BLOCKCHAIN, que oportunidades para o sector energético ?

17 de Maio de 2017

António Vidigal

Drawing origin: PwC

Meeting at EPM offices in Medellin: “- What is EDP´s strategy for blockchain ?”
 From the Internet of Information to the Internet of Value

May 31, 1993 May 15, 2017

Don Tapscott interviewed

by McKinsey

.
“Backed by sophisticated technology, blockchain
can potentially disrupt every institution in some way. In
this interview with McKinsey’s Rik Kirkland, Don
Tapscott, coauthor of Blockchain Revolution and
cofounder of the Blockchain Research Institute, posits,
“What if there were an ‘Internet of value,’ some kind of
global distributed ledger or database where anything of
value, from money to music to votes, could be
managed, transacted, and exchanged in a private and
secure way?”” McKinsey
“In comparison to the
almost $5 trillion traded on
the international currency
markets each and every
day, Bitcoin’s $29 billion
market cap is next best
thing to a rounding error. It
could vanish entirely and
only a small cadre of true
believers (and high-end
drug dealers) would even
mark its passing.”

The CEO of a Financial Institution

 WannaCry2 Virus attack on Friday 12th May 2017

• 300,000 computers with files locked

• 150 countries attacked
• 167 people had payed the ransom 72
hours after the attack, totalling US$
50,000.
The ransom was US$ 300, to be
payed in bitcoin
What is “Blockchain” ? Where does it come from?

Coin

“Bitcoin is a digital and

global money system (currency). It
allows people to send or receive
money across the internet, even to
someone they don't know or don't
trust. Money can be exchanged
without being linked to a real “Satoshi Nakamoto”
identity. The mathematical field (2009)
of cryptography is the basis for
Bitcoin's security.”

Wikipedia
Technology

7
2008 Financial Crisis
31th October 2008
 Some key dates

2008
• August 18 Domain name “bitcoin.org” registered
• October 31 Bitcoin Design paper published
• November 09 Bicoin project registered at SourceForge.net

2009
• January 3 Genesis block established at 18:15:05 GMT
• January 9 Bitcoin v0.1 released and anounced on the
cryptography mailing list
• January 12 First block transaction in block 170 from Satoshi
to Hal Finney
2010
• May 22 “I’ll pay 10,000 bitcoins for two pizzas, costing 25
dollars”. Today value is US$ 17 m
 The New Yorker, May 6th, 2016

Satoshi Nakamoto is the name used by the unknown person

or persons who designed bitcoin and created its original
reference implementation. As a part of the implementation, he
also devised the first blockchain database.
 Midleman

Trusted third party

1. Validates entries
2. Safeguards entries
3. Preserves historic
record
 Midleman

Trusted third party

1. Validates entries
2. Safeguards entries
3. Preserves historic
record

Bitcoin approach
 Blockchain is a secure, shared, distributed ledger

Origin: Microsoft
 Ledger implementation in Blockchain

Origin: Microsoft
 Blockchain is a secure, shared, distributed ledger

• No middleman
• Distributed nodes are synchronized

Origin: Microsoft
https://www.weforum.org/agenda/2015/11/how-will-blockchain-technology-transform-financial-services/
The verification method. A block after being verified is connected to the previous block
to create a chain, thus the name “blockchain”

With Bitcoin, the size of the current

blockchain rests at about 15 GB, growing
by about 1 MB per hour.
The details get rapidly quite complex
 Blockchain transaction validation process involves digital signatures using public
and private keys, distributed verification and cryptography
 An entity transfers bitcoins digitally signing (using ECDSA¹)  bitcoins are transferred by sending the transaction to ne net,
an “hash” of the previous transaction with the public key where the nodes validate by consensus if the transaction is
of the next owner of the value transfered. viable and if so it is added to a block of transaction in the public
 The digital signature is added at the end of the transaction. registry.
 Each new block of transactions is linked to the previous by an
“hash” using SHA-256² algorithm.

¹ Elliptic Curve Digital Signature Algorithm: https://en.bitcoin.it/wiki/Elliptic_Curve_Digital_Signature_Algorithm

² Secure Hash Algorithm é uma função criptográfica não reversível, que gera uma assinatura única de 256 bits (32 bytes)
21
Smart Contracts are an important functionality of Blockchain

• Business rules define a transaction • Guaranteed future execution

• Encoded in the programming language • Example: Contractual conditions under which an
• Verified, signed & encrypted option executes
The verification method. “Miners are an importante part of the process. 80% to 90% to
run a node is Electricity. Technology as evolved from CPUs, to GPUs to ASICs
 There are multiple implementations of blockchain available

Implementations available: Main differences:

 Bitcoin  Public or private

 Ethereum  How consensus is created
 Ripple  How“ smart contracts” are implemented
 Stellar  Flexibility of customization
 Tendermint  Application Programming Interfaces (APIs)
 Factom  Scalability and latency
 Hyperledger  Resources required
 …and many others
 But blockchain is not suited for:

1. High Performance (milli) second transactions

2. Low value, high volume transactions
3. Just one participant
4. Replacing a transaction processing solution

And:

6. Few production uses other than bitcoin

7. Entreprise offerings are imature ´’A HUGE aircraft hangar in Boden, in northern Sweden, big
8. Hype is intense and the market is years away enough to hold a dozen helicopters, is now packed with
computers—45,000 of them, each with a whirring fan to stop
from consolidation it overheating. The machines (pictured) work ceaselessly,
9. Difficult to see a path from POCs to production trying to solve fiendishly difficult mathematical puzzles. The
solutions are, in themselves, unimportant. Yet by solving the
puzzles, the computers earn their owners a reward in bitcoin,
a digital “crypto-currency”.’ The economist
Before Energy blockchain addressed other sctors. It has showed the power to disrupt
them.
Xapo debit card allows
the use of bitcoins for
everyday purchases
and to withdraw cash
from ATMs
This Israeli Ride-Sharing App
Is the Utopian, Hippie Uber

