Spinning The Grid Into A Decentralized and Open Web
Allow me to introduce you to the Energy Web, one of the best use cases for blockchain technology I have come across.
I like to envision a future that is totally rad, think of what technology it would have, and then pay attention to projects that are working to make that future a reality.
The Energy Web is one of those projects. Today I will show you how the current system is suboptimal, and how the Energy Web will usher in a brighter future. First, let’s learn about the energy grid.
The Energy Grid
The energy grid consists of producers, who create energy from various sources, consumers, who use the energy for various activities, and the various middlemen that operate the network.
The way the energy production system works is that generators adjust their output to meet variable demand. However, depending on the type of generator, there is a delay before it can increase its output. Things like coal plants and nuclear power have a long delay, while most renewables are able to adapt very quickly. This can be a good thing, but if a large portion of the production is wind, and the wind suddenly stops blowing, there will be a blackout while we wait for the slower generators to increase their output.
Obviously this presents a major problem if we try to shift the entirety of energy production to renewables. Heavy clouds show up, and the wind stops blowing, and the next thing you know, you’re pooping by candlelight.
Decentralized Energy Resources (DERs) such as large residential batteries, rooftop solar, smart meters, electric vehicles (EVs), etc. help to solve this problem. By bringing on a massive amount of energy storage (mainly through EVs and residential batteries) and energy production (residential solar/rural wind farming), and decentralizing it, the grid is much more ready to withstand hiccups from clouds and lack of wind.
There’s a thunderstorm over Houston and their entire energy production from solar has stopped? It’s okay, there are a few hours worth of energy stored in batteries across the city to keep everything running at full capacity. Plus, over in San Antonio, it’s a piping hot sunny day, and they are pumping the grid full of energy — more than they need. The excess is routed to Houston, keeping your bathroom light on.
Problems With The Current Grid
The current energy grid is simply not set up for the future.
It will not be long until DERs are commonplace. Rooftop solar is becoming more and more common as the cost decreases. EVs are beginning to really ramp up production and will have bigger batteries. Large residential batteries will become income producers that also provide utility for a homeowner.
Connecting your solar roof to the grid to become a “prosumer” is not very easy, and is impossible in some places. The grid may not even be set up to handle energy input from a residential location, much less manage it effectively. It’s the same story again with residential batteries. 33% of global energy storage capacity is expected to be in DERs such as EVs and residential batteries by 2030. The current grid architecture is absolutely not set up to handle this level of decentralization.
Another problem is that there is no way to trace the energy that you are using. Companies may want to use 100% renewable energy, but they are forced to take whatever they can get. Even if they are told it’s renewable, there’s no way to know — it all costs the same, and the claim that it is renewable is not necessarily verifiable.
Information on assets and customers is split up among the many different energy utility companies that collectively operate the energy grid. Due to this, DERs are comically underutilized in terms of value they could bring to the grid, as parts of the grid do not even know that they exist.
Energy Web Solutions
The main innovations of the Energy Web rest on a few key points:
- Create a decentralized and open energy grid that allows anyone to participate, is capable of handling the connections of billions of DERs, and stores all of the information on one network.
- Implement Self-Sovereign Identities (SSIs) and Decentralized Digital Identifiers (DIDs) that allow users to claim ownership of assets on the grid, and manage them.
- Let market participants invest in the grid’s infrastructure via DERs.
- Enable users to track the energy from production to consumption — enabling them to source exclusively renewable energy.
- Allow the market participants to price energy differently depending on its production source.
How The Energy Web Works
The Energy Web is not a product or a service. The team is building a global infrastructure to help power the world in a futuristic manner. In order to do this, they have developed the Energy Web Decentralized Operating System (EW-DOS), an open source collection of tools and kits for building the next generation of energy grid management systems. EW-DOS is made up of three layers: Trust, Utility, and Toolkits.
The Trust layer consists of the Energy Web Chain which runs on Proof of Authority (PoA), and is powered by Energy Web Token ($EWT). PoA is similar to Proof of Stake, except instead of tokens being staked, identity and reputation are staked. If a block validator does something shady, their reputation will be damaged. Energy Web Chain validator nodes are run by known corporations from around the world (currently there are 44 corporations worldwide that are participating in validating blocks). Being the base blockchain layer, this is the layer that runs smart contracts and handles consensus, as well as hosting decentralized digital identities (DIDs).
This layer of EW-DOS essentially holds a bunch of services that will be commonly used by applications running on the Energy Web. The purpose of these utilities is to make it easier to create and use decentralized applications. Some of these will be explored below.
