Distributed energy resources like solar panels & home batteries can make grids more reliable & resilient, but only if they can be tracked -- if everyone from the homeowner to the utility can see where they are & what they're doing. Energy Web wants to use the blockchain to track those resources. I chat with the CEO about how it would work.
If this is a valid business model at all, then it will be more efficient to form a non-profit association among the companies that produce DERs, and have everyone assign identifiers to their DERs out of a pool of such GUIDs. (Compare how ranges of MAC addresses are parceled out to manufacturers of network devices.) Each vendor could even maintain its own identity validation portal, and you could have multiple distributed copies of the overall ledger.
This impulse to put everything on a distributed blockchain, raising the energy and time cost for a transaction by 2-3 orders of magnitude, is just silly. It's a solution in search of a problem. The only reason to do it is if you are radically insistent that you can't trust any other participant in the system, you must personally control the hardware and keys for your account. Virtually nobody actually wants that, and boy howdy, if you can't trust the manufacturer of your car, you have much bigger problems than the question of how exactly it's going to time its charging activity.
I wonder if Jesse or other people working in this space consider how much of a desire there will be from customers to go entirely off-grid even inside metropolitan areas and shut off their distributed resources to the grid just because of the hassles of dealing with utilities?
Seems like this could be a big selling point for utilities to get their act together with maybe just a few well timed and robust court cases that challenged the utilities' ability to hold that monopoly. With solar, an EV and back up generator, it's never been easier or more affordable.
Even just the threat of it- the entire auto industry could sell their F150 Lightning's with this dream.
Blockchain solves a problem no has without making it any easier to solve problems they actually do have. The problem no one has - a missing technology for keeping track of things. The Medici sorted out double entry accounting 700 years ago and nothing here stresses that technological capability. You could run a large DER system on post-it notes and it could work on a 15 minute response. PUD spot markets aren't all high frequency trading affairs, PUDs being notorious for taking a lot of time to make decisions.
The problem people do have but get no help with - what to do when someone cheats the system. Again, the Medici were successful because they had sufficient power as an entity to sanction bad actors. Just look at the degeneracies that obtain without a trusted agent able to sanction bad actors, you can look towards Russia or the US political situation for examples where a blockchain assuring a common set of facts is irrelevant to the (non) functioning of the system. You can look at the resolution of the Enron scandal for how an authority does step in and rectify the situation when it gets exploitive.
Where is the trusted authority who can enforce the shared truth state? All DERs need to opt in or nothing works? It makes about as much sense as adding Blockchain to your Ice Tea business. If it is here to build investor enthusiasm, fine whatever, but in light of the last few months the perils of that path should be evident.
I'm being a little flip, but none of this pencils out like this. Folks exploiting the system aren't accidentally exploiting the system - especially in energy. Sure it has been more than 20 years since Enron, but you can look at supply withdrawal and rebidding in ERCOT or Australia and baseload nomination in every PUD in the US for contemporary examples of problems with fewer moving parts that this blockchain technology doesn't make more tractable. A few bad actors will dominate the whole system. Going to DERs with even smaller players with less credibility or reputation on the line doesn't make this an easier market to operate within. Blockchain is just a ledger, if there is no authority behind that ledger it doesn't matter. If there is authority behind the ledger... then any ledger works. That can be a fancy blockchain, or a text file behind a service account, both can facilitate high speed utilization (and the flat file is going to be faster in practice without all the window-dressing of a blockchain around it).
None of the communication off the hardware is immune to spoofing. The component will be interacting with the grid mediated through an industrial interface and at that point one can replace it's internal identifiers on the wire if one cares to. If there is enough money to be made, this will happen. Some VM systems are indistinguishable as the hardware OEMs recycle machine IDs on their servers. Do we expect these lower-tech systems in DERs to have better rigor and discipline around machine identifiers? There won't be a secure compute module in these pieces of hardware, and even then a secure compute module doesn't let you do real work as much as tag official utterances from the system as coming from the system. Publicly available (e.g. the response from a public endpoint) doesn't mean trustworthy. And if all that was reliable you wouldn't need to wrap it in a blockchain! Wrapping bad data in a blockchain doesn't make the data good, no matter how "easy" it becomes to transact. It is like we're wrapping CDOs around our bad mortgages again. Essentially, the data are suspicious but we give it a consistent name so other market players can work with it without understanding what risk lies beneath.
I understand that Jesse Morris wants to make everything interchangeable and set a standard for DER manipulation. This is necessary for DERs and in California, which has 1.4 million solar rooftop users, I think that it is easy to quantify this. The Ca Energy Commision told me that all of these P.V. users use 8,000MW of power, so the CEC could easily find the amount of GWh/yr roof top solar uses in CA. I did the calculation, and it is approximately half of the solar farm energy used in CA per year.
I feel that roof top solar DER in CA is important, but the state also needs the centralized solar farms to achieve total renewable energy use.
It might be nice if each DER had an identity profile so that its probable demands/contributions could be known to the next tier when reporting. Perhaps a home manager could be intelligent to manage this task. It could then take into account weather, time of day, and other variables that might change the demand/contribution scenario. I am imagining a NEXT thermostat scenario, where it "learns" use patterns, and can manage demands/contributions for that home.
