Published: May 15, 2018 8:36 a.m. ET

   IBM: The Veridium-issued token will be a new way to address the challenges of global warming

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AARONHANKIN

REPORTER

U.S.-based multinational IBM is joining forces with Hong Kong’s Veridium Labs to use blockchain, the distributed ledger technology, to increase the efficiency in the carbon-credit market and make the process of offsetting carbon credits easier.

Using IBMs expanding blockchain technology and expertise, the environmental financial technology company will issue and manage the tokens on the Stellar network. The move is a further step for Veridium Labs in pursuing environmental protections through distributed ledger technology.

“For years, we’ve been trying to mitigate environmental impacts at every point in the value chain, however previous solutions still presented significant complexities and costs,” wrote Todd Lemons, CEO and co-founder of Veridium in a press release. “Our work with IBM is the first step in dramatically simplifying the accounting and offsetting processes, and therefore ultimately helping reduce costs.”

For IBM IBM, +0.75% , it’s further expansion of its growing blockchain development to improve business integrity. On April 26, IBM announced its distributed ledger technology would allow U.S. retail jeweler Helzberg Diamonds to track diamonds throughout the supply chain to help verify authenticity.

Read: Can blockchain technology live up to the hype? Barclays analysts say no

As well as the social initiative, this partnership is aimed at helping to fix a costly and inefficient market.

“With no centralized exchange for exchanging carbon footprints, it’s essentially a market failure,” said Jared Klee, blockchain offering manager at IBM. “[The technology] should enable companies interested in offsetting their carbon footprint to do so with less friction. It will be faster easier and more cost-efficient.”

Klee added that he hopes this initiative can expand beyond companies. “Over time we hope individuals can offset their impacts, but will likely require some change in the technology.”

DECEMBER 22, 2017 / 4:23 AM / 6 MONTHS AGO

SINGAPORE (Reuters) - Energy startups have been using blockchain to power electricity sharing in microgrid trials from Texas to Tasmania for a year or so.

An Electrify SG engineer shows a PowerPod that will be installed to record data of photovoltaic solar panels on a rooftop in Singapore. REUTERS/Edgar Su

But now companies are moving beyond trials to commercial projects, leveraging the distributed ledger technology for payments and trading on a city-wide and even national scale.

“What the internet did for communications, blockchain will do for trusted transactions, and the energy and utilities industry is no exception,” said Stephen Callahan, Vice President, Energy, Environment & Utilities, Global Strategy, at IBM.

The trend illustrates how blockchain is swiftly moving beyond financial services and cryptocurrencies, and offers a glimpse of a growing challenge to the $2 trillion energy market.

Blockchain is a database of transactions distributed among multiple computers. It solves two key problems in the online world: transacting without the need of a trusted intermediary, and making sure those transactions can’t later be altered, removed or reversed.

This appeals to the energy industry in several ways. As the market liberalizes and renewable energy grows, blockchain offers a way to better handle the increasingly complex and decentralized transactions between users, large- and small-scale producers, retailers and even traders and utilities.

Blockchain’s use of tokens also offers a way to reward users for saving energy, and for small-scale transactions between individual users with solar panels who are both producers and consumers - known as “prosumers”.

Being able to add “smart contracts” onto a blockchain would also make it possible for actions to generate automatic transactions down to the smallest level, where meters and computers could autonomously reconcile supply and demand.

“The prospect of being able to track particular electrons via a blockchain as they move onto or off the energy grid has captured the imagination of many companies,” said Daniel Sieck of U.S. law firm Pepper Hamilton.

All of this would save money and could transform the way we produce, store and consume electricity, what DHL Energy president Steve Harley calls the “internet of electricity.”

ROOM TO GROW

The World Energy Council predicts that such decentralized or distributed energy will grow from 5 percent of the market today to 25 percent in 2025.

The past few years have seen proofs of concept and trials, from small microgrids to projects by big players such as Shell (RDSa.L), BP (BP.L) and IBM (IBM.N).

Few energy companies, however are making significant investments into blockchain technology, says Shane Randolph, managing director at Opportune LLP, an energy consulting firm based in Houston.

“The ones that are engaging in the conversation are largely doing ‘blockchain tourism’ without developing applications.”

That leaves opportunities for newcomers.

Power Ledger, an Australian startup which raised A$34 million ($26 million) in an initial coin offering, or ICO, in October, is building platforms to enable commercial operation ofmicrogrids in Thailand and India and two commercial buildings in West Australia.

It also recently launched a 200-customer trial microgrid with power retailer Origin Energy (ORG.AX) in Sydney. Energi Mine, a UK-based startup, has created a blockchain-based platform to reward energy-saving users with tokens they can use to pay their energy bills or charge their electric vehicles.

It says it is already making money, albeit from the artificial intelligence side of its business.

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A Singapore company called Electrify has been running a price comparison marketplace as the country liberalizes its electricity market. Electrify plans to launch a blockchain-based exchange for all consumers and producers next year, and is talking to one of Japan’s biggest utilities <words deleted>about doing something similar there.

Grid+, a U.S. startup, will launch its first retail device next year in Texas, using the Ethereum blockchain to allow users, whether they’re traditional consumers or owners of solar panels and batteries, to buy and sell electricity at wholesale prices.

More projects are on the way. Energy startups will have raised about $200 million from initial coin offerings this year alone, with a dozen more planned next year, according to data collected by Reuters.

OBSTACLES LINGER

But obstacles remain. They include the entrenched nature of the incumbents, and questions about blockchain itself, which is less than a decade old.

Martha Bennett, an IT industry analyst at Forrester, points to a “misunderstanding just how immature the technology is.” Then there’s the regulatory landscape. “Because the energy sector is a regulated industry,” said Pepper Hamilton’s Sieck, “widespread adoption of many possible blockchain use cases will require regulator buy-in.”