Ride-hailing app La’Zooz runs

like a commune, using digital
tokens
If we put Land Titles
on a blockchain they
would become
imutable
We have designed and operated powersystems in the same way for many years
High Voltage Transformer

Medium Voltage Transformer

Low Voltage Transformer Very predictable,
high performance,
but not flexível,
difficult to innovate

IBM
SNANET

Everything centrally
defined
 Less
predictable
but more
flexible and
resilient

Energy Web:
“Plug and Play” and
“Peer to Peer”
 Smartgrids are mandatory. It should be possible to leapfrog present paradigm.
Power systems are facing three trends: decarbonisation, decentralization, digitalisaton.
Old Grid Energy 4.0 Grid

• Transactive enegy model

• Central generation
• Distributed generation
Cyberspace / Cloud
• One-way flows
• Two-way flows
• Central control
• Distributed generation
• Dummy loads
• Distributed storage
• Distributed Control
• Responsive loads Controls
Sensors
• Loads/ Local Generation IoT
enabled

drawing origin: solutions.3M.com

Transactive Energy

The term "transactive energy" is used here to refer to

techniques for managing the generation, consumption or
flow of electric power within an electric power system
through the use of economic or market based constructs
while considering grid reliability constraints. The term
"transactive" comes from considering that decisions are
made based on a value.
The Internet of Things (IoT) is growing at an unprecedented pace. Wireless has leapfrogged fixed
wire. Communications will be availably globally ahead of Energy. Energy should make use of them.

Google project “Loon”

Number of connected devices, over time

(Estimated
)

Source: NCTA; drawing: The New Economy 3

9
IoT is becoming a reality in the energy space. Soon all new appliances will be IoT enabled.
With re:dy it is easy to retrofit old appliances

• New Rate Structures to drive behaviour

• Responsive demand

• The Internet of Things based on embedded

computing power in devices
The first project, with notoriety, using Blockchain for Electriciy, has been the “Brooklyn Grid” project.
The initial motivation was Sandy Storm

In Brooklyn the TransActive Grid, a joint venture

between Lo3 Energy and ConsenSys, a blockchain
developer, is a co-operative system. On one side of
President Street, five homes with solar panels generate
electricity. On the other side, several homes buy power
when. In the middle is a blockchain network, managing
and recording transactions with little human interaction.

Siemens and U.S. startup LO3 Energy collaborate on blockchain microgrids

Erlangen, 2016-Nov-21

Siemens and the New York startup LO3 Energy are collaborating in the field of
innovative microgrids. The goal of the collaboration is to jointly develop microgrids that
enable local energy trading based on blockchain technology. Siemens is involving its
next47 unit, which was established in October 2016 as part of an ecosystem for
partnerships with startups to take a leading role in the evolving decentralized energy
system market. As a startup, LO3 Energy is currently supported by Siemens Digital Grid
and next47, in developing a solution for a blockchain-based microgrid in the New York
borough of Brooklyn – the first of its kind in the world and a starting point for developing
other joint microgrid projects in US and other countries.

44
 …Several Utilities started exploring the concept

RWE Vector Solar Change

A Slock.it An EV charging station acting as a  A Vector has a partnership with Power  SolarChange uses blockchain to reward
point at which both customer Ledger, an Australian start-up , to test solar residencial through “SolarCoin” (1
authentication and the processing of retail solutions MWh solar production= 1 SolarCoin).
payments takes place.

Smart contracts, invoicing P2P market Renewable energy certificates

Alliander Enel * Vattenfall *

 POC at Texel island, testing p2p and EV  Use of blockchain for the management  A Vatenfall launched a “Powerpeers”
charging of LV and MV networks online platform, allowing users to buy
 P2P platform for energy and sell energy
 Payment of micro-grids between users

P2P, EV charging Network management, trading, P2P P2P market

* Being investigated
Alliander: Transactive energy in real time at Texel island
To insure commercial viability of microgrids in developing countries it should be possible to
replicate innovative business and technical models in multiple geographies. Energy 4.0 and IoT
concepts may help to achieve benefits of scale

Cyberspace / Cloud
Energy access

Social
Dimension
Sensors Controls

Environmental

…….
Economic
Dimension Dimension

Clean Commercial
technologies viability
Blockchain may be a way to crowdsource private sector investment in solar in developing
countries . It will allow to radically reduce the cost of transactions enabling small transactions

Investors

Smart
Contracts

...
criptocurrency
kWh

SPV
Origin:PwC
From the Internet of Information to the Internet of Value

Apr. 12, 1993 May. 15, 2017

Don Tapscott interviewed

by McKinsey

Changing the architecture of the corporation

“In the book, Alex and I hypothesized about how far this could go. We
developed this idea that you could have a company that would be a
bunch of smart contracts and autonomous agents on a blockchain.
And that this company would have no people—it wouldn’t need a
CEO or management or people.

We struggled with, “Should we publish this? It’s so sci-fi.” We

published it. The week after the book came out, an organization called
the Decentralized Autonomous Organization was created, that had no
management, no CEO, no people. It was just a bunch of smart
contracts on a blockchain and some application programming.”
To grasp where things are going we will have to learn to think exponentially and it has never been easy

SOURCE: Singularity University

To grasp where things are going we will have to learn to think exponentially and it has never been easy

SOURCE: Singularity University

“Quer o queiramos ou não, vão verificar-se grandes
mudanças no Setor Energético, algumas das quais não
somos ainda capazes de antever. Temos a obrigação de
estar preparados para elas!”

Muito obrigado !