Climate change has become one of humanity’s greatest global challenges. At the same time, dependence on hydrocarbon energy sources such as coal, oil and natural gas remains high.
Supply lines around these energy sources are even more vulnerable to geopolitical tensions. Due to the current sanctions against Russia, experts now expect rising electricity prices and a negative impact on the energy market in Europe.
The Austrian government understands the urgent need for the energy transition and has set itself the ambitious goal of being climate neutral by 2040. Alternative solutions to fossil energy have been developed and are mostly not yet efficient enough on a large scale. . But there are promising approaches – especially in the form of distributed renewable energy or blockchain technology in peer-to-peer (P2P) energy trading.
There are already pilot projects in Austria dealing with P2P trading in the energy market. At the forefront are Blockchain scale-up Riddle&Code and Austria’s largest energy provider Wien Energie, which established a joint venture in 2020 called Riddle&Code Energy Solutions.
As of April 1 this year, Kai Siefert is the new head of the joint venture. He was previously an IT analyst at Wien Energie and worked on the MyPower energy signaling system in Vienna. Cointelegraph on Deutsch caught up with Siefert to ask how we can fight the energy crisis with the help of blockchain.
From pilot project to solar marking
Wien Energie and Riddle&Code have been working together for a long time. Back in 2017, the companies launched the first project called Peer2Peer in the Quartier where they identified solar photovoltaic systems so that consumers can participate in energy production.
Later, at the end of 2018, when Siefert was still an IT specialist at Wien Energie, his team developed a blockchain strategy together with Astrid Schober, Head of IT at Wien Energie, focusing on the topic of energy tokenization with security tokens and utility tokens.
This led to the MyPower platform. First, Wien Energy and Riddle&Code tested decentralized trading of self-generated solar energy via blockchain in a smart city project with 100 participants. Everything went smoothly, and in 2021, an authentication platform for solar power plants was launched. Representing the largest solar power plant in Austria, Riddle&Code acquired 1,000 customers who, as part of their advertising campaign, purchased energy coupons issued by Wien Energie in the form of tokens, which could be used to pay electricity bills.
Now MyPower represents solar power assets throughout Austria, allowing consumers to benefit from part ownership and invest in renewable energy sources.
The demand for renewable energy is huge
According to Siefert, the concept of energy sharing is very much in demand at the moment. Due to the Russian invasion of Ukraine and the coronavirus crisis, electricity prices are skyrocketing. Rising energy prices can be mitigated by cheaper renewable energy, smart IT and energy sharing.
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With blockchain-based energy sharing, collectively produced electricity is fed into the grid, distributed and sold directly to homes – all without intermediaries. Kilowatt-hours that are not consumed can also be sold to other energy communities and thus consumers earn or save money.
Energy sharing can enable direct energy trading between energy consumers (energy producers and end users) who can use this approach to control their production and demand. People who rent rather than own their homes can actively participate in the energy exchange and benefit from the proceeds. This makes consumers more involved in their own generation and puts local value creation at the center.
“You don’t need to buy natural gas from Russia or oil from Saudi Arabia to generate energy here in Europe,” Siefert said. “The sun comes almost for free and produces electricity reliably. But many cannot participate because they do not own their own house, but live in a rented apartment or simply cannot afford to buy a large solar system. However, we can split these plants into small digital asset tokens so that private investors with small capital can also participate.
Renewable energy ‘coming into focus’
Austria already has small renewable energy communities such as Erneuerbare-Energie-Gemeinschaften (EEG). Such energy communities (in Austria and under the law on the expansion of renewable energy) are non-profit legal entities intended to spread the production, distribution and consumption of renewable energy, mainly for the benefit of the public. Such EEGs still play a small role in the production, local and regional distribution and consumption of renewable energy and are often not very profitable.
However, things are starting to develop. According to Siefert, demand for EEGs has already increased dramatically due to rising energy prices, and Riddle&Code Energy Solutions offers technology solutions to install and deploy such EEGs. “We can also connect them to decentralized marketplaces with our system,” Siefert said. This is already possible with the Renewable Energy Expansion Act, which has been in force since 2021 and is a European Union directive that has been implemented into national law.
Siefert pointed to “increasing interest in interesting renewable energy” – in Austria, Europe and around the world. Companies working in the field of renewable energy “are now in the spotlight” as they benefit from the “large investments that climate policy around the world is embracing,” Siefert said.
Real-time data signed and encrypted on the blockchain
Currently, P2P energy trading is not yet allowed in Austria. Everything works on the basis of the current infrastructure of the electricity market, and billing data is made available by networks 24 hours after it has been measured.
But Riddle&Code Energy Solutions can already capture this data in real time. A dongle that can be connected directly to the smart meter reads data directly from the customer interface and sends it through a trusted gateway – signed and fully encrypted on the blockchain. From there you can read this data immediately. Customers can see every hour how their credit grows in kilowatt-hour tokens.
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This data can’t be used for billing yet, but it helps encourage the right consumption behavior. Thanks to such data, the customer can see how much green energy he has on the electricity grid from the community and, for example, use this time to turn on the washing machine or charge an electric car. This, in turn, has an indirect effect on the bill because customers pay less if they use more electricity from their own shared forms.
“Our goal is for everyone to be able to participate in energy sharing,” said Siefert. “But private P2P trading is currently not possible in Austria until a legal regulation is established.” That is why I would like to see more freedom here from the government and more speed in the expansion of renewable energy sources. Austria can become one of the leading nations in the EU and worldwide in terms of P2P energy trading and the development of energy communities.
This is a short version of the interview with Kai Siefert. You can find the full version here (in German).
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