The utility layer is run on Utility nodes that are hosted by members of the EW community. Using the services on the utility layer will incur charges to be paid in $EWT tokens.
The toolkit layer hosts free and open-source templates that developers can use to aid in “developing enterprise applications.” Some existing toolkits will be explored in the next section.
Features of EW-DOS
Launched in December 2019, EW-DOS is already packed full of tools, and has been utilized for real use cases around the world. Below are a few of the utilities and toolkits already included in EW-DOS.
Energy Web Naming Service (EWNS): This is similar to the Ethereum Naming Service (ENS). The purpose of this is to convert long hexadecimal strings into things that humans can easily remember, similar to email addresses, or how URLs act in place of IP addresses. An example of this might be that my wallet address could simply be yungbeef.ewns, instead of a hexadecimal string like 0xB19210Ddbdc3BEd1cd2fd6F9F18DE83BdEacE8Bf. This utility also allows mapping of sub-resources, so the imaginary Tesla powerwall in my garage would appear to the network as veryrealpowerwall.yungbeef.ewns.
TX Relay: The transaction relay utility makes it easier and more seamless to interact with the Energy Web. It basically enables users to interact with the network without holding or spending EWT tokens. Instead, the network will delegate proxy nodes to act as middlemen, who pay EWT fees for users and applications, if needed. This utility will be an immense aid in promoting mainstream adoption, as it nearly eliminates a massive technical barrier from the network.
ID Directory: The ID Directory utility is simply a smart contract that contains a list of every DID on the network, and what DERs/assets they claim to own. This provides an easy resource to reference for any application that interacts with DIDs.
Bridges: Bridges allow tokens to be transferred from one blockchain to another. Many bridges already exist in the blockchain world, and the Energy Web already has a bridge from the Energy Web Chain to Ethereum, allowing you to transfer EWT tokens back and forth. There will be far more bridges created as time goes on. Bridges improve overall utility and liquidity of tokens, and improve the blockchain space as a whole.
Oracles: As I explained in my previous article, oracles are used to verify data that is being input to a blockchain from off-chain sources. Oracles are especially useful when there are multiple data input sources required. EW is building on top of existing oracle protocols, namely Chainlink. The team is aiming to develop a network of independent oracle nodes to feed off-chain data into the network.
EW Origin: Origin features a host of Software Development Kits (SDKs) that developers can use to build applications. Using Origin kits for development will allow users to have a seamless User Experience (UX) across multiple applications, lower transaction costs, and provide greater market access. Developers will be able to easily connect their applications to existing systems and applications in the network.
EW Flex: The purpose of Flex is to act as a coordination engine for billions of DERs across the network, and to allow operational data and DER data to cross geographic/organizational boundaries. Flex will allow anyone to participate in the energy markets, aiding in the Energy Web Foundation’s mission of decentralizing the energy market.
Technically, EW Flex is also a host of SDKs like Origin, but with a different purpose. Flex allows developers to easily integrate support for DERs into the applications. These applications will solve the problem of DERs being underutilized. Gone will be the days of suffering through an hour long blackout while your neighbor with a large residential battery has all their lights on, and try as you might, you cannot buy energy from him.
The team has already used the available toolkits to create two applications that run on EW-DOS: EW Switchboard and EW Zero.
EW Switchboard: Switchboard functions as a management tool for DIDs, SSIs, and Verifiable Claims (VCs). While the utility layer of EW-DOS provides support for these, there is no easy way to interact with them. Switchboard provides a user interface to manage your identity and the assets under your control.
Switchboard will also function as a decentralized app store for dApps running on the Energy Web.
EW Zero: Zero’s purpose is to promote energy production with zero carbon emissions. It allows you to find and source fully renewable energy, and verify that it truly is renewable. Zero has integrated with energy markets around the world to provide a complete experience wherever you are. EW Zero is what lets you truly see the energy market.
We’ve covered the current grid and its problems, how the Energy Web works and its solutions, and taken a dive into EW-DOS and the EW ecosystem. Now, I have a thought exercise for you.
Imagine A World…
Where most residential homes have a large battery, some solar panels, and an EV. Where almost every location is a prosumer on the grid. Where production capacity is very renewable and decentralized. Where outages never happen. Where customers are free to pick whether they want renewable energy, and can easily verify where it was produced. Where the market dictates the prices of dirty vs renewable energy, incentivizing investment in renewables.
Imagine a radical future where the energy infrastructure is open and decentralized, and anyone and everyone is free to participate.
There’s no need to imagine — the Energy Web is here.