There are signs of that. Singapore’s Energy Market Authority launched a sandbox for energy innovations in October, while U.S. states including Vermont have passed legislation designed to help apply blockchain technology.

JASON DEIGN OCTOBER 27, 2017

A growing number of companies are developing blockchain for the energy industry.

This week a South African blockchain startup called Sun Exchange raised $1.6 million in seed funding to launch a solar power crowdsale platform. It is hardly unique, though.

Recent weeks have seen new blockchain-based energy hopefuls cropping up like mushrooms after the rain. Here are 15 of the top names making headlines.

Conjoule

Conjoule offers a blockchain platform designed to support peer-to-peer trading of energy among rooftop PV owners and interested public-sector or corporate buyers. The company was hatched in Innogy’s Innovation Hub in 2015 and pulled in $5.3 million in funding from Tokyo Electric Power Company and others in July. Conjoule has been running a pilot in Germany for the past year.

Drift

Seattle-based Drift is leveraging distributed ledger technology, machine learning and high-frequency trading to create a differentiated competitive retail energy provider. It raised $2.1 million in May and is currently operating in New York City.

TOP ARTICLES

Greeneum

Greeneum revealed this month it is running test nets and pilots for its peer-to-peer energy trading platform “in Europe, Cyprus, Israel, Africa and the U.S.” It expects to have a viable product platform out by mid-2018.

UPDATE: GTM originally reported that Greeneum is being developed by the same team as SolarCoin, which is incorrect. On October 25, the SolarCoin Foundation issued a statement clarifying that Greeneum is a stand-alone project and that none of SolarCoin's founders "has a role or formal knowledge of the project specifics." Previous statements suggested otherwise.

Grid+

In one of the most hotly hyped launches in the energy blockchain world, Grid+ last month raised $29 million through its token pre-sale, which will fund the development and launch of its blockchain-based competitive retail provider in Texas. The hype was partly a result of Grid+’s origins: It was created by top New York blockchain shop ConsenSys.

UPDATE: Initial reports show that Grid+ raised $40 million through its token pre-sale. However, the firm said it actually raised $29 million from the pre-sale, which amounts to 36,422,909 GRID tokens. GTM has updated this story to reflect the correct dollar amount.

Grid+ acknowledged it made some errors in its pre-sale calculations, but they had no bearing on the total dollar amount raised. With the pre-sale complete, that leaves 53,577,091 GRID tokens for sale in Grid+'s public token sale taking place October 30.

Grid Singularity

Grid Singularity is an Austrian startup developing a blockchain purpose-built for the energy industry, backed by a team of experienced energy market professionals and leading blockchain and smart contract developers, according to its website (see also: Energy Web Foundation).

Electron

U.K. startup Electron began with a blockchain-based solution to help customers in the U.K. switch energy suppliers, but has since been communicating a vision of leveraging its platform to support broader energy trading and grid-balancing solutions. Last month, with help from Siemens and National Grid, it won U.K. government support to scale up its platform.

Energy Web Foundation

Established in February by Grid Singularity and the Rocky Mountain Institute, Energy Web Foundation is not so much a startup as an alliance body aimed at introducing an open-source blockchain designed for the electricity market, identifying use cases and helping build an ecosystem of participants. Big-name energy firms pumped $2.5 million into the foundation in May. 

ImpactPPA

While most energy-based blockchain players offer a token for trading, Manhattan Beach, California-based ImpactPPA has two: one to fund projects and one to consume energy. The company is targeting the estimated 16 percent of the world population that lacks a reliable source of energy.

LO3 Energy

As well as backing Electron in the U.K., Siemens last year announced a tie-up with New York peer-to-peer blockchain developer LO3 Energy. The promising startup this month pulled in an unspecified amountof funding from Braemar Energy Ventures and Centrica Innovations.

MyBit

MyBit is designed to help crowdfund solar panels by distributing the ownership of each system across several owners. The company raised the equivalent of around $2.7 million in a token sale in August.

Power Ledger

Australia’s star energy blockchain player, Power Ledger, had pulled in more than $24 million from around 15,000 supporters by the time it completed a token generation event earlier this month. The company is rolling out pilot projects for its blockchain platform, built to support a broad range of energy market applications, in Australia and New Zealand.

SolarCoin

SolarCoin was launched in 2014 as a rewards program for solar electricity generation, with one of its coins equaling a megawatt-hour of production. The scheme is set to reward 97,500 terawatt-hours of generation over 40 years, but for now its valueremains low.

Sun Exchange

Sun Exchange’s motto is “solar-powered money.” Founded by U.K. utility-scale solar pioneer Abraham Cambridge, the company aims to let supporters around the world crowdfund PV down to the level of an individual solar cell and lease them to schools and businesses in Africa. The company's marketplace is focused on funding and building new generation systems, rather than trading power. Sun Exchange has been operational for several years and has successfully funded four solar projects. The company recently raised $1.6 million in seed funding, which will go towards expanding its business and global capabilities.

UPDATE: An earlier version of this article stated that Sun Exchange is a "peer-to-peer solar energy trading platform." This entry was updated to clarify that Sun Exchange does not trade power, and is focused instead on funding new solar projects.

Veridium Labs

Veridium is a financial technology firm aiming to create a new asset class called “EcoSmart Commodities.” “Veridium will provide a new vehicle for corporations to embed environmental replacements into the cost of their products,” co-founder Todd Lemons told GTM.

WePower

WePower is developing an Ethereum-based platform to fund renewable energy projects through the sale and trading of the “tokenized” energy produced by those systems. The company is looking to raise $30 million from an ICO next month. 

