How blockchain is changing energy | The Energy Podcast
Hello and welcome to the Energy Podcast. I'm Julia Streets, your host. And today we're examining the power of blockchain technology and where it's making a real difference in the real world. Now, when we talk about blockchain, many people think about cryptocurrencies. But I want you to put that out of your minds, because today we are thinking about this technology as a means to changing the relationship between how energy is produced and how it is consumed.
And often it's also known as distributed ledger technology. Now, some claim it offers great potential in ways in which organisations collaborate, interact, even accelerate the development of low carbon energy. But in order to be successful, adoption needs to be widespread. Now, long term listeners to this podcast will know that we talked about blockchain back in 2019. What about this question whether blockchain is more hype or hope? Blockchain technology is still very new. We don’t know what it can do. But since then, things have moved on at quite a pace.
We focused on a real cutting edge blockchain web3 innovations that have the ability to scale globally. We're not per se looking for solutions for blockchain that can just be implemented in one small location. We're looking for real global solutions that can help us scale and achieve real global change. I got a text yesterday that said: Please do not use electricity from 4 to 9 p.m. because the grid is going to get overloaded.
Even though I have solar panels on my roof, a smart inverter, an electric vehicle and a charging station, all of which could be used to help balance the grid. So that's the problem we're solving. We're focused on actually giving digital identities to every single one of these assets that can actually be networked together with other similar assets and used to balance the grid as we continue to decarbonise. We have private householders, private customers, we have companies in it, we have government institutions in it, and totally different business interests and bringing everything together. We believe that this decentralised infrastructure is the only way of dealing with that complexity.
So I hope you are as intrigued as I am, partly because I'm an entrepreneur advising financial services and technology companies around the world, partly because I'm a podcast host and an industry event host. So I really want to dig in not only to what's new and what matters, but particularly because if the world is to meet these climate change goals, they have deadlines and they have ambitions. Today on the energy podcast: How Blockchain is Changing Energy. So welcome to our three guests today.
Our first guest is Sophia Rödiger. She is the founder and CEO of bloXmove, the decentralised ledger for power and mobility. So Sophia, welcome to the show. Yeah, welcome. It's a pleasure to be here, Julia. I can't wait to get into the discussion and allow me to introduce our second guest, Jesse Morris. Jesse is the CEO of Energy Web, where he works with global energy companies, electric utilities and clean tech companies to build new products and services to accelerate energy transition.
So, Jesse, welcome to the show. Thank you so much for having me here. I'm looking forward to the conversation. And our third guest is Sabine Brink.
Sabine is a blockchain lead at Shell, where she and her team are exploring blockchain's potential right the way across the organisation and the energy sector as a whole. So, Sabine, welcome to the show. Thank you so much, Julia.
Thank you for that introduction and really excited to talk here today. Well, so, listen, I'm going to set you the challenge at the very start. I would love you just as a level setter for all of our listeners. If you could just explain, please, what you mean by blockchain and distributed ledger technology, and then we can take the discussion from there.
Perfect. There are so many definitions out there, but I'm going to give it a shot. When we talk about blockchain and distributed ledger technology, I think there's one key definition that I've sort of held to over the last couple of years say unchangeable, tamper proof, shared digital ledger of state changes of a digital asset. That's quite a lot. But in essence, what we're really talking about is that it's shared across industries, individuals and allows a low barrier of participation, and it moves from centralised models to decentralised models. And I think just one more element, because we can see this just as a technical definition of just another technology.
But I think what's even more important to understand is that blockchain is part of a bigger revolution that is currently ongoing and a lot of people might have heard about it. Some people might not have heard about it yet, but this is the whole web3 revolution that is ongoing and to me that is also partly very important to understand as the overall story of blockchain, because we're moving from web2 to web3, which basically means we're creating more user owned, more participatory and more community based platforms, and of which blockchain is one of the technologies enabling this. That's enormously helpful. Thank you for the kind of starting things of with such a clear definition and also painting a picture of why this matters. I was saying in my introduction that we need to change at pace, we need to change at scale. We've got some very clear, and I say we of course, I mean society at large.
