Energy procurement and trading platform WePower has announced that it has successfully delivered a nationwide pilot for the energy data tokenization of Estonia’s electrical grid in partnership with the Estonian transmission system operator Elering.
According to the announcement, WePower and Elering have tokenized a year’s worth of Estonian energy consumption and production onto the Ethereum blockchain, in order to facilitate a more transparent energy trading process. WePower says the initiative has been a part of groundbreaking collaboration between the two organizations.
Estonia Energy Data Tokenization
Estonia provided the ideal infrastructure for this type of pilot as the country has a well developed energy system which includes an extensive smart meter coverage and a data sharing platform called Estfeed that allows consumers to anonymously download their data and share it with companies and other consumers. The energy data tokenization pilot resulted in 26,000 hours, and 24 terawatt-hours of aggregated energy production and consumption data uploaded to the blockchain, and turned this huge dataset into 39 billion smart energy tokens.
WePower energy tokens are essentially digital self-setting power purchase contracts, with each representing one kilowatt-hour of power produced. They are currently available for trading and can also be sold into the local energy wholesale market.
Faster Energy Transition
WePower says that current energy financial and legal instruments used to facilitate energy transactions, such as power purchase agreements (PPAs) are too complex and too expensive. But with its innovative renewable energy procurement and trading platform, it is now possible to reduce the processing times for such projects from more than a year to just minutes. This would enable a faster energy trading due to a broader base of participants now entering the peer-to-peer energy trading market. The company also highlighted the magnitude of its achievement stating that the platform will enable consumers to purchase green energy directly from producers through PPAs. On the other hand, it would allow clean energy producers to raise capital by selling future energy production upfront at a low cost, and for offtakers to turn to green energy through PPAs.
Kaspar Karleep, CTO of WePower, said:
“Projects of this scale and ambition haven’t been attempted before, in part because of the complexity involved but also because energy data is highly sensitive. Blockchain is the ideal enabler because its foundational principle is trust […]. The project will deepen our understanding of blockchain as a means to share data, paving the way for much-needed innovation in the energy industry.”
WePower used the Ethereum blockchain for the pilot considering that its maturity provides sufficient stability for multi-year term energy contracts. However, the company had to deal with technical hurdles associated with the Ethereum network such as scaling issues and difficulties connecting centralized data systems to the blockchain. For instance, WePower was forced to delay the processing of transactions during peak times to prevent having to pay high transaction fees to Ethereum. WePower also acknowledges that while Ethereum and similar blockchains can operate at competitive costs at the current scale, other “hybrid solutions” have to be identified to process large-scale data sets.
In order to ensure anonymity of private individuals and in line with the GDPR law, WePower explained that the data provided by Elering are aggregated into groups determined by zip codes, rendering it impossible to obtain individual data.
This trial is a big win for WePower, notably because of what it has achieved with blockchain and also for its efforts towards driving innovation and progress in the energy sector.