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GTM will host an entire panel session on Blockchain at the first annual U.S. Power & Renewables Conference in November. You'll get an in-depth look at how the renewable energy market will interact with the U.S. power market, and how those interactions can impact overall industry development and market growth. Curated by GTM Research, MAKE, and Wood Mackenzie energy analysts, we’ll take an expansive view of key issues and timely topics, bringing together a diverse group of energy experts and stakeholders to discuss demand dynamics, economics and business model shifts, and policy and regulatory implications.

By Rakesh Sharma | Updated December 21, 2017 — 11:13 AM EST

Even as other industries are swept up in waves of disruption unleashed by technology, the energy industry has been slow to embrace change. But the introduction of blockchain promises to speed things up and radically transform the industry's processes and markets. As of this writing, there are two prominent use cases for blockchain in the energy industry.

The first one is in enabling a peer-to-peer energy trading model. The proliferation of Distributed Energy Grids (DERs) or independent renewable energy sources (such as solar panels) that connect to the grid has helped convert energy consumers into producers who are able to sell excess power back to the grid. (See also: The Current State of the Solar Industry). 

However, that process retains the existing dynamic of the electricity markets, centralizing the task of buying and selling energy under the control of the utilities. Bitcoin's decentralized network could disrupt that paradigm and enable customers to sell excess power to each other within a given area. Several startups and utilities around the world have already developed pilots or are considering projects to test this possibility. For example, Brooklyn Microgrid is developing an app that enables energy trading between consumers in a neighborhood within the borough. Similarly, Grid Singularity, a European startup, is focusing on the exchange of granular and private data between different parties within the energy market.

Even large energy firms are getting in on the action.  British Petroleum p.l.c. (BP) and Austria's Wien Energy are among the firms that participated in an energy trading platform trial earlier this year. (See also: How Blockchain Is Helping to Change Government Services.)

Another common use case for blockchain within the energy industry is development of cryptocurrencies for monetary payments. Several utilities have already begun pilot projects to enable such transactions. For example, Marubeni Corporation (MARUY) accepts cryptocurrency payments in some regions of Japan. In certain scenarios, the utility of blockchains goes beyond payments. For example, Bankymoon, a South Africa-based blockchain startup, partnered with Usizo to enable cryptocurrency monetary payments for bitcoin-compatible smart meters located in remote areas.

But this is just the start. Blockchain could lead to further changes within the energy ecosystem. For example, a distributed ledger with several energy consumers and producers could lead to multiple rates within markets instead of the single utility-set rate that is currently prevalent. 

Quick Note:  See  https://www.ozy.com/fast-forward/wtf-is-blockchain-inside-the-most-disruptive-tech-since-the-internet/81567

By 

April 9, 2018, 7:01 AM EDT

The future is selling solar power to a neighbor with a Tesla

The Way Humans Get Electricity Is About to Change Forever

The Way Humans Get Electricity Is About to Change Forever

If utilities think rooftop solar panels and batteries are bad for business, blockchain should scare the bejeezus out of them.

That’s because in addition to helping more people slap panels on their rooftops -- which eats into power sales and taxes grids -- the distributed, digital ledger that’s proliferated across industries can also be used to trade electricity without a utility even knowing it. Imagine your neighbor with a solar panel directly selling you cheap power to charge your Tesla.

Sure, there are some utilities that see the future and are trying to use blockchain to their advantage, but others ignoring it may soon start losing business to new hyper-local energy suppliers with a powerful tool to manage billions of data points cheaper and faster.

Utility Defections

Consumers in California's competitive power market are increasingly getting their power elsewhere. Portion of demand met with non-utility sources is accelerating.

Source: PG&E regulatory filing

“It’s changing the entire infrastructure,” said Jan Vrins, head of Navigant Consulting Inc.’s energy practice. “If utilities don’t embrace it and play a role, they will have a slowly sinking business.”

Blockchain’s expected to be top of mind at this week’s Bloomberg New Energy Finance summit in New York this week, where hundreds in the industry will gather to discuss the future of energy. BNEF is estimating that $9 trillion will be spent on zero-carbon power generation through 2040 -- and Vrins sees the technology aiding those investments. Before the summit begins, here are a few early blockchain efforts to know about and how they may disrupt the utility model:

Managing the Grid

This year, Burlington, Vermont, may become the first municipal utility to use blockchain to get generation assets working together across its grid. The city will use the technology to manage supply and demand in real-time, according to Killian Tobin, chief executive officer of Omega Grid, the blockchain software provider that’s helping Burlington set up its system. Think batteries charging when there’s excess wind power, and businesses automatically drawing down power demand when electricity prices are high.

Efforts like this threaten to take command-and-control duties away from utility engineers and reduce the need for equipment upgrades that electric companies rely on for profits.

“We’re starting with a small utility and some micro-grids, but we want to deploy on an entire grid,” Tobin said.

No More Power Lines?

Germany’s Tennet TSO GmbH is working with batterymaker Sonnen GmbH and International Business Machines Corp. to form a virtual transmission line that uses blockchain to store excess power from wind farms in thousands of home batteries in the northern part of the country and unleash power pent up in the south.

Such efforts could eliminate the need for new power lines that utilities depend on for returns.

Trading With Your Neighbor

Trading is the focus of a lot of blockchain pilot projects. Lawrence Orsini, chief executive officer of LO3 Energy, is credited with facilitating the first peer-to-peer energy trade of solar power on a microgrid in Brooklyn, New York, in 2016. The same platform will also be used in Houston to help a group of businesses use their own resources to “micro-hedge” against swings in power prices instead of relying on a utility to do it for them.

Don’t Get Us Wrong

Blockchain could help utilities in some ways. Tokyo Electric Power Co. wants to win back consumers, reversing an almost 15 percent decline in its customer base since the Japanese government opened up the industry to retail competition. The country’s largest power provider formed a unit called Trende that will compete for customers with a solar and storage package and enable peer-to-peer power sales through blockchain.

