The Intersection Where Blockchain Meets Energy
Surplus of electrical energy is sometimes sold at negative values or even “burnt” directly to the ground. This means, that surplus is consumed in huge heaters and the only result of such energy is heat and pollution.
AN EXPLORATION OF DISRUPTIVE CONCEPTS IN ENERGY
Coinist was recently fortunate enough to chat with the team at Robotina, a team focused on disrupting the energy market by combining some of the most cutting edge technologies into one easy to use platform. Before we jump into the interview take a few minutes and watch their introductory video below:
First, thanks for joining us today to chat about your project. Many of our readers are well versed in Blockchain technology and will be able to understand how blockchain tech can be used as a tool within an energy related company. However, most of our readers don’t have a background in energy production and likely have a basic understanding of energy consumption. So in a quest not to lose anyone, let’s begin by covering some industry basics.
In today’s system, which you hint at being outdated and ripe for disruption, there are both producers and consumers of energy. Can you walk us through, in detailed, but easy to understand terminology what the relationship and supply chain looks like between producers and consumers?
Can you go into more detail about what the current infrastructure is and how it looks?
The electrical grid is the electrical power system network comprised of the generating plant, the transmission lines, the substations, the transformers, the distribution lines and the consumers.
The electrical grid is divided into three main components:
GENERATION – Centralized generation refers to large-scale generation sources whereas decentralized generations refers to sources close to consumption, for example rooftop solar panels.
TRANSMISSION & DISTRIBUTION – the transport of electricity from where it is generated to points of consumption.
CONSUMPTION – There are various types of consumers; namely industrial, commercial and residential consumers.
Therefore, the network that connects “producer -> distributor -> consumer” in a line means the electricity has to travel a long distance, which comes with a price.
Let’s take a look at what happens with the electricity flow in the electrical grid before the electricity reaches the consumer. It all starts on an exchange a few days before producers and energy providers negotiate the price. The reoccurring problem is that that agreement made a few days earlier on the exchange doesn’t always happen and the energy in the grid needs corrections. It can go both ways. Either the energy that should be produced isn’t injected into the grid or there is too much energy in the system. In both cases, you need an interference of transmission or a distribution operator who then charges penalties for not following the agreed schedule. But the fact is that renewable sources, which mostly depend on the weather, cannot always follow the agreed upon schedule and produce the exact amount of energy. Therefore, the electrical power system network relies on a one-way communication among main the components (producer, distributors, consumer) and this comes at a price.
Of course until now. Robotina ICO will provide a solution.
Can you explain in more detail what grids are? Are they the same as Networks?
You can imagine the electricity grid as a system with many small cells dependant on each other. They are connected to the same wire, but are without any internal communication and/or coordination. They all rely on actions taken from the command center – the grid operator – without even knowing if actions taken are bad or good for them.
Robotina empowers these cells to connect in a network not in a grid. We will support the exchange of information and facilitate the cooperation with substancial benefits for everybody.
You mention that “Cost of keeping the grid stable can be as high as 30 % of electricity cost”. Can you explain in more detail what “keeping the grid stable” entails?
Electricity costs for consumers are higher for several reasons. Factors like inefficient routing and dispensation of electrical energy, unreliable communication and monitoring all lead to wastage in the electrical power system network. The characteristics that allows electricity to be transfer via long distances also come with a price. The electricity needs to be produced (virtually) in real time. Caution needs to be taken not to produce too much or insufficient amount of electricity. This balance is chased 24/7. What Robotina is going to change is to involve everybody in keeping this balance stable. We will put this balance in the hands of AI and the HEMS IoT device. HEMS is installed in the fuse box inside the house and helps balancing the network from the end user’s household. Moreover, through financial and other incentives, we will stimulate the activity, which will reduce the costs of keeping the grid stable and help reduce pollution and energy wastage at the same time.
You mention that you will “transform traditionally ridged grids into more vibrant grids.” What does this process of redesign look like? You mentioned you’ll be building from the bottom up. Correct me if I’m wrong, but I’m assuming this will require a huge investment in infrastructure? Or can Robotina work in parallel with existing system? What systems, infrastructure and services will you continue to use from the existing system and which once will you create from scratch?
There will be no investment in the infrastructure. One of our main goals is to reduce new additional costs and adjustments needed to the existing electrical system (which has been the course of action now for years). It’s time to start optimizing the use of the existing infrastructure. To sum up – the infrastructure is already here, we only need to use it in a smart way.
