEx and FedEx drivers could use the network for communications and vehicle tracking to indicate estimated arrival times and breakdowns.”

With tens of thousands of smart poles continuously collecting data via numerous sensors and communicating it to other devices the system can keep continuous track of everything that goes on in, and around, the network, but in order to do that each device needs its own identity and that’s where Blockchain and it’s Distributed Ledger capabilities come in.

 

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“Nothing works without identity,” said Jennings, “the blockchain for identity is the core for the Internet of Things. We create a unique path for each device. That path, that identity, is then stored in the Bitcoin blockchain assigned to Filament, and just like a Bitcoin, it can be sent to any address.”

The blockchain also ensures that the devices are paid for so they continue to work.  Now, instead of poles, imagine digitizing every node in a power system to create entire new peer-to-peer models of power production and distribution.

Most homeowners, businesses, governments, and other organizations in urban North America get their power from regulated utilities at regulated prices. The local utility captures excess power in its supply for redistribution at wholesale rates, often with considerable leakage. The consumer, who may be located across the street from a local power source, still must go through the utility and pay full retail for renewable energy generated by their neighbour.

 

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“Instead of the command and control system the utilities have now where a handful of people are actually running a utility grid, you can design the grid so that it runs itself,” says Lawrence Orsini, cofounder and principal of .

“The network becomes far more resilient because all of the assets in the grid are helping to maintain and run the utility grid,” he adds, “it’s a distributed peer-to-peer Internet of Things network model with smart contracts and other controls designed into the assets themselves. When a hurricane, for example, destroys transmission towers or fire cripples a transformer substation, the grid can quickly and automatically reroute power to prevent a massive blackout, and locally generated power, used locally, is significantly more efficient than the utility-scale model, which relies on transmitting energy across vast distances, where energy is lost.”

 

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In LO3 Energy’s case they are working with local utilities, community leaders, and technology partners to create a market where neighbours can buy and sell each other’s energy, and they aren’t the only ones.

GE and Nasdaq recently cosied up with each other in New York to create what’s considered to be one of the world’s first examples of a Blockchain based decentralised energy platform that lets cities and countries move away from building and investing in expensive energy infrastructure and centralised power stations, instead embracing a new world of “Virtual Power Plants” (VPP) that aggregate all the energy produced by local solar and wind powered micro-grids, the first of which was just bought by Los Angeles. Representing what many think is a turning point for the industry this was the first time a VPP beat a traditional power station in a tender situation.

The energy business is changing, and it’s getting smart(er).

About author

Matthew Griffin

Matthew Griffin, Futurist and Founder of the 311 Institute is described as “The Adviser behind the Advisers.” Among other things Matthew keeps busy helping the world’s largest smartphone manufacturers ideate the next five generations of smartphones, and what comes beyond, the world’s largest chip makers envision the next twenty years of intelligent machines, and is helping Europe’s largest energy companies re-invent energy generation, transmission and retail.

Recognised in 2013, 2015 and 2016 as one of Europe’s foremost futurists, innovation and strategy experts Matthew is an award winning author, entrepreneur and international speaker who has been featured on the BBC, Discovery and other outlets. Working hand in hand with accelerators, investors, governments, multi-nationals and regulators around the world Matthew helps them envision the future and helps them transform their industries, products and go to market strategies, and shows them how the combination of new, democratised, powerful emerging technologies are helping accelerate cultural, industrial and societal change.

Matthew’s clients include Accenture, Bain & Co, Bank of America, Blackrock, Booz Allen Hamilton, Boston Consulting Group, Dell EMC, Dentons, Deutsche Bank, Deloitte, Deutsche Bank, Du Pont, E&Y, Fidelity, Goldman Sachs, HPE, Huawei, JP Morgan Chase, KPMG, Lloyds Banking Group, McKinsey & Co, PWC, Qualcomm, Rolls Royce, SAP, Samsung, Schroeder’s, Sequoia Capital, Sopra Steria, UBS, the UK’s HM Treasury, the USAF and many others.

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