Even Orsini cautioned that blockchain efforts are still in a testing phase and that the ultimate uses of the technology may differ from early experiments.

“This is not a revolution or a disruption,” he said. “It’s an evolution.”

— With assistance by Brian Eckhouse, and Dave Merrill

The Jouliette Created for Blockchain-based Energy Sharing Token

BY KELVIN ROSS, SENIOR EDITOR, POWER ENGINEERING INTERNATIONAL

A new blockchain-based energy-sharing token has been launched in The Netherlands. Named the "Jouliette," the new token aims to empower individuals and communities to easily manage and share locally produced renewable energy.

It has been developed by Amsterdam-headquartered smart energy company Spectral and Dutch distribution system operator Alliander.

The Jouliette—named after the Joule unit of measurement for energy—is the first such initiative of its kind in the Netherlands.

The project aims to become an example of how to harness the capabilities of blockchain technology to create greater social value and to support a bottom-up transition toward a more distributed, robust and transparent economy, underpinned by 100 percent renewable energy.

The Jouliette has been launched at De Ceuvel, an experimental innovation community in Amsterdam powered by renewables. The Jouliette token allows community members to make secure, peer-to-peer transactions directly between their own virtual currency "wallets."

Blockchain, the technology behind Bitcoin, ensures that these transactions are secure and decentralized, with the history of all transactions being shared with all the community members, so they can be automatically verified without needing the intervention of a "trusted" bank.

Spectral and Alliander said that this ecosystem at De Ceuvel is made possible because the site features a private renewable energy-based smart-grid. This enables community members to exchange renewable energy produced by their solar photovoltaic panels, without any restrictions, and therefore avoid existing market barriers.

The De Ceuvel community in Amsterdam

"With the Jouliette platform, the De Ceuvel community can easily manage their own micro-economy, and unlike purely speculative currencies, the Jouliette tokens are backed up by physical energy production," the companies said in a statement. "Beyond just enabling energy exchange, the community will explore further applications for the Jouliette, such as using it to trade for goods at the De Ceuvel Cafe, to facilitate a local time-banking system, and to integrate other intra-community services, such as a car-sharing program."

Besides the peer-to-peer blockchain trading system, the Jouliette platform also features a real-time power-flow map of the community, high-resolution data visualizations and machine-learning forecasting systems, which provide users with greater insights into their real-time energy use and projected production and consumption.

Spectral chief executive Philip Gladek said, "The Jouliette and its associated broader applications represents an important step forward toward realizing a local, circular, resource-based economy.

"We’re excited to launch it at De Ceuvel, which has become a globally visible showcase for sustainable urban development and a hub for cleantech innovation. In the coming months, the De Ceuvel community will be experimenting with the Jouliette in practice, and engaging in a number of user experience design sessions to take the platform to the next level, together with the system developers. We are looking forward to taking this idea forward and helping it scale up across the wider community and beyond to realize its full potential."

Pallas Agterberg, strategy director at Alliander, added, "In general, society looks at big solutions when it comes to the transition toward a renewable energy system, like underground CO2 storage and big offshore wind farms. That makes the energy transition intangible, expensive and out of reach for many people. We want a cost neutral acceleration in the renewable transition, and perhaps even one with a cost reduction.

"But then we need a decentralized model which facilitates greater local interaction and incentivizes direct peer to peer exchange of renewable energy. We look forward to exploring how concepts like the Jouliette can help lead the transition we need to see."

FUNDING FOR ELECTRON

Meanwhile, in the U.K., London-based energy tech company Electron has been awarded substantial funding from the government’s Energy Entrepreneurs Fund to prove how blockchain will transform the market for balancing the electricity grid.

The grant will enable the company to scale and integrate a blockchain trading platform that allows electricity consumers to be paid to adjust their energy consumption to balance supply and demand in a system.

Electron says the opportunity is sizeable. "It is a £1 billlion per annum market in the U.K. today, forecast to rise to around £5 billion by 2030 as the percentage of wind and solar capacity in the system rises," he said.

Electron’s application was supported by National Grid and Siemens— on market design and technical implementation respectively—who will continue to engage with Electron for the duration of the project.

Unlike traditional trading platforms that match buyers and sellers on a one-to-one basis, Electron says its platform leverages blockchain technology to allow multiple parties to co-ordinate and share the value of a single consumer’s action.

This will maximize the overall value and liquidity of the flexibility market and, at the same time, enable individual purchasers of flexibility to share costs. The company refers to this concept as "collaborative trading."

Electron’s chief executive, Paul Ellis, said that "blockchain is not just a technology. It is a revolutionary new way of transacting business without a central intermediary. Removing this intermediary enables new, better models of co-operation on an efficient, demonstrably fair platform."

Separately, Electron’s platform has also been awarded 2017 tech pioneer status by the World Economic Forum (WEF). This award is given to companies who are developing innovative solutions and are poised to have significant positive impact on business and society.

Fulvia Montressor, Head of WEF’s Tech Pioneer program said, "Electron’s pioneering use of blockchain tackles the energy usage challenge by increasing transparency and providing a framework for collaboration. Solutions like this are important tools to ensure energy needs are met while environmental impacts are minimized."

In April, the former chief executive of RWE npower, Paul Massara, joined the board of Electron.

Paul Massara, who is now chief executive of North Star Solar, joined Electron as a director. He said at the time, "I am really excited about joining the board and investing in Electron. It is clear that blockchain will disrupt many markets including the energy market and having scanned the market, it was clear that Electron will be a major player."

Electron says that it recognizes the potential for blockchain to transform the shared virtual infrastructure of the energy industry, and is taking a top down, collaborative approach to platform development by working with various key stakeholders across the energy industry.

