Interview with Georg Rute, Elering (Estonia)
What was the premise that Elering came together with WePower, and what was the reason for the project?
The background is of course Elering, where I work, which is the transmission system operator for electricity and gas in Estonia. Our task is to ensure that the lights stay on and we see that our role in Estonia is to support energy markets and innovation. Another piece of background information that must be understood is that in Estonia we have 100% smart meter coverage and at Elering we have a central data hub for all of the consumer data, so we have access to all the energy data. As we are a regulated business we treat all market participants equally, so this data is accessible to anyone who wants it from us and WePower was one of those who wanted to use this data. There are also universities doing research with this data. So basically we enable third-party companies like WePower to access this smart meter data to do innovation and that’s the framework or the basis on which we were happy to collaborate with WePower. Almost exactly a year ago, when they approached us and asked whether they could access the smart meter data, that’s basically when our cooperation started and we signed the memorandum of understanding. Our position was that we wanted to support markets and innovation, and their point was that they wanted to use data in their business and that was basically it, that was the role of learning in this collaboration.
How large is the project with them?
At Elering the project is part of our everyday work with the data access platform Estfeed. From our side, it’s a project with people, and WePower specifically was something we liked. A year ago we signed a memorandum and since then we have made data available, but again from our side from our point of view it’s not just a project with WePower it’s a project to make data accessible to anyone. About the size it’s hard to say, this project has many people involved but from our point of view it’s a data accessibility project.
Are there any other companies than WePower accessing the data at the moment that you can tell us about? You’ve mentioned universities what about other companies who are doing similar things?
To clarify, we make private and anonymous data accessible. The private data comes from individual homes and smart meters, which are only accessible if the homeowner or business owner agrees to share, and this is one part of the data access that WePower will be interested in, in the future. For the part that we began our conversation with about the aggregated anonymous data about the entire country. The entire country consumption data, this is something currently today only WePower and the university have obtained from us, but the data is acceptable to anyone who would like to access it.
What’s the current project state with WePower? Is it that they’ve gotten the data and done something with it? and if so, what’s the the plan in the future with them?
Indeed they obtained data from us and offline they did some modeling and simulations, and that project phase has now been completed, which was the main part from the WePower side. In the last few months there haven’t been any further interactions with them, however we are open to WePower or anyone else to come to us for access data. I also hope that in the future, WePower will start operating their business in Estonia. In which case they will in their actual business need this private data, so once they tokenize energy, they need to know how much energy was produced or consumed, for that purpose they need the smart meter data and that they can access from us.
So at the current moment there’s no energy trading going on?
The WePower project was to prove the scalability of the technology and for that they used country-level aggregated data to model offline models. Basically, explore trading on the blockchain, but that was done offline on their systems, so there’s no actual energy purchased or sold at this point. The second step will happen once they have their actual implementation system running it in Estonia, but that timing depends on their business priorities. They are welcome to come here and I think it’s easier for them than in many other countries because the smart meter data is accessible.
Do you, as Elering, hope for more companies to be competitors to WePower and other blockchain entities to come and be present in Estonia?
That is our purpose in all of the data access. Again to emphasize, our mission is to ensure the security of supply of energy. We see that in the future with decentralized energy and production consumption in many more places than ever before. So energy systems are becoming under stress, the more confidence we have in solving these issues, the better. We are open to any companies on the same terms as with WePower to obtain data and to work with us, that’s always the case: we treat all market participants equally, so anyone who comes and calls me I deal with them the same way as with anyone else.
What is the biggest advantage and disadvantage of using the blockchain in the electricity business from your point of view at Elering?
Elering doesn’t have a formal position on this. My personal point of view is that it has applicability in limited domains in certain areas. It could be useful perhaps for specific tasks, but I know when I’m talking about blockchains, I’m skeptical that the application of a public blockchain like Bitcoin or Ethereum because in the energy sector in all countries there are trusted third parties. When we talk about blockchains in the energy sector, the types of blockchains that can work are used for efficiency reasons like managing large numbers of transactions. I will let other people figure out solutions and enable this. Personally, I don’t deal much with blockchains in my work at all, so I really don’t have strong feelings either way.
Can you give me a bit of an idea of how you see the blockchain-based energy market in Estonia in five years?
At the moment, seeing the way that energy trading works is fine, we all trust the “Nord Pool spot” markets. So I don’t see the business reason why we should use a different technology. If there is a business reason to use a different technology then it’s a different case, but at the moment their databases work well and they are trusted to secure connections. The structure of the energy market is perhaps changing in the future, and maybe then there will be some use for tamper-proof databases that could be vendors using blockchains. It’s more of an amateur opinion and it’s certainly my own feelings, not Elerings. We do believe that the current structure of energy markets is okay in most cases, except we see that consumers need to participate more, so there will be more with the regulations, market setup and technology.
How much do you expect that this kind of project is speeding up the adoption of green energy trading in Estonia?
In Estonia this is still of proof of concept phase, so we have to talk about the future and I do see that financing renewable energy is a bottleneck for people who have many more roofs suitable for solar than people have money to invest in. This is not just in Estonia but globally, so I think WePower is solving an important problem as they’re making investment into renewables much easier. I have a feeling that it will be significant, but there is no quantified number, if I’m really optimistic maybe 10 percent more people will have solar power if they roll out and are on our scale.
Thanks for your time today, we really appreciate it.