In the video we embedded above you mention that “Smart grids are not as smart as we think” and that “energy supply chains are nothing more than chains”. What are your biggest 3 criticisms of the current system and how will Robotina seek to solve those problems?
Grids are mostly unidirectional – top down
There is limited or no cooperation
Information flow is not defined
The above means that cooperation within the grid is very limited. In order to solve these challenges, the Robotina IoT Platform solution uses a variety of information and communication technologies. Robotina IoT platform enables a network of physical objects or things connected to the Internet. Such objects are equipped with embedded technology to interact with their internal and external environments. These objects sense, analyze, control and decide individually or in collaboration with other objects.They do this through high speed, two-way digital communication in a distributed, autonomous and ubiquitous manner.
Robotina will not impact grids themselves, but will empower users to control their prosumers in real time and in cooperation between them. By agreggating consumers and prosumers, they can become important factor in the grid “democratization”, which will lead to cooperation. Robotina will empower all users by providing HEMS (Home Energy Management System), a smart IOT device. It can take decisions for them and connect them to the Robotina IoT platform which will trigger cooperation.
One thing I need clarification on is a point mentioned in your whitepaper. You mention that to shave peeks that energy is often bought and burnt. Can you explain in more detail what this means?
Surplus of electrical energy is sometimes sold at negative values or even “burnt” directly to the ground. This means, that surplus is consumed in huge heaters and the only result of such energy is heat and pollution. As stated earlier, balancing generated and consumed energy in the electrical grid is quite expensive and complicated, especially where penetration of unstable solar and wind power is high.
In your documentation you mention that when surplus energy is not needed “The surplus of electricity goes to waste if not used immediately.” Is there no way to store surplus energy? If not, can you explain the reasons why surplus storage is not possible and waste is the only option?
There sure are ways to store surplus of electrical energy in battery banks or in other media (e.g. pumped hydro), yet the investments needed in the storage capacity are huge. Balancing (especially local) grid by using flexibility at the consumers/prosumers level can be way more effective. Robotina also manufactures E-store, a smart local energy storage, which is excellent for home use, but there is so much energy surplus to be stored … One way is to use electric cars also as a storage, other is to shift consumption and create Virtual Power Plants. Robotina uses all of the mentioned methods.
Now that we’ve covered some of the basics let’s dive deeper into how Robotina will change things from the bottom up. You use three cutting edge technologies to solve many of the problems mentioned above. Let’s dive into each one in a little more detail. First you use Internet Of Thing (IOT) controllers which dynamically connect energy producers and consumers. Can you explain in more detail, using a real world example, how this works?
Again it’s all about balancing, while more connected things means a bigger potential. For a real world example you could take a house where all devices (water boiler, electrical vehicle, white appliances … ) are linked to our controller. In energy sector “knowing” means flexibility and flexibility means benefits. Sharing relevant information such as, how much a particular household’s consumption can differ from the usual consumption at certain time, brings benefits to everyone. By shifting loads, we provide flexibility, which allows providers to reduce secondary and tertiary reserve and this means less wastage. Part of the benefit is then returned to the users through lower costs.
Next, you use machine learning technology to ensure the platform is able to make the best decisions possible. Again, using an easy to understand real world example, can you explain how machine learning will impact both consumers and providers of energy?
Machine learning technology is not new in the energy sector. Providers have been using it for a long time to predict consumption of their customers and to buy the exact amount of energy needed. What we are bringing to the table for the first time ever is creating models that are applied at the household level.
Machine learning is used in two main ways:
Consumption prediction: predictiction of energy needs upfront allows us to buy the cheapest energy and to create best possible energy “cocktail” (sources).
Ambiental intelligence: by knowing the user behavior, we can optimize schedules, set points and everything else that impacts energy consumption. So we can effectively reduce the consumption.
Every household will have its own model that will be able to predict consumption and flexibility potential which in energy sector means “money”. Of course we will also have aggregated models and use the aggregated power.
Lastly, you’re using blockchain technology as the backbone for the entire system. Why did you decide on using blockchain technology vs other centralized options that are available?
No, we won’t use blockchain for the entire system. We are using blockchain for Robotina ioT Platform marketplace. Ethereum blockchain cannot cope with the data from IoT devices. IoT devices connected in networks can produce billions of data transactions within a blink of an eye and current speed of blockchain and cost of transactions pose a limit for that. Therefore, we will use it on Robotina IoT platform marketplace where ETH blockchain has great utility demonstrated in many financial use cases (trade finance, derivatives, vesting, etc). Smart contracts have a great potential to automate the ESCO crowdfunding, the group buys etc. on the Robotina IoT Platform marketplace.