January 15, 2018

Current blog posts and business journals contain active discussions on blockchain concepts, offering varied views about its impact and sustainability. These published pieces are creating confusion for business leaders due to an apparent lack of agreement on the impacts of the blockchain process and, more importantly, uncertainty about blockchain's complex association with bitcoin.

Many perplexed readers may be inclined to ignore blockchain concepts or defer consideration until clearer information and evidence are available. However, disregarding blockchain rather than actively understanding it could put an organization, including captive insurers, at a competitive disadvantage compared to others who move to embrace its full context. With or without blockchain, fundamental changes in business processes and value propositions are rapidly underway. Business paradigms are important frameworks, but operational processes and practices, along with enabling technology, are being implemented in quests for efficiencies and value creation.  

Business is often conducted through a series of activities or processes to acquire or modify an asset(s), forming a transaction network. These activities are performed by separate and distinct parties, entities, or departments. Blockchain is a methodology to document the financial value of the acquisition or modification activities associated with both tangible and intangible assets. The network participants consist of parties who have an economic stake in the transaction outcomes. This process can all be accomplished using a distributed or shared ledger, facilitated by technology and controlled by security protocols for authorized parties. Others, such as regulators, may be given visibility into the proceedings. Network participants approve the progress of the various steps in the execution of the transaction, forming chain-like documentation of the business activities from their beginning to completion or delivery. Through this process, blockchain ensures that the asset transaction is secure, timely, accurate, and auditable.1  

Bitcoin, on the other hand, is a cryptocurrency whose exchange and trade are conducted via a blockchain network, which is described above. It can be compared to cash and is used to complete buying/selling events or currency trading. Both buying/selling events and currency trading are currently being conducted without the benefit of some critical elements of monetary policy and regulatory oversight, generating significant market volatility in bitcoin value. Its freewheeling nature creates concern for many. In contrast, the technology-enabled blockchain processes are attracting significant interest for applications in business transactions within many industries and settings.

Blockchain was designed to enhance business transactions. It was developed as a process to address the need for an improved, efficient, cost-effective, trusted system for conducting and recording the financial and contractual aspects of business. In operational terms, these transactions are commonly called value streams. The centerpiece of the blockchain methodology is the recording of the financial or accounting impacts associated with the transfer of an asset and the value added to the asset as it moves through the acquisition or modification steps. As an asset moves through the business transaction, the aggregation of steps form a chain of custody and actions, completing the entire process.

Blockchain enables the building of trust among business participants as the asset moves through the transaction chain. Participants are typically given a view of where the asset is at any point. The blockchain process can reduce the cycle time, resulting in efficient and effective translation completion. With blockchain, the business transaction is also considered to be trusted because it provides the ability to audit the entire transaction from end to end. Network participants can rely on the integrity of the process, as each participant approves the completion of each chain link in the process.2

The business benefits of blockchain can be consolidated into three major categories: time savings, cost savings, and tighter security. Other benefits that can be derived from these include enhanced privacy, improved auditability, and increased operational efficiency.3

A focus on cost savings and increased operational efficiencies allows the benefits of and interest in blockchain to become clearer and better understood. At the Connecticut Captive Insurance Association Collaborative on October 26, 2017, keynote speaker Glenn Finch, vice president and cognitive innovation officer at IBM, discussed "process reimagination." This practice looks at fragmented business transactions (or value streams) to identify opportunities for improving business outcomes. Essentially, process reimagination examines both tangible and intangible assets through the lens of technology. It identifies opportunities to enhance the ability to manage (or move) an asset, add additional value, and make better decisions. Mr. Finch stated that, according to a recent survey, a significant number of responding chief financial officers (66 percent) have established key objectives for improving operational efficiency.4In this context, the growing interest in enhanced, economical outcomes associated with blockchain can be understood.

Certain business transactions lend themselves better to the benefits derived through using blockchain processes. Inspired industries appear to share some common attributes: a high degree of regulation, a reliance on cost estimates in completing asset transactions, and a dependency on value-added production in the delivery of products and services. Specific industries that come to mind include insurance, reinsurance, risk management, health care, retail, construction, and component aggregators (e.g., aerospace).

Interest in and the promise of blockchain are growing, and we will undoubtedly see its application in many settings. However, one key aspect that must be remembered is that blockchain exists at the intersection of process and technology—its full value lies with evolving processes that impact how business transactions are facilitated and conducted, in addition to determining how the value stream is measured as the assets move through the transaction process. Blockchain offers great potential benefits to prospective users if the elements of process improvement, capital management, and technology are all considered in structuring and adopting an enhanced business model. Blockchain will almost always enhance the value stream, but redesigning operational processes and organization around blockchain increases the value outcomes further.

At a December 2017 New York City Bar Association event, a panel discussed blockchain within the financial services sectors. Paul Meeusen, the head of distributed ledger technology at Swiss Re, Ltd., in Zurich, was quoted as saying, "If there is one industry where the time value of money is key, it's insurance." Mr. Meeusen went on to say, "… there's a lot of frictional costs lost across the [insurance] value chain."5

The insurance and reinsurance industries utilize complex business processes. A risk transfer process, for example, involves multiple parties or participants who assess risk, determine how much risk they will retain, assume that risk, and then transfer unretained risk to other parties or risk takers. The completion of these steps involves multiple transactions, complex accounting ledger entries, and extended time lines. The risk asset is valued in the form of risk premium calculations or estimates. Only a portion of the premium is allocated to the payment for contractual obligations associated with damages to an insured asset or damages to a third party.

