Contact

Block is ticking…

As fits the new year, today we’re looking toward the future – more specifically, toward one of the ‘game changers’ that could deeply change the energy world.  When it comes down to blockchains, the question most frequently asked is, ‘What is a blockchain?’

In fact, the whole world has heard of it: this is the disruptive technology behind Bitcoin. Since this most recent application of the blockchain has become so extensive that cryptocurrencies are now one of the most closely-monitored indexes for stock markets, blockchain technology could have at least as significant an impact on every aspect of the energy world, too.

The primary application of blockchains is financial disintermediation, and removing intermediaries between two actors can apply to numerous other sectors. Let’s decrypt a few potential areas for application of this technology dedicated for securing transactions.

A blockchain is a technology for storing and transmitting information without a supervising body. In a sense, it’s a distributed database that replicates the history of exchanges (of energy, for example) in each node making up the network. After an automated validation process, the exchanges are certified, encrypted and added to the blockchain.

A blockchain is therefore, in the words of wikipedia.fr, a secure, distributed register of all transactions carried out since the creation of the distributed system.

Image credit: Ferréol GODEBARGE, ROSSAT Romain, Engie

One example, amongst others: By using meters as nodes in the network, blockchain technology would allow the implementation of several virtual networks on the public electricity network. Tests are already underway, in the field of research of course, but also operationally, with a number of start-ups all over the world (LO3 Energy, Consensus Systems and Drift in the US, Power Ledger in New Zealand, WePower in Estonia, Evolution Energie, Ponton and SunChain in France, etc.), which are sparking the interest of large groups in the sector (Edf, Engie, Vattenfall, E.On and RWE). In China, too, the blockchain is developing in the shadows of the solar industry.

A revolution that could bring value to energy production and distribution…

The real change for the energy world is the smart grid, made possible in particular with ‘remote’ self-consumption, allowing energy to be consumed at a different location from the site where it has been produced. A concept anticipated by the order of July 2016, which defined collective self-consumption. Self-consumption can therefore be shared over several remote sites, or even used remotely by electric vehicles through smart charging stations.

What’s more, via the Internet of Things and connected smart meters, blockchain technology allows us to contemplate the automation of measurements, maintenance, invoicing, archiving of quantities produced and consumed, documentation of the status of production facilities and keeping of registers of certificates of authenticity for green electricity or CO2 quota certificates, among other things.

But an upheaval of commercial exchanges, too

Energy trading and brokerage could also experience significant changes due to blockchains. In time, there will be automated control of decentralised energy systems via the ‘smart contracts’ enabled by blockchain technology – this new contractual intermediation mode, which will clearly entail changes to regulation, is already in the works in Canada with the launch of Blockchain Power Trust, with others following in its footsteps.

Hence, in the world of energy, this area will without any doubt be the first to see major advances as a result of this technology. The ability to build complex products that aren’t standardised, transactions involving multiple buyers and sellers, transparency in exchanges – all of them advances which would improve market liquidity and rebalance exchanges between producers and consumers. By allowing for secure connections among a large number of players and their data, the blockchain should eventually redefine energy brokerage, bringing it to infinity and beyond.

With a few obstacles

There is one downside, however: depending on the commodities, the blockchain may be the means of introducing more complexity and, eventually, less clarity in transactions. The simplicity with which new players can enter the market was already the instrument of the largest VAT merry-go-round in 2006, which involved CO2 quota fraud…

Since it could make it possible to eliminate centralised actors coordinating the exchanges, blockchain technology relies on confidence in the distributed control system and poses obvious questions regarding governance and sovereignty.

And to bring on this blockchain revolution, we must first resolve a problem that has already been controversial for its current application: Bitcoin. And the challenge is a big one, because Bitcoin, paradoxically, needs energy almost as much as energy needs it. But what is this energy used for? Here we need a bit of calculation.