We choose Blockchain based marketplace because it provides the business transparency on the platform. This will enhance the level of trust between electricity producers, distributors and consumers, and speed up the collaboration on energy effective programs, which directly bring benefits to individuals and communities. Blockchain integrated on Robotina IoT platform enables new partnerships, deep engagement with local communities,and innovations to strengthen individual and collective assets.
You mention that all transactions happen automatically and many times / second. What blockchain are you using to build Robotina and how will you avoid the issue of blockchain bloat?
We intend to avoid the Blockchain bloat by following one simple rule in the business development – Take advantage of technology and do not force it where not appropriate. Therefore, we figured out that IOTA is not a viable enterprise solution. Moreover it currently doesn’t have a vibrant community nor a pool of knowledge resources we could apply/use right now. On the other hand ethereum community is dynamic and there are several use cases where mistakes were made and also amazing things achieved which we can learn from. Moreover we are optimisitic about modularity of ethereum which will enable us prudent business development of the platform marketplace. We want to offer new services as time passes by, so this could help us move the blockchain solutions to the market faster and with more certainty/confidence.
You have an incredible amount of utility built in your token. It can be used to buy energy or the hardware needed to run your systems. However, one thing that was unclear to me is what was meant when you mentioned that “users get tokens by sharing their assets”. In another section within your documentation you mention that users can trade unused power. Can you explain in more detail how this process works and how users get rewarded in tokens? Can you use a real world example to help illustrate your point?
Household consumers like fridge, oven, washing machine, dryers, the air conditioner. etc are considered as assets when connected to the Home Energy Management System (HEMS). HEMS is able to participate in the two way communication and to program the consumption of electricity of consumers based on this communication. If HEMS reduces the energy bill by 30% and your energy bill drops from 150$ to 110$, than 5$ will come in form ROX tokens and turn your consumers into assets. Each service offered on the platform will generate direct benefits and ROX will take integral part in it.
The rewarding system works in such a way that a part of the benefits goes into the rewarding pool and from there to the community. So someone who contributed 5$ of savings to the pool will then get entitled to rewards from pool. This basically means that for each benefit a part will come in form of ROX.
Can you explain in more detail how collaborative group buying will work? If I’m a consumer of energy what the benefits of collaborating in group buying and how can I get involved in this feature? Is it mandatory to group buy?
Group buying is not mandatory in any way, it is simply a new opportunity which comes from aggregation of many consumers/prosumers connected to the platform. Cooperative group buying is already practiced in limited cases in the non-connected communities, but it can only gain in size and importance once users with or without connected IoT unite on the platform. As more and more prosumers are engaged in aggregation and cooperation, better is the predictability of their consumption, which in turn helps with grid stabilization. New innovative business models are changing the energy market we know today. Again, finding innovative solutions at the local grids level is the key.
In practice, this is a community initiative facilitated and made possible by smart contracts and smart brokers (IoT platform). After parameters are defined, smart brokers will negotiate on the behalf of participants and once agreement is reached, the deal is sealed and executed. The sharing and collaborative economy model, regulated by smart contracts, will distribute most of the negotiated savings (up to 80 %) to the participating users. The balance will be an income for the community
How big of an issue is marketing penetration? For example, how easy is it to introduce this technology into a country? In some countries the electrical system is nationalized in other places it’s private. How are you going to start getting this technology into people’s homes?
We endorse the bottom up approach meaning, users will buy our devices because they provide them with significant benefits (savings, control, earnings and improved safety/security). There are no obstacles for this and no regulations which would prevent us from doing it. Moreover, all partners in the energy chain will be stimulated to cooperate, because they will have commercial benefit. Once again: we do not need to agree with the providers, but of course we will all benefit from it.
The key market drivers are the share of renewable energies, cost of electrical energy and legislation. Each country aiming for decarbonized energy supply, will face the same challenges of grid (in)stability, and decide between huge investments into a central grid or following decentralized cellular approach, which is promoting proactive engagement of consumers/prosumers. The technology that is needed will either be bought by people directly, or it promoted by other players, for example DSOs.
Thank you for taking the time to share your project with our readers. You have a very interesting project on your hands and we wish you the best of luck! To our audience, if you’d like to learn more about the Robotina project you can do so by visiting their website here: https://www.robotinaico.com/
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