Let’s say a customer installs a battery to help support an existing solar array. Let’s say the customer’s utility subsidizes that battery in exchange for the ability to tap it when the grid is strained. The utility might call on the battery to provide energy to the grid during peak demand or it may call on the homeowner to disconnect from the grid and use battery power under a type of demand response scenario. The utility might also tell the battery to charge when there is excess energy on the grid. Let’s change the scenario and swap the battery for an Electric Vehicle but let the utility use it the same way.
Smart inverters and bi-directional chargers could make these future scenarios possible. And the business case is there. Indeed, many believe that the value of a “fully unlocked” distributed energy resource (DER) is quite high, according to Jesse Morris, CEO of the Energy Web Foundation (Energy Web).
Morris explains that each regional grid is different and it would be impossible to pin down a fixed amount of money that a customer in the cases set forth above should be awarded for providing those grid services.
“It depends on the grid and depends on what challenges they’re facing,” he said in an interview, adding, “but from my perspective that’s the only reason that we [Energy Web] even exist is because these new markets create a very good business case for DERs.”
“We just want to help stitch all that together,” he said.
What about cybersecurity?
Probably one of the most interesting facets of the DER marketplace trials now being piloted in different parts of the world is that fact that, at least for the ones that EnergyWeb is involved in, they are built on blockchain.
“What we’re trying to do is provide open-source digital infrastructure to make any combination of different business models and technology selection work,” he said.
But adding all different types of technology to an electric grid is a terrifying prospect for the utility that owns those poles and wires and whose main focus is delivering energy reliably, safely and affordably. With the added risk of a cyberattack — currently on the rise around the world — the idea of putting more devices that talk to each other on the grid is even more scary.
But rest assured, said Morris, the architecture that these are built on, is highly secure.
“We have the technology now to facilitate all of the technology that needs to happen for a device to be trusted for that device to provide services,” he said.
It starts with a digital identity anchored on blockchain, explained Morris.
“What that means is in our ecosystem in Australia for example, every organization, every asset, every prosumer each get a digital identity, which is kind of like a passport containing metadata about you about your battery, about your solar system, whatever,” he said.
“Those identities are owned by each of the market participants. There’s not a single database that can be hacked.” Instead that metadata is spread out and shared by the different players in the system. In the pilot in Australia, that would be the utility AusNet, the aggregator Mondo, the grid operator AEMO and other technology providers.
“So there’s no single source of failure for the whole system to be attacked from the cybersecurity perspective, so it’s a really big cyber benefit,” he added.
Unlike a Facebook or a Google where all of the data about all of its users is held by one entity, by using blockchain and making the system shared, means that it is inherently more secure.
Those who have been in the electric utility industry for more than a few years may recall when blockchain was a huge buzzword and everyone seemed to believe it would transform the electricity industry. And it still very well could, but perhaps not in the way envisioned.
“We don’t use it to settle transactions. We don’t use it to send messages. There are other technologies [that are] way better at doing that,” said Morris. “We use it to establish trust amongst all these companies that have their own siloed systems about the identity of all these different things,” he explained.
“It is the answer to cybersecurity concerns,” said Morris, adding “It’s a net increase to cybersecurity instead of an additional risk threat.”
Not to put too fine a point on it, but Morris emphasized that this is all new for the energy space. “Digitalization for some utilities is learning how to use Microsoft Teams,” he joked.
A shared architecture “is something new for energy,” he said. “So there’s not Google or Facebook sitting in the middle sucking up all of the data.”
Referring to the pilot in Australia, Morris adds, “This isn’t an AusNet solution or a Mondo solution. It really is shared digital infrastructure that they all jointly run [and] the architecture we’re building is this shared piece of digital infrastructure that connects every single company’s siloed system in a way that they can trust each other because right now that doesn’t exist.”
What’s the price of setting up a DER market?
As a non-profit Morris likens his business model to that of Red Hat. The software itself is free. That’s the open source part. But companies need Energy Web and its technology partners to create a system unique to their needs.
“They basically just pay us consultancy fees for our engineers to help them deploy,” he said, adding, “there are no license obligations. There’s no fancy software-as-a-service model.”
“We want to build open source digital stuff to help accelerate the energy transition,” he said.