Energy is the key to the security of this technology: a blockchain is like a distributed database shared by all nodes in a network (computers or servers). The transactions are grouped into blocks there, and the blocks are added to the ‘database’ by linking them to each other like a chain. When a node submits a new transaction, and prior to being added to the chain, it must be verified that this new block is compatible with the whole of the pre-existing chain: this is known as ‘mining’

Image credit: FollowMyVote

This verification of the chain’s integrity and the management of errors effectively require a massive computing capacity, provided by mining nodes, nodes capable of distributed (and remunerated) calculation. In 2017, the mining of the Ethereum virtual currency consumed as much energy as a country the size of Cyprus, and Bitcoin (essentially located in China) requires more than 29 TWh, equal to three nuclear power plants! Such a system is therefore inadequate for energy micro-transactions when the energy cost of processing the transaction using blockchains becomes greater than the quantity of energy being exchanged. Blockchains devoted to energy must therefore commit to consuming as little  power as possible.

Jean Charles Bissié

Our lastest publications

As fits the new year, today we're looking toward the future – more specifically, toward one of the ‘game changers’ that could deeply change the energy world.

Suscribe to our Newsletter

Each month, one of our experts publishes an article describing his view on a specific topic of the constant changes taking place in the energy market, with special focus on the French market.

Biography

Diego is a Consultant at Haya Energy Solutions. He has 1 year of experience specializing in developing models for energy price forecasting, energy availability and production, and battery optimization.

Diego obtained a bachelor’s in Science in Political Economy from the King’s College London, and later a dual Master’s in Management and Computer Science from the IE University of Madrid.

Diego Marroquín

Consultant

Haya Energy-6
Contact us

Biography

Céline is the Head of Business Development and Administration at Haya Energy Solutions. She plays a key role in driving the company’s growth by expanding its market presence, strengthening brand positioning at the European level and implementing strategic initiatives. She also manages the company’s administrative operations, ensuring efficient financial management, including accounting and budget oversight.

She is also a Consultant at Haya Energy Solutions, specialising in the optimisation of energy procurement through the analysis of market trends and regulatory developments. She also provides strategic guidance to identify opportunities and tailor solutions to the specific needs of each client.

Céline holds a degree in Philology from the Sorbonne University and holds a master’s in Project Management and Cultural Tourism from the University of Clermont-Ferrand.

Céline Haya Sauvage

Head of Business Development and Administration

Céline Sauvage
Contact us

Investment Advice

  • Definition of investment strategy
  • Technical advice on investments
  • Investment assessment (CAPEX, DCF, profitability)

“Decarbonization of the Energy and Transport sectors is arguably today’s main economic driver for the industry.”

Biography

His career started in civil engineering as a Project Manager in France, Martinique and Australia. Afterwards, he became the General Manager of a subsidiary in Venezuela. In 1992, he established Dalkia in Germany (district heating, cogeneration, and partnerships) and represented Véolia in Thailand. In 2000, he opened the commercial office of Endesa in France to take advantage of the liberalized retail market. From 2006, as a development Manager at Endesa France, he led Endesa’s plan for Combined Cycle generation in France and developed the wind and PV portfolio of Snet at the same time. 

Philippe worked for 3 years at E.ON’s headquarters coordinating the company´s activities in France. He was strongly involved in the French hydro concession renewal project. As a Senior Vice President – Project Director at Solvay Energy Services from April 2012 to February 2014 he was in charge of the H2/Power to gas and European direct market access deployment projects. Philippe has been an HES expert since 2014.

Philippe holds engineering degrees both from the Ecole Polytechnique and the Ecole Nationale des Ponts & Chaussées (France) and has a combined experience of more than 25 years in energy and infrastructure. In addition to English, Mr. Boulanger is fluent in French, German & Spanish.

Philippe Boulanger

Electricity Expert

HES-Philippe-Boulanger
Contact us

“The world is changing. New investors pay particular attention to the energy sector while historical actors adapt their position to the market.”

Biography

Antonio is the founder and President of Haya Energy Solutions, a specialized consulting firm focused on the energy sector, which has developed M&A projects in renewable and conventional power generation, cogeneration, district heating, gas and power retail, energy procurement and power optimization in France, Spain, Portugal, Germany and UK.

Prior to this, Antonio was CEO of KKR’s CELEST Power in France (2x410MW CCGT). He was also CEO of Endesa France and General Secretary, Strategy & Corporate Development Director at E.ON France. Formerly, he held different positions at Endesa, including Responsible for M&A at Endesa Europe and Regulation Specialist at Endesa Distribution.

Antonio holds an MBA from the University of Deusto and a degree in Industrial Engineering from the Higher Technical School of Engineering of the University of Seville.

Antonio Haya

President

HES_Antonio_Haya
Contact us