A widely held consensus is that between 25 and 40 percent of risk premium charges or estimates are associated with expenses. These are frictional costs; therefore, as little as 60 percent of the risk premium may be associated with risk acceptance and available for paying potential claims. The complex process of risk transfer and acceptance is an example of a business transaction that may be improved through the adoption of enhanced business processes like blockchain. Process improvement may be seen in both efficiency (process cost) as well as improved precision in setting risk premiums.

At an annual EY insurance executive forum held in New York City in December 2017, several key trends were cited regarding the convergence of technology, business acumen, and risk management. The speakers and panelists noted that all segments of the insurance and reinsurance value chain are being reevaluated. Opportunities are being sought to enhance current business practices in order to improve efficiencies and execution and ultimately enhance operating returns for an industry that is considered "highly refined and remarkably well capitalized." All areas are under review, including distribution, underwriting, claims, and operations.6

How do this potential transformation and its expected benefits play out? As noted, transformation is occurring in many places, with a focus on various aspects of the insurance and reinsurance value chain. Perhaps one of the most interesting areas is the captive insurance arena. Captive insurance programs are complex insurance/reinsurance structures that apply additional key work steps for risk and asset management. They introduce more interfaces, handoffs, and accounting (ledger) entries into the value stream. With the observed frictional costs in these transactions, blockchain appears to be particularly well suited for bringing increased value, efficiency, security, and customer satisfaction. 

Leading risk consultants, captive managers, insurance brokers, and their clients are already at work applying the principles of blockchain to these programs. Expect to see interesting innovations that go well beyond distribution and accounting. Exciting opportunities are emerging as new transaction parties join the blockchain network. Existing roles and responsibilities may be redistributed or reassigned. What appears to be disruptive and painful on the surface may very well provide enhanced financial returns for captive insurance and risk management stakeholders. Interesting times lay ahead for those committed to process improvement and value creation. They stand to reap the benefits associated with these enhanced business practices, facilitated by technology.

May 8, 2018

         

Solar panels. Batteries. Emergency fossil fuel-fired generators. They’ve all been deployed across Puerto Rico to help get the lights back on in the months following devastating hurricanes Irma and Maria.

Now it’s blockchain’s turn.

Australian blockchain technology provider Power Ledger has its eyes set on the island, where power was wiped out by Irma and Maria last year. The company has hired Dante Disparte, a grid resiliency and security expert from Puerto Rico, to lead its efforts in the U.S. territory, said Jemma Green, co-founder and chair of the firm.

Power Ledger is working with factories and regulators to help companies on the island finance so-called microgrid resources such as solar panels and battery storage. It will then use its blockchain technology to allow the companies to trade power from those resources with one another, and to sell supplies to their employees or local communities. Through this exchange, people will be able to buy power in cash, cryptocurrency or — if a company wants it — labor.

Related: Inside Renewable Energy: Training and Recovery in Puerto Rico — Delivering Real Resilience with Solar Plus Storage

“The next hurricane season is but three weeks away and the grid is not reliable — that is part of the urgency,” said Disparte, who is also chief executive officer of advisory firm Risk Cooperative.

An Exodus

The goal is to stop an exodus of workers from the island and keep businesses from fleeing to the continental U.S. in search of more reliable power service. Disparte said he’s met with pharmaceutical and energy companies in Puerto Rico about the company’s plan. Some of their operations are in rural areas where distribution lines serving homes have remained down since the hurricanes struck.

Puerto Rico Electric Power Authority CEO Walter Higgins said in an interview last week that it’ll probably take another month or two to finish restoring electricity to the remaining 25,678 metered customers still without power following the storms. They represent 1.74 percent of the utility’s total customers.

Related: Inside Renewable Energy —The Business of Blockchain: Where Cryptotech Fits for Renewables Today and into the Future

Disparte said he isn’t interested in “just building back the old grid waiting for the next crisis and the next wave of financial constraints.” Later this year, Power Ledger’s cryptocurrency investors will be able to make investments in Puerto Rico energy assets using what are known as POWR tokens.

— With assistance by Rebecca Kern

Blockchain has transformed the finance world, providing a decentralised platform to connect parties in entirely new ways. It is now set to be the game-changer in the energy market, enabling the transactive energy landscape to become reality.
Frank Gielen, Education Director at InnoEnergy, examines its potential for reshaping the industry’s future

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Blockchain originally emerged in the financial services sector as a platform to support cryptocurrencies such as bitcoin.

As a distributed ledger, it eradicates the need for a central party, and holds the potential to power many additional use cases. Financial institutions are increasingly investing in blockchain solutions and research company Grand View predicts that the global blockchain technology market will reach $7.74 billion by 2024. 

A large portion of that value will undoubtedly come from applications beyond its financial services heritage – and energy is one sector primed to make waves. In particular, blockchain could underpin a new distributed electricity system, facilitating decentralised power generation and a network of prosumers, affiliates and multiple power flows.

Historically, the utilities companies have been the facilitator. However, blockchain eliminates any central authority and itself becomes the unifying party. Control then shifts to the consumers, enabling them to buy and sell energy between themselves directly, without the need for the traditional utilities role. Technology has always been a major barrier to this type of peer-to-peer transacting but, with blockchain, there is now the real possibility of numerous applications.

A survey of German industry executives identified over 110 potential use cases for blockchain in the energy sector. That said, the market remains in the very early stages of its deployment. Various companies have initiated private blockchain projects to enable peer-to-peer transactions but these fall short of providing a truly accessible and market-wide approach. So far, only one company has emerged with an open blockchain solution – and it looks set to play a pivotal role in transforming the sector.

The Energy Web Foundation is a non-profit foundation with the goal “to unleash the potential of blockchain in the energy sector.” Its aim is for energy market participants to jointly fund and develop a single open source blockchain platform for the energy sector.

