Blockchain Technology Piloted by Netherland’s National Grid

Electricity isn’t really the first thing that comes to mind when you consider blockchain technology, but TenneT, the national electricity transmission system operator of Netherlands which has as sole shareholder the Dutch Ministry of Finance, is launching two blockchain based pilots.

In collaboration with Sonnen, which produces home energy storage systems for private households and small businesses, Vandebron, a supplier of 100% renewable energy produced by local sources, and IBM which has backed the Hyperledger permissioned blockchain, TenneT hopes to, “integrate flexible capacity supplied by electric cars and household batteries into the electrical grid,” according to a press release.

They are launching a pilot in Netherlands to manage imbalances in electricity supply and demand by allowing “customers who own an electric vehicle to make the capacity of their car batteries available to help TenneT balance the grid.”

This process is integrated with blockchain technology so that companies can know who gave how much electricity at what time and thus compensate them accordingly. Because blockchain tech is largely immutable and can be fairly transparent, they can further see what caused what if there are any problems. Philip Schröder, Sonnen’s Managing Director, publicly stated:

“The blockchain technology is what makes mass simultaneous exchange between all these parties possible in the first place, and is thus the missing link to a decentralised, completely CO2-free energy future.”

The second pilot is to be launched in Germany to help with potential transportation problems of wind energy produced in northern Germany when it travels to the industrial south of the country.

If there are any limitations of wind energy transportation from north to south, the project will employ a network of residential solar batteries to help reduce such limitations. TenneT says:

“The blockchain presents the operator from TenneT with a view of the available pool of flexibility, ready to activate at the push of the button, after which the blockchain records batteries’ contribution. This will enable sonnen and TenneT to support the integration of renewable energy sources into the German electricity supply system.”

The project will use Hyperledger’s permissioned Fabric blockchain, developed under the umbrella of the Linux Foundation in collaboration with IBM and a number of other companies.

It’s not clear why ethereum’s blockchain is not being used instead since it has been tried for energy sale by Siemens in collaboration with an energy start-up LO3 Energy, but that might just indicate that Hyperledger and Ethereum are sort of in a race.

In any event, the deployment of this pilot at such national scale is a very first. If it works in managing what appears to be an incredibly complex system, and does so while achieving their aim, it may well be not just a pilot, but a glimpse of how national grid systems operate across the world in the near future.