There is a lot of buzz around blockchain technology and its potential to revolutionize a wide range of industries from finance and health care to real estate and supply chain management. Reports estimate that over $1.4 billion was invested in blockchain startups in 2016 alone, and many institutions and companies are forming partnerships to explore how blockchain ledgers and smart contracts can be deployed to manage and share data, create transactional efficiencies, and reduce costs.
While virtual currencies and blockchain technology in the financial services industry have been the subject of significant debate and discussion, blockchain applications that could transform the energy industry have received comparatively less attention. Every other week, K&L Gates Blockchain Energizer will highlight emerging issues or stories relating to the use of blockchain technology in the energy space. To subscribe to the Blockchain Energizer newsletter, please click here.
Trusted IoT Alliance Launches to Foster Interoperability Across Blockchain Platforms
- A wide range of companies have joined together to launch the Trusted IoT Alliance (the “Alliance”) to develop and set standards for representing “Internet of Things” (IoT) products on blockchain platforms. The stated goal of the Alliance is “the creation of a trusted IoT ecosystem that links cryptographic and registrant identities, along with meta data, to give objects the equivalent of digital, transferable ‘birth certificates’ that can be inventoried and managed across blockchain networks.”
- The Alliance will be blockchain agnostic and will work to foster interoperability across blockchain platforms. The Alliance anticipates that developing standards for assigning digital identities to Internet-connected machines or products will remove barriers to broadscale adoption of blockchain technology and enable automation through smart contracts.
- In conjunction with the formal launch of the Alliance, a Supply Chain Working Group was also established with the specific purpose of establishing standards and security protocols for IoT devices in the supply chain context. The Alliance anticipates developing other working groups as well.
- As noted in earlier issues of this newsletter, successful implementation of interoperability standards will be key to realizing the potential of blockchain technology. For example, trusted and reliable standards for creating digital identities for energy meters will help facilitate the development of blockchain-based platforms for trading energy and renewable energy credits.
New York Energy Service Company Using Blockchain Technology to Lower Customer Bills
- New York State allows consumers to choose whether the local utility or a third-party supplier, known as an Energy Services Company (ESCO), provides their energy supply. Drift is a Seattle-based company licensed as an ESCO and serves residential and nonresidential customers in New York City.
- Drift is distinguishing itself from other ESCOs by employing blockchain technology to match a network of small-scale, distributed producers with customer demand. The goal is to use more localized, distributed energy resources to cover shortages and lower costs for customers. Drift’s technology also allows customers to track the type of generation resource supplying their energy needs and bills customers on a weekly basis.
- Drift represents another model for using blockchain technology to advance integration of distributed energy resources and involve prosumers in energy markets.
HyperLedger Composer Demo Explores Creation of Decentralized Energy Networks
- For readers interested in the technical aspects of establishing a blockchain network, a demo using HyperLedger Composer explores how to create a decentralized energy network. HyperLedger Composer is a tool for developers to model, develop, and test blockchain business networks.