It will be capable of handling volumes of transactions per second never seen before and facilitating near real-time responses as well as a wide range of energy use cases. Crucially, it facilitates a platform where all players are invited to develop an ecosystem of connected parties. Being open and free to use, it is the only blockchain so far to answer to the specific needs of the energy industry. A test network of the platform went public in November 2017, marking a crucial step beyond the theory and into practice.

Blockchain in practice

And it is through practice that companies will bring the many use cases to life. The first of these is the fundamental concept of peer-to-peer transacting between homes. PowerLedger, the Australian blockchain startup, has run a pilot project around this application in Western Australia

.

Applying a peer-to-peer architecture to the energy sector enables consumers to install PV panels in their house and then sell energy to other consumers. They are free to set the price, based on demand, or even offer it for free as a donation, for example, to friends and family.

In this new blockchain-powered world, the old concept of the energy consumer is obsolete and is replaced with prosumers, as both producers and consumers of energy. Also, one important proof point to emerge from the pilot is how this model leads to a much lower overall price for energy. Now, InnoEnergy reports on in a recent webinar, the challenge lies in scaling to full implementation.

Following on from exchanging energy between homes is the possibility of distributing it from homes to vehicles. As electric vehiclesgain in popularity, having the right charging infrastructure is vital. Blockchain will enable drivers to park their car at another party’s home or business charging point and then pay them directly for energy consumed from their smart meter.

Factoring in regulation

Aside from technology, a major question around blockchain’s adoption has been regulation. This has been the topic of extensive discussions, with the aim of ensuring energy production, distribution and usage is appropriately regulated throughout the new value chain.

Certain countries, such as Sweden, Austria and Germany have already taken a friendly stance towards its adoption. However, blockchain is essentially an internet so extends beyond the confines of physical borders. Therefore, as it takes hold, the priority will be to implement regulations on a more global scale.

Lower prices are one important advantage of peer-to-peer transacting. Another is the awareness it will bring to a wider population. Until now, consumers have not been involved in the intricacies of how the energy market works. They remained detached from how energy is generated, distributed and consumed. However, as prosumers, they have a vested interest. They can start to understand energy as a valued asset, like gold.

With greater awareness comes more considered behaviours – and perhaps this is where the real value of blockchain lies. As the industry champions efficiencies and the transition to renewables, blockchain could smooth the way as prosumers take a far more collaborative and involved approach. As a result, it will naturally encourage more efficient usage, greater cost savings and, ultimately, a smoother path to ‘new’ energy.  

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InnoEnergy partners with FutureLearn to offer insight around the hype on blockchain and its role in the energy sector, as well as courses on smart grids and solar energy. Its online course “blockchain in the Energy Sector” is available to join and will help participants understand how blockchain works, where the technology has come from and why it will empower energy customers like never before. To see a list of all InnoEnergy online courses, please click here.

Europe gets its first blockchain accelerator

   

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Chain Accelerator, a startup accelerator focused on the blockchain sector, has launched in France. This marks the establishment of the first blockchain accelerator in Europe. The accelerator is working with 30 people with technology and finance backgrounds, including Hyperloop Transportation Technologies' chairman, Bibop G.Gresta; SWIFT's former CEO, Leonard Schrank; and Ledger's president, Pascal Gauthier.

BI Intelligence

Chain Accelerator will offer startups help with initial coin offerings (ICOs), other funding methods, marketing and public relations, and business development, among other things, to make setting up their businesses easier.

Here is what this means for France and the blockchain industry:

It could help Paris become the ICO capital of Europe. The French Ministry for the Economy and Finance (Bercy) wants to create an innovative regulatory framework for ICOs to make Paris the most attractive financial center for the new fundraising method, according to Les Echos. Crypto companies are still dealing with many uncertainties in terms of regulations in different countries, so having both an accelerator ready and a regulatory framework could help the French capital achieve its goal of becoming the main European hub for ICOs.

The accelerator's high-profile collaborators should help it spur blockchain development. Having so many established names in the blockchain industry onboard this new accelerator is good news for blockchain startups. That's because their deep industry experience will make their advice more valuable for startups, which will likely increase the companies' chances of success. This will also probably lead to an increase in demand for the accelerator.

This might help France emerge as Europe's blockchain center. While the UK will arguably remain Europe's key fintech center, there is room for other countries emerging as specialized areas for particular technologies or fintech segments. The launch of Chain Accelerator and its efforts to create and ICO framework indicate that France may have found its niche in the competitive fintech industry.

As many countries remain uncertain about the new technology, it seems likely that a plethora of blockchain companies will seek out France to receive the help and support they need to launch their businesses. However, it will have to contend with Switzerland, which has been making a name for itself in the crypto space for some time.

Of the many technologies reshaping the world economy, distributed ledger technologies (DLTs) are among the most hyped. DLTs are most often associated with cryptocurrencies like Bitcoin, but such coverage sidelines the broader use cases of DLTs, even though they stand to make a far bigger impact on the broader the financial services (FS) industry.

DLT's value lies in its ability to centralize record-keeping, while cutting out the need for authorization by an overseeing party, instead allowing a record to be confirmed by multiple parties with access to the database. This means DLTs have the potential to streamline financial institutions' (FIs) operations, boost data security, improve customer relationships, and drastically cut costs. But many FIs have struggled to implement DLTs and reap the rewards, because of organizational obstacles, but also because of issues rooted in the technology itself. There are a few players working to make the technology more usable for FIs, and progress is now being made.

In a new report, Business Insider Intelligence takes a look at what DLTs are and why they hold so much promise for FS, the sectors in which DLTs are gaining the most traction and why, and the efforts underway to remove the obstacles preventing wider DLT adoption in finance. It also examines the few FIs close to unleashing their DLT projects, and how DLTs might transform the nature of FS if adoption truly takes off.