Volts podcast: Jesse Morris on building an operating system for distributed energy
If this is a valid business model at all, then it will be more efficient to form a non-profit association among the companies that produce DERs, and have everyone assign identifiers to their DERs out of a pool of such GUIDs. (Compare how ranges of MAC addresses are parceled out to manufacturers of network devices.) Each vendor could even maintain its own identity validation portal, and you could have multiple distributed copies of the overall ledger.
This impulse to put everything on a distributed blockchain, raising the energy and time cost for a transaction by 2-3 orders of magnitude, is just silly. It's a solution in search of a problem. The only reason to do it is if you are radically insistent that you can't trust any other participant in the system, you must personally control the hardware and keys for your account. Virtually nobody actually wants that, and boy howdy, if you can't trust the manufacturer of your car, you have much bigger problems than the question of how exactly it's going to time its charging activity.
I wonder if Jesse or other people working in this space consider how much of a desire there will be from customers to go entirely off-grid even inside metropolitan areas and shut off their distributed resources to the grid just because of the hassles of dealing with utilities?
Seems like this could be a big selling point for utilities to get their act together with maybe just a few well timed and robust court cases that challenged the utilities' ability to hold that monopoly. With solar, an EV and back up generator, it's never been easier or more affordable.
Even just the threat of it- the entire auto industry could sell their F150 Lightning's with this dream.
Super not a fan of this.
Blockchain solves a problem no has without making it any easier to solve problems they actually do have. The problem no one has - a missing technology for keeping track of things. The Medici sorted out double entry accounting 700 years ago and nothing here stresses that technological capability. You could run a large DER system on post-it notes and it could work on a 15 minute response. PUD spot markets aren't all high frequency trading affairs, PUDs being notorious for taking a lot of time to make decisions.
The problem people do have but get no help with - what to do when someone cheats the system. Again, the Medici were successful because they had sufficient power as an entity to sanction bad actors. Just look at the degeneracies that obtain without a trusted agent able to sanction bad actors, you can look towards Russia or the US political situation for examples where a blockchain assuring a common set of facts is irrelevant to the (non) functioning of the system. You can look at the resolution of the Enron scandal for how an authority does step in and rectify the situation when it gets exploitive.
Where is the trusted authority who can enforce the shared truth state? All DERs need to opt in or nothing works? It makes about as much sense as adding Blockchain to your Ice Tea business. If it is here to build investor enthusiasm, fine whatever, but in light of the last few months the perils of that path should be evident.
I'm being a little flip, but none of this pencils out like this. Folks exploiting the system aren't accidentally exploiting the system - especially in energy. Sure it has been more than 20 years since Enron, but you can look at supply withdrawal and rebidding in ERCOT or Australia and baseload nomination in every PUD in the US for contemporary examples of problems with fewer moving parts that this blockchain technology doesn't make more tractable. A few bad actors will dominate the whole system. Going to DERs with even smaller players with less credibility or reputation on the line doesn't make this an easier market to operate within. Blockchain is just a ledger, if there is no authority behind that ledger it doesn't matter. If there is authority behind the ledger... then any ledger works. That can be a fancy blockchain, or a text file behind a service account, both can facilitate high speed utilization (and the flat file is going to be faster in practice without all the window-dressing of a blockchain around it).
None of the communication off the hardware is immune to spoofing. The component will be interacting with the grid mediated through an industrial interface and at that point one can replace it's internal identifiers on the wire if one cares to. If there is enough money to be made, this will happen. Some VM systems are indistinguishable as the hardware OEMs recycle machine IDs on their servers. Do we expect these lower-tech systems in DERs to have better rigor and discipline around machine identifiers? There won't be a secure compute module in these pieces of hardware, and even then a secure compute module doesn't let you do real work as much as tag official utterances from the system as coming from the system. Publicly available (e.g. the response from a public endpoint) doesn't mean trustworthy. And if all that was reliable you wouldn't need to wrap it in a blockchain! Wrapping bad data in a blockchain doesn't make the data good, no matter how "easy" it becomes to transact. It is like we're wrapping CDOs around our bad mortgages again. Essentially, the data are suspicious but we give it a consistent name so other market players can work with it without understanding what risk lies beneath.
I understand that Jesse Morris wants to make everything interchangeable and set a standard for DER manipulation. This is necessary for DERs and in California, which has 1.4 million solar rooftop users, I think that it is easy to quantify this. The Ca Energy Commision told me that all of these P.V. users use 8,000MW of power, so the CEC could easily find the amount of GWh/yr roof top solar uses in CA. I did the calculation, and it is approximately half of the solar farm energy used in CA per year.
I feel that roof top solar DER in CA is important, but the state also needs the centralized solar farms to achieve total renewable energy use.
It might be nice if each DER had an identity profile so that its probable demands/contributions could be known to the next tier when reporting. Perhaps a home manager could be intelligent to manage this task. It could then take into account weather, time of day, and other variables that might change the demand/contribution scenario. I am imagining a NEXT thermostat scenario, where it "learns" use patterns, and can manage demands/contributions for that home.