We've got some very, very clear ambitions and goals we need to hit. Jesse, can I bring you in? First of all, why do you see blockchain really empowering change? And I'd love to get your thoughts about the pace point of view. So we started Energy Web, but all focused on that pace problem.
From my perspective, myself and colleagues that were working for another climate nonprofit, we said these utilities, these energy market participants are not moving fast enough to address climate change. And one of the reasons they weren't moving fast enough is because they did not have the digital tools required by the energy transition. And what I mean by that is the energy system is changing underneath our feet. We're moving to a system in which instead of several dozen or several hundred power plants, for example, in one area, are balancing the grid, eventually, billions of small assets, including the assets that Sophia works a lot with, with electric vehicles, right? Those assets are going to become the basis of the electric grid. And those assets, they're owned by many different businesses, many different people. If we're going to move to a system in which all of these different assets in all of these different industries that are currently very carbon intense are going to be coordinating and basically helping to support the energy system.
How do you do that using existing kind of technology suite? This is where the Web3 technologies that Sabine was mentioning really come in handy. For us, Web3 technology is a new way to enable different enterprises and businesses to exchange data. A lot of people will define Web3 as: Oh, it's NFT’s, oh, it's the metaverse. Oh it's blockchain.
Well, yes, but for us, it's really about giving real businesses a incredibly secure, low cost way to exchange data in support of this pace problem in support of helping companies move to a world in which billions of different assets owned by different parties are contributing to a low carbon economy. Instead of the system that we currently have. Well, this is probably a beautiful moment to bring in Sophia though. I mean Jesse was talking about, about you and your role particularly around electric and then, of course, the decentralisation of power sources as well.
And I think from your point of view is, you know, when we think scale, you're working at huge scale. Talk to us about the role of blockchain and really changing the game. Absolutely. I mean, first of all, Jesse, you perfectly framed it. How many actors are in that game at the end? Right.
And you mentioned that we focus on the e-mobility. So the e-car side, but also not only e-car and owning a car, also the multi-mode mobility journeys where many of transport operators are acting in that. So we have private householders, private customers, we have companies in it, we have government institutions in it and totally different business interests and bringing everything together. I mean, you mentioned earlier, Julia, partnering, we believe that this decentralised infrastructure is the only way of dealing with that complexity and not only the complexity in it.
Both sectors, so mobility as well as energy are highly regulated fields, sectors with high standards of security and also transparency and also here we see that blockchain technology can deal with that, right? On the one hand, transparency, but also when it comes to tracking and trading. And it’s super interesting what we can see right now here, and some people say that especially the entire market of green miles, for example, when it comes to e-mobility, but also carbon credits are the financial market of the next year. Yeah, there are trillions in it. So now you can see the pressure, the interest in that because money is in that.
It's also double interest. Right. So this is how we see right now the development and also the potential in the technology. And Sabine, you were talking in your sort of level sector about what is blockchain about being the unchangeable ledger, many you refer to as an immutable ledger of truth. Trust comes through so loudly, clearly that listening to what Jesse was saying, listening to Sophia's point of view as well, I would love to get your thoughts on where do you think the perhaps hidden opportunities that blockchain offer today in terms of achieving the decentralised ambition and also the web3 potential? Yeah, absolutely. When we are talking about the impact blockchain can have today in the energy sector, I think there is already so much happening which makes it really exciting. I think when we look at blockchain as a whole, people often refer to it immediately as, you know, in the financial sector or in banking, etcetera, where it has had the biggest impact.
And people still today might not think of the energy sector immediately when they think of blockchain and web3. I think it's really time to change that because there is so much happening, especially what to me personally is so exciting is that we are going through that huge transformation in the energy sector. We have so much urgency to re-architect the way that energy is produced, the way that it is distributed, and the way that it's consumed. And where I believe that digital technologies, many different ones, but especially blockchain can help, is how this is going through a complete transformation.
