Three major European grid operators are rolling out a new blockchain platform to tap the growing penetration of small-scale distributed energy resources for grid balancing. 

As behind-the-meter resources like batteries, heat pumps and electric cars proliferate, challenges remain in finding ways for them to benefit the wider grid. Aggregating such systems — and compensating their owners — requires large numbers of transactions to be balanced and validated constantly.

The payoff, however, is potentially huge: homes and businesses could make money by offering their flexible energy resources to grid operators. That would make it more valuable to own such systems and help to increase the overall penetration of renewables.

The Equigy consortium, launched last month, believes blockchain is the key to unlocking such a system. The consortium includes three transmission system operators (TSOs): TenneT (with operations in Germany and the Netherlands), Swissgrid of Switzerland, and Terna of Italy. Denmark’s Energinet is in the process of joining, opening the way for initial deployment across five countries.

The Equigy consortium will run a free-to-use "crowd-balancing" platform to register and track transactions. “We see the project as one of market facilitation, which is a role of TSOs in the European context,” René Kerkmeester, digital transformation lead at TenneT and co-founder and program director of Equigy, told GTM.

The consortium will build on pilots done by TenneT that have linked to home batteries from sonnen and electric cars from Tesla, validating the transactions using blockchain. After showing that the underlying technology works, TenneT approached other EV makers including Nissan, working on the premise that the additional revenue opportunity for owners of EVs and batteries could boost sales. 

Equigy's plan is to scale up and expand the blockchain platform across Europe over the coming decade, Kerkmeester said. "We believe that by 2030 there will be sufficient EVs and home batteries in place to balance Europe’s grids to a large extent, if not completely.”

Big blockchain opportunity

The selection of blockchain as the technology of choice was based on both short- and long-term considerations, said Martin van 't Verlaat, digital transformation technology program manager at TenneT and Equigy technology leader.

“In the short term, it brings a distributed shared ledger, which avoids the need for a single central database open to all. We could have used other technologies for this, as there are just a few participants. But looking ahead, we expect the energy market to become one big dynamic, decentralized system with many actors interacting at the different voltage levels and believe that blockchain is the technology that can grow toward this vision," van 't Verlaat said. "It future-proofs us from an IT strategy perspective.”

Although run on a non-commercial basis, Equigy determined that the blockchain should be private rather than public, limiting participation to local energy sector participants and providing the required level of security and trust between them. Following a year-long tender, the open-source Hyperledger framework was selected with IBM as the service provider. 

The platform is implemented by each TSO on a project basis at a national level; it's not the intention to create a Europe-wide blockchain deployment, van 't Verlaat said. Approximately 80 percent of the solution is common and 20 percent requires tailoring to national circumstances.

Nine initial projects are already underway. TenneT has EV pilots underway with Nissan and BMW, and another focused on batteries in the Netherlands. Swissgrid is working on a pilot on the use of EV flexibility for frequency containment reserve. Terna has two projects underway in Italy, one on the performance and capacity of EVs when used for flexibility and the other on EV fleets as virtual power plants.

Francisco Carranza, managing director of Nissan Energy, said that the company's electrification strategy includes ensuring that EVs become part of the broader energy ecosystem.

“Projects such as the collaboration with TenneT enable us to understand better how EVs can be better implemented into people’s lives and [support] their energy needs,” Carranza said. “Nissan is pleased to see this platform rapidly scaling across Europe.”

More TSOs in talks to join

More European TSOs are in discussions to adopt the blockchain platform, and more pilots are being prepared, Kerkmeester said.

While the first demonstration projects have been carried out within Europe's existing regulatory framework, changes will be needed for the platform to truly scale up — including eliminating the possibility of double taxation and double grid fees as power goes out and comes in.

"We also are working with the manufacturers to identify where ecosystem changes are needed and will then lobby them at the European level and in the TSO home markets," Kerkmeester said. "If politicians want the energy transition to take place with the participation of consumers, then changes are needed, and politicians’ attention is needed to make them.”