Here are some of the key takeaways from the report:

DLTs are proving attractive to FIs because of their ability to act as a single source of truth, distribute information securely, cut out middlemen, improve transaction times, and cut redundancy and costs.

DLTs like blockchain and smart contracts stand to save the FS industry up to $50 billion a year through improved operational efficiencies, reduced human error, and better regulatory compliance.

The technology is being explored actively across FS, with trade finance, insurance, and capital markets proving especially active. Overall adoption is still low because of organizational and technical hurdles, but these are now being eliminated, promising to boost implementation.

A few FIs have pulled ahead of the curve and are very close to taking their DLT projects live, if they haven't already. These players can serve as useful case studies for other institutions in getting their DLT solutions live.

In full, the report:

Looks at what DLTs are, and why the FS industry is working hard to make use of them.

Gives an overview of the financial segments which are seeing the most DLT activity, and what they stand to gain.

Outlines efforts being made to make DLT more approachable and usable for the FS industry.

Examines use cases in which FIs have managed to take their pilots live, and what they can teach their peers.

Greeneum revealed this month it is running test nets and pilots for its peer-to-peer energy trading platform “in Europe, Cyprus, Israel, Africa and the U.S.” It expects to have a viable product platform out by mid-2018.

UPDATE: GTM originally reported that Greeneum is being developed by the same team as SolarCoin, which is incorrect. On October 25, the SolarCoin Foundation issued a statement clarifying that Greeneum is a stand-alone project and that none of SolarCoin's founders "has a role or formal knowledge of the project specifics." Previous statements suggested otherwise.

Grid+

In one of the most hotly hyped launches in the energy blockchain world, Grid+ last month raised $29 million through its token pre-sale, which will fund the development and launch of its blockchain-based competitive retail provider in Texas. The hype was partly a result of Grid+’s origins: It was created by top New York blockchain shop ConsenSys.

UPDATE: Initial reports show that Grid+ raised $40 million through its token pre-sale. However, the firm said it actually raised $29 million from the pre-sale, which amounts to 36,422,909 GRID tokens. GTM has updated this story to reflect the correct dollar amount.

Grid+ acknowledged it made some errors in its pre-sale calculations, but they had no bearing on the total dollar amount raised. With the pre-sale complete, that leaves 53,577,091 GRID tokens for sale in Grid+'s public token sale taking place October 30.

Grid Singularity

Grid Singularity is an Austrian startup developing a blockchain purpose-built for the energy industry, backed by a team of experienced energy market professionals and leading blockchain and smart contract developers, according to its website (see also: Energy Web Foundation).

Electron

U.K. startup Electron began with a blockchain-based solution to help customers in the U.K. switch energy suppliers, but has since been communicating a vision of leveraging its platform to support broader energy trading and grid-balancing solutions. Last month, with help from Siemens and National Grid, it won U.K. government support to scale up its platform.

Energy Web Foundation

Established in February by Grid Singularity and the Rocky Mountain Institute, Energy Web Foundation is not so much a startup as an alliance body aimed at introducing an open-source blockchain designed for the electricity market, identifying use cases and helping build an ecosystem of participants. Big-name energy firms pumped $2.5 million into the foundation in May. 

ImpactPPA

While most energy-based blockchain players offer a token for trading, Manhattan Beach, California-based ImpactPPA has two: one to fund projects and one to consume energy. The company is targeting the estimated 16 percent of the world population that lacks a reliable source of energy.

How Blockchain Is Changing the Energy Industry

By Rakesh Sharma | Updated December 21, 2017 — 11:13 AM EST

Even as other industries are swept up in waves of disruption unleashed by technology, the energy industry has been slow to embrace change. But the introduction of blockchain promises to speed things up and radically transform the industry's processes and markets. As of this writing, there are two prominent use cases for blockchain in the energy industry.

The first one is in enabling a peer-to-peer energy trading model. The proliferation of Distributed Energy Grids (DERs) or independent renewable energy sources (such as solar panels) that connect to the grid has helped convert energy consumers into producers who are able to sell excess power back to the grid. (See also: The Current State of the Solar Industry). 

However, that process retains the existing dynamic of the electricity markets, centralizing the task of buying and selling energy under the control of the utilities. Bitcoin's decentralized network could disrupt that paradigm and enable customers to sell excess power to each other within a given area. Several startups and utilities around the world have already developed pilots or are considering projects to test this possibility. For example, Brooklyn Microgrid is developing an app that enables energy trading between consumers in a neighborhood within the borough. Similarly, Grid Singularity, a European startup, is focusing on the exchange of granular and private data between different parties within the energy market.

Even large energy firms are getting in on the action.  British Petroleum p.l.c. (BP

) and Austria's Wien Energy are among the firms that participated in an energy trading platform trial earlier this year. (See also: How Blockchain Is Helping to Change Government Services.)

Another common use case for blockchain within the energy industry is development of cryptocurrencies for monetary payments. Several utilities have already begun pilot projects to enable such transactions. For example, Marubeni Corporation (MARUY) accepts cryptocurrency payments in some regions of Japan. In certain scenarios, the utility of blockchains goes beyond payments. For example, Bankymoon, a South Africa-based blockchain startup, partnered with Usizo to enable cryptocurrency monetary payments for bitcoin-compatible smart meters located in remote areas.

But this is just the start. Blockchain could lead to further changes within the energy ecosystem. For example, a distributed ledger with several energy consumers and producers could lead to multiple rates within markets instead of the single utility-set rate that is currently prevalent. (See also: How Blockchain Is Changing Real Estate.)

Read more: How Blockchain Is Changing the Energy Industry | Investopedia https://www.investopedia.com/news/how-blockchain-changing-energy-industry/#ixzz5MyB0j8qF 
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