The energy sector is decentralising, becoming more distributed, and the blockchain provides a shared level infrastructure to coordinate and exchange data in a decentralised way. Now, the immediate key feature, what you're talking about, Julia, is trust. And when we talk about blockchains, we normally also talk about trustlessness in that area, because instead of needing to trust central entities or companies about their claims, we can actually, through blockchain, verify where data comes from, verify transactions in the public domain. And I think when we're all moving together to or need to move together to a net zero economy and world, that level of trust and transparency and of data integrity are going to be key foundations for us to be successful in all of this. So to me, their immense opportunity that's already offered today by blockchain in areas like carbon markets or in traceability of electricity or hydrogen coming through, that's where I think at the moment already blockchain and Web3 makes such a great difference. And as we mentioned before, they're highly regulated markets.
So of course the auditability and the traceability and the kind of the registration of that data is incredibly important. Jesse, I have a feeling you were keen to come in here. I think what Sabine just described is such a stark note about this transition from the Web2 world to the Web3 world. So it's worth thinking about for many of the applications that Sophia and Sabine and myself are mentioning, what would the Web2 version of these look like? What it would look like is, pick an industry underneath this broad umbrella of the energy transition. So Sabine mentioned hydrogen. We were talking about mobility. I was talking about the grid. Let's look at sustainable aviation fuel. Right?
Shell just did an amazing project on sustainable aviation fuel that, Sabine, you should definitely talk about. In any of those industries the Web2 model would be a large technology company, that comes in and says: Hello, all of you companies pay me for the privilege of putting your data into a centralised repository, and you all are going to trust me. I'm being a bit tongue in cheek, but really that's the web2 model. Large technology companies come in, they have a software as a service based business model or some sort of a license based business model. Data goes into a centrally managed and controlled repository, and then that becomes the “source of truth” for whatever is happening in those different business processes.
That architecture has so many problems. And as Sabine said, moving towards a Web3 based architecture where the data and the permissions about who can see what pieces of that data live in a protocol itself, instead of in some sort of a central database that only one party controls. That's the big innovation I think that Web3 technology can bring to enterprise.
And Sophia, I'm sure you've got some thoughts on that. Yeah, now when I want to link it to mobility, because it is often easy to grab for people, right? Mobility. I use that each and every day on the road.
What we see right now is the trend of big dragons, of aggregation platforms. Some call them super apps, right? You have Free Now in Europe. Uber's very strong in America, but you have one large company, they own the customer, they own the data, they set the rules and the ecosystem means of maybe we need a higher handling fee or I don't know, whatever fee. Then they increase that, right? So they set the rules in the ecosystem, the transport operators, I talked about them earlier like scooter companies, bus/train, they lose in that entire scenario, right? And now think web3 where each and every player is often we call it a bit more on eye level and it interact in a direct way, automated way and set their own routes in the ecosystem was a kind of alliance for example, right? And this exactly linked to the mobility, a new scenario, if you compare it Web2 to Web3. And of course we get down to the fundaments of blockchain and where I know those who love blockchain often talk about, you know, it's a kind of the cost savings, the energy efficiencies and the operating efficiencies and also the ability to drive some standardisation and the ability to put kind of control or move control away from centralised to decentralised models, which is which is fantastic. I wonder if we could get into what you're doing to just just bring this to life a little more for the listeners.
Sophia, can I start with you? For sure, when I speak about the mobility and our blocks, move side, blocks move power stream, so to say, is linked to the urban mobility area. So what we create here is really, what I talked about, multi-model mobility journeys and we explained already what is a change when it comes to to more super app Web2 base model towards a more alliance. All transport operators are connected in the back end model, right? The Web3 model. And that's exactly what we change here. What will change for the end customer is that whatever app you want to use could be a local train app, could be my local scooter app. You can use it.
