Blockchain for energy

 By Luca Longo

The mechanism behind Bitcoins and other cryptocurrencies will revolutionize the distribution and access to energy. Eni is on the front line…

We were the first to explain in a simple way what cryptocurrencies are and how blockchain, the technology behind it, works. We tried to predict the future by imagining how the Bitcoin bubble will burst. We did not look at a crystal ball but at the mechanisms and statistics, showing that the phenomenon behind crypto-currencies is set to step back soon.
There is no question that the blockchain protocols, on which crypto-assessment are based, will have a bright future in all the applications – including non-financial ones – where it will be necessary to guarantee the reliability of several partners without being able to rely on a central authority recognised by all the stakeholders involved.
It is quite likely that the future of these technologies lies above all here. And the world energy market is one of the most suitable for their application. Blockchains will be able to transform electricity and fossil fuel distribution systems into giant, decentralized yet integrated networks.
Think about a worldwide gas network where extraction wells, pipelines, refineries, stockpiles, liquefaction facilities, LNG carriers, regasification plants, distribution networks and individual users will be able to interact directly through secure, transparent and intermediary-free trading. Beside the gas one, a network of liquid fuels could be created by linking oil wells, oil pipelines and tankers, refineries, distribution and retail chains. Up to the distributors’ doorstep.
But the most revolutionary application for blockchains could be in the electrical market. This in fact, is by its nature, much more distributed and will be even more so with the growth of domestic photovoltaics. Imagine an integrated global network in which large and small photovoltaic panel systems, wind turbine, solar thermal concentrators, electricity storage and retention systems, industrial and home appliances, will represent millions of interconnected nodes of all sizes able to interact directly, buy and sell electricity through intrinsically secure exchanges across all borders, including the world’s hottest ones.

And all this will be possible without the need for intermediaries and guarantors.
For this reason, blockchain technologies could not be bypassed by Eni which was one of the first energy companies to bet on innovation in this sector as well.
At the beginning of 2017 – together with BP and Wien Energy – Eni launched a first pilot project to develop a blockchain dedicated technology to managing energy exchanges between different actors. In just three months, thanks to the “Interbit” blockchain platform developed by Canadian BTL, the first intrinsically safe and self-guaranteed electronic energy trading system was set.
Interbit solves some of the problems that make some first technologies such as Bitcoin extremely vulnerable: its architecture enables thousands of blockchains per server to be activated and connected to each other; thus hundreds of thousands of transactions per second can be handled. This solution allows exchanges of all sizes: from small quantities to petabytes needed for large transactions among the world’s largest companies. In addition, unlike Bitcoins, transactions can remain confidential and only be available to those who need to see and verify them. Lastly, the technology is easily accessible to developers: all applications can be written with JavaScript, the system used to make web pages.
The experiment was so successful that at the end of 2017 companies like Gazprom, Total, Mercuria, Vattenfall, Petroineos and Freepoint also joined. The goal now is to extend the scope of OneOffice – the dedicated application based on Interbit technology – to the entire energy trading process and to open new transactions in record time: already by 2018.
But the commitment of Eni as the pioneer of new technologies is not limited to this. The six-legged dog company – together with 35 other European companies – is part of the Enerchain consortium developed by the German company Ponton with the aim of creating a platform for energy trading and optimisation of the network management.
Once again, Eni is the first to break new ground, with the same pioneering spirit that guides geologists in the search for new oil fields with HPC4 and researchers who invent new technologies for the exploitation of renewable energies and for the environmental protection.

about the author
Luca Longo