And if I visit you for example in UK, I have definitely not the right app, but now I can use my local one and roam through the UK mobility, right? Because in the back end all the transport operators are connected where that node network structure, that's a new way of mobility roaming as we often call it because we know it or we know very similar concept from data roaming. And this, for example, something we have live in the first test area in eastern Germany, for example, was 7000 students, three operators, so a train company, a scooter company and a bike company and we see that this is really working. That we can make mobility of blockchain based mobility tangible. So power story where for example also you, Jesse, and our team are working together is more related to, as you said that earlier, when we bring in the car to the energy grid or to the entire ecosystem of energy, in the future we need more storage capacity when it comes to renewable energies, right, with the sun, wind and solar panels stuff, we more storage capacity.
And the battery in the car is very important when it comes to rolling storage. And this is exactly why we believe we have to link costs to the energy grid or to buildings or even private households. There's something that we work together because we bring in a lot of knowhow from the mobility side, but also when it comes to financial transactions, right? Because in the back end, there are tons of millions of financial transactions, that is what we are doing. Wonderful.
And Jesse, can I turn to you for your thoughts on particular projects you are working on at the moment? You opened your remarks talking about sort of pace. I'd love to hear what you're doing right now to enable that. We have to use cases if you look around the world that we focus on, the first one, it's really just about traceability. So if you're an electric vehicle and you charge somewhere, can we help individuals, drivers, fleet owners and different market participants prove that that car, for example, was charged using renewables. And we apply that thinking to hydrogen, aviation fuel, all of these different supply chains that you need to understand where those goods are coming from. The second use case is about the grid, and it's exactly what Sophia was just mentioning.
So I'll just use myself as an example for the way the world works today. I'm sitting here in California, the most “advanced” electricity market in the U.S. I got a text yesterday that said: Please do not use electricity from 4 to 9 p.m. because the grid is going to get overloaded. Now that, even though I have solar panels on my roof, a smart inverter, an electric vehicle and a charging station, all of which could be used to help balance the grid instead of them texting me and just saying, please don't use electricity.
Oh, and by the way, we're not going to pay you. So that's the problem we're solving. We're focused on actually giving digital identities to every single one of these assets that can actually be networked together with other similar assets and used to balance the grid as we continue to decarbonise. We're doing this in many geographies around the world, but we're most advanced in Germany, Belgium and then Australia.
Amazing. And Sabine, can I ask you a similar question in terms of things you're focused on that sort of builds on and look the whole point about digital identity is really so heart and center to where the power of blockchain comes in. What are you working on? Yeah, excited to share, of course. And the use cases are in the baseline, very similar to what Sophia and Jesse have mentioned around really that decentralised identity, the traceability of energy and also across different ecosystems, right? The energy touches almost every single industry and collaboratively we all need to decarbonise.
And I think with that we see blockchain as being a technology that helps us connect enterprises, consumers and different players in the energy market to all collaborate and reduce net carbon emissions. At the end of the day, in a transparent and accountable way, where we're focused on as a blockchain team, you know, real cutting edge blockchain web3 innovations that have the ability to scale globally. We're not, per se looking for solutions for blockchain that can just be implemented in one small location at one certain place, right? We're looking for real global solutions that can help us scale and achieve real global change, which is what we are driven to do. So one of the projects that we are, have just launched, this is a platform called Avelia and Avelia is a solution that we've developed together with a whole lot of different partners in the aviation industry, including the likes of Accenture, AmEx GBT and of Energy Web Foundation. And together with all of these partners, we set out with the mission to help decarbonise the aviation sector and we need it to solve an industry problem for aviation, because this is a sector that is hard to decarbonise.
We can't switch to electrification overnight for aviation that is happening today. And at the same time, we need to transition to lower carbon fuels and sustainable aviation fuel is a solution ready today that can be adopted by airlines to reduce that those emissions. The one problem is that there is not a lot of availability of sustainable aviation fuel at an affordable price. So it's hard to create that market and for airlines to buy it and consumers to use it.
So what Avelia, the launch of this platform, has set out to achieve is to connect airlines and businesses from all over the world and allowing them to, in a trustworthy and more transparent way, share the environmental benefits of sustainable aviation fuel. And as a collective, really, as an ecosystem, help to reduce the emissions of the aviation sector. So blockchain underpins this as an architecture. What this really does, it provides the clear and transparent tracking mechanism of these environmental attributes of sustainable aviation fuel that are driven from production through the aviation fueling network. So at the end of the day, let’s say large corporate flyers and also airlines can, in a credible way, use these sustainable aviation attributes towards their sustainability goals. And with the use of this blockchain, we can really make sure that we are able to prevent any double counting of sustainable aviation fuel in the system as a whole.
So for this, this is an industry first, we're doing this as a launch to really test, you know, how our customers are receiving this. What is the uptake in the industry? We're working with a lot of industry partners and we believe that hopefully this will have an impact on other industries and other energy products. And we were talking in the beginning about the importance of the industry having to come together and collaborate and how essential that is. And it's wonderful to have a use case where actually there are so many parties involved in that.
Absolutely. Yeah. It's absolutely key to bring loads of different partners with different perspectives, right? To change the way that the industry operates and this cannot be done by one single partner in isolation to change a whole aviation sector. It's really about bringing together partners from consumers, from auditors, regulators and tech providers, large and small, to really collaborate to create these solutions. We saw at the beginning talking about the need for transformation at scale and at pace.
What barriers must we overcome? And Jesse, can I come to you first Two come to mind immediately, just based even on interactions this week. The first is the operational reality of working with deeply regulated large energy companies. Many of the companies that we work with when we have to bring together, in some cases, dozens of corporates around a single solution, we have to teach them how to use all this web3 technology.
And remember, these are companies that cloud computing is new to, right? They're hosting servers on site and we're coming in. We're saying, oh, yeah, you got to use cloud. And by the way, here's this public blockchain you're going to be connected to. You know, it's a completely new mindset operationally. So massive internal education lift.
Now, we've been working with Shell since 2017 and I feel like we've really overcome a lot of those internal hesitations. So now we've done many projects to get there. We can move, but that takes time and effort to get these corporates up to speed. The second one, I would say because we're working into energy, it's regulatory, but it is not regulatory about crypto or blockchain, it's regulatory in that many of the solutions that in particular Sophia and I's organisations are trying to bring to market about helping in particular electric vehicles become a part of the grid. The natural party to invest in the software that we're bringing to market are these utilities.
But the way the energy sector is regulated, that's a new kind of investment for these companies. So even though there's a business case, from our perspective, we have to convince energy sector regulators that what we're building creates immense business and societal value in order for these utilities to be green lit, to invest in the software so that regulatory issues in the energy sector in particular are a real challenge for us to overcome day to day. I can't help but feel that there's a bit of a call to action there and the audience have got to see this. But Sophia, you're nodding along to Jesse's remarks there as well. What do you see as the biggest barrier? Absolutely. I can totally agree to that. And maybe one point to I want to highlight your statement, Sabine, which you gave that you focus on scalability, on international solutions.
And this is really something which is crucial. But you are, I would say, one of the only person or company in that ecosystem who is really thinking in that direction we see mainly of our clients, they think in their local very centralised structure and solution. And this here blockchain makes no sense, right? If a company want to improve their own databases, it makes no sense. We spoke today about this cross company transaction and relation, right? So we have to think more in ecosystem than this is really something new.
A change from value chain to, well, your network and to something which is more in the mindset, in culture, it's really tough to change that. And then just you mentioned already regulation the same for mobility. Yeah, it's very localised, very politically driven.
So intends to negotiate higher education. And you mentioned that as well. I see it as big issues and it's something radically new, right? It's not like I come with a feature and now I improve a bit your existing system, it's really totally new.
This is always an issue because for sure all the IT departments, also departments within Shell, they did not wait for blocks move or for energy better rights. They have tasks to do and now we do something which creates effort at the very beginning, right? And the effort needs really teams with with dedication and the focus on such topics because then you have a driver and a supporter who can link and bridge between you, a startup, and the large corporation, right? This is very important and hopefully we have more of those teams supporting us when it comes to POC’s and so on. And I can't help but wonder, you know, as an industry and as a society that has, you know, a real sense of urgency and we have a very clear purpose. And we talk about this two macro changes. One is about technology and digitalisation, the other being around climate change that’s hopefully that will engender some curiosity and also support some focus around becoming educated on transformational change as well.
But Sabine, you know, I'd love to hear your thoughts as well about why, you know, why do these barriers exist that you you have to overcome with your team? Yeah, there's plenty of barriers. I think towards the beginning of this podcast we might have made it sound like it's easy to do this whole transformation Web2 to Web3, but of course there's a not as many different layers, right? Referring to regulatory, as Jesse said, education is absolutely key. We still find there's so many myths and misconceptions about what blockchain technology is and what it isn’t.
I think two more aspects I think tools are bringing into account is that the one perspective of Web3 people think it is going very slow and it is a transformation that will take at least another 10 to 15 years. And it's something we'll watch and see what is the impact. And then sometimes I have these conversations with, let's say, students or first years at universities. For them, it's never any more a question of Web3: Does it exist or not? They're Web3 native from the start. They are already collaborating in open source communities, building codes in web3 setups. And I think to me, I think we need to harness that kind of grassroots revolution that is currently ongoing.
This cultural change that we as enterprises, companies probably need to catch up on because that revolution is going so fast. And the culture of change, of open source code, collaboration, community driven change and impact, that's all the culture that Web3 brings. And to me, I think what I hope that large enterprises will see that and will collaborate and open up their doors of collaboration even more to enhance that kind of culture. So I would love to come to each of you as I thank you for your time and for joining us just with some very fast final thoughts, really. Sophia, may I come to you.
First of all, thank you for being with us today. Thank you very much. And yeah, for me really the key takeaway is the interconnectability between all the parties and the uniting of sectors, right? Mobility and energy we talked about today. Fantastic. And Jesse joining us from California, thank you for being here. And yeah, your final thoughts, if you would. Thank you for having me.
The energy transition is wildly complex, but if we digitise the world using Web3, an open source technology, it doesn't have to be. Fascinating. Thank you. And Sabine, thank you for your time to be with us today. Again, your final thoughts as we close out this fascinating episode.
Thank you very much, Julia, for having us here today. I think from my perspective I would like to open up the invitation for individuals, of people and companies around the world to join this transition and using Web3 to collaborate together because web3 and blockchain, you never do alone. And I think we need all kinds of individuals and companies to come join us on this journey.
Wonderful conversation. Really, in a very short period of time, we've thought about the realities of blockchain, what it is and its potential. But we've also talked at the highest level about some visions of enthusiasm for change at pace and scale. And then we brought it right the way back to real life use cases with careful consideration about some of the barriers that we must overcome. And the opportunity is clear. The vision, the potential and the urgency is undisputed.
And it's been wonderful to have your company today. Jesse, Sophia and Sabine, thank you for joining me. My thanks once again to Sophia Rödiger, Jesse Morris and Sabine Brink. You've been listening to the Energy Podcast brought to you by Shell.
Listen and follow for free wherever you get your podcasts so you don't miss an episode. wherever you get your podcasts so you don't miss an episode. The Energy Podcast is a Fresh Air production, and I must remind you that the views you've heard today and those of the people featured are not Shell PLC or its affiliates. I've been Julia Streets. Thank you for listening.
Until next time. Goodbye.
2022-11-28 22:04
