Interview with Jesse Morris, Chief Commercial Officer, EWF
After managing to grab Jesse on Telegram, we had a great chat and managed to answer some really important questions about the new Energy Web Foundation that everyone worth their salt is joining. It’s a very technically sound and useful solution – both in a social and technical sense.
How did the EWF come about – from where and how did the vision originate?
Back in 2016, I was working at the Rocky Mountain Institute (RMI), a US-based “think and do” tank focused on the energy transition. At RMI, several of us were working with a mix of technology companies, oil & gas majors and utilities, to help them build business models around distributed energy resources. At the time, we were trying to figure out what the best combination of digital technologies was to enable (eventually) billions of devices owned by millions of different customers to share data, transact, and interact with the grid. And into this mix, we stumbled into blockchain technology after a meeting with another EWF co-founder, Grid Singularity.
We developed several hypotheses about how blockchain technology could be used to transform the energy sector, so the question became not “if” we should do something about it but “what.” So, we launched EWF in 2017 with the goal of bringing blockchain technology to the energy sector. To date, we have assembled the world’s largest energy blockchain ecosystem, built our first blockchain to serve as a platform for open innovation, and released a series of open-source toolkits to enable anyone to build decentralized applications on top of our technology stack.
Now, with the Energy Web chain live, and our community assembled, we are focused on helping our Affiliates design, develop, and scale enterprise-grade energy blockchain solutions.
How is the EWF funded? Will the funding and long term future of EWF depend on fluctuations in the cryptocurrency markets?
To date, we have been funded by contributions to EWF by our Affiliate organizations. In exchange for those contributions, Affiliates were given access to energy blockchain research, educational materials, workshops/forums/ hackathons put on by EWF, and technical support to help them begin developing their own energy blockchain solutions. These organizations were also given a pre-allocation of Energy Web tokens which are used to send transactions across the Energy Web chain.
EWF also has a store of tokens intended to fund operations of the organization and continue investing in tooling and other solutions for the Energy Web Chain. But we are now operating EWF in such a way that our business model and ability to drive impact as a mission-driven nonprofit organization does not rely on a fluctuating cryptocurrency market. For example, we are about to launch a recurring membership program for our Affiliates to continue receiving access to services rendered to date. We have begun to structure technical service level agreements for utilities actively deploying energy blockchain solutions, and in many cases, we are implementing large scale IT projects with our Affiliates to help them stand up commercial solutions on top of the Energy Web chain (not just pilots or proof of concepts). I like to think of EWF as a mission-driven nonprofit (e.g., RMI, Linux Foundation), who’s also an open-source technology integrator/service provider (e.g., Red Hat) and an innovative technology company (e.g., analogous to any number of the technology development focused organizations in the greater Ethereum ecosystem).
How large are the current operations of the EWF? Are personnel and Energy Affiliate numbers expanding at a rapid rate?
We have approximately 25 staff in Europe and the U.S. We have ambitions to grow significantly in the next several years but are currently in transition from the first phase of EWF (building community and launching the chain) to a new phase focused on helping our community build large, commercial energy blockchain solutions. In terms of our Affiliate organizations, for the past several months we have focused on going deep with our existing community to build solutions but are planning a new recruitment push to grow the ecosystem beginning in the fall of 2019.
How much of a burden are the current regulatory frameworks to the growth of EWF and how is EWF tackling them?
Regulatory barriers are often brought up in the context of energy blockchain. However, I offer somewhat counter-intuitive framing on this topic: think of blockchain is an enabler, a technology that can solve regulatory problems specific to the energy sector. It is something that should be embraced (not feared) by regulators as it can achieve certain outcomes in the energy sector that have eluded us for time. For example, carbon emissions tracking can be significantly streamlined, automated, and scaled (e.g., integrated for small scale rooftop solar customers) using blockchain technology. Data can be “trustlessly” shared between market participants such as retailers, DSOs, and TSOs; energy efficiency targets can be tracked transparently…..the list goes on.
To be sure, there are areas where regulatory changes can help us achieve our mission of a decarbonized, customer-centric electric grid built on top of blockchain technology. On the energy sector side, we track closely all regulatory activity focused on enabling distributed energy resources to participate in electricity markets. In markets where DERs can make their customers money by making the grid more efficient, the value proposition of blockchain technology shines brighter. The same goes for markets with strong mandates around renewable energy. On the financial side, the SEC’s continued evolution on security vs. utility tokens is a challenging space for our corporate members based in the US to navigate, but we are hopeful that additional clarity on this front will come over time as the SEC becomes more familiar with crypto projects and the technology in general (they’re moving fast: I just stumbled upon an article that SEC staff are actually standing up full nodes on several public blockchains).
What is the role of the Energy Affiliates – do they contribute to the coding and maintenance of the Energy Web chain or are they mainly there to build apps?
Our Affiliates host validator nodes on the Energy Web Chain, build solutions on top of the chain, and inform us (EWF) as to the requirements of any open-source software we make. For example, Energy Web Origin is a series of open-source EWF-developed toolkits intended to help our Affiliates build their own decentralized applications focused on renewable energy tracking, verification, and trading. We built Origin at the behest of our community and sourced all technical and business requirements for Origin from the community as well. This is a key role played by our Affiliates.
Can you give us a few real-life examples of apps and how smart contracts are currently utilized in them? Could you give us a vision of what they could be in 5-10 years time?
Our “dApp” website page has a running list of the solutions we track in the space (and all developers) that might be useful to highlight. I’ll go through two examples of what’s happening today. TSO Elia in Belgium and Germany has built a dApp focused on integrating DERs to the wholesale electricity market. Their solution solves several long-standing issues around DER registration, onboarding, integration to utility operations, and most crucially in this case settlement. In this market, customers are required to lock up funds in escrow in order to participate in; for example, ancillary service markets, so devices/customers who fail to deliver on a grid balancing event can be penalized. Smart contracts on top of blockchains are used in this case to create an entirely new way of managing DERs. We are also aware of several similar solutions to Elia’s currently in development in North America, Europe, and Southeast Asia.
On the other side of the spectrum, we can talk about renewables marketplaces. Singapore Power Group has built a platform that uses smart contracts enabling originators to buy and sell International Renewable Energy Certificates (IRECs), helping corporates meet sustainability goals and homeowners and EV drivers purchase renewables in a “trustless” way that is automatically compliant with the IREC standard.
Five years from now, here’s the kind of customer journey I hope these decentralized solutions and architectures will merge into. A residential customer has their retail electric provider ship them a box (like today we get routers and cable boxes sent to us for self-setup). They install that box, on their own, and get it connected to the internet. That box then becomes their “agent,” managing all of the internet-connected devices in their home (be it an Electric Vehicle, Nest Thermostat, Battery, the list goes on) and their preferences: do they want to buy green energy? Do they want to buy locally? Do they even care at all? Do they want to optimize their energy consumption to save money, be paid to support the grid, or do they just want electricity? But crucially—and this is really where blockchain can help if you think through all of the pain we’ve collectively seen as an industry with regards to the entire “Smart Home” movement and issues with IoT—behind the scenes the moment this agent is energized it is registered, verified, fully integrated to the local utility’s operating network layer, and data from the entire building (and about the customer) can be trustlessly shared with all the parties that need to see that data in order to keep the lights on (e.g., DSO, TSO, retailer, regulator). This is the kind of architecture we need to support a low-carbon, customer-centric grid of the future.
What is the role of the EW-token in the ecosystem other than to act as gas to power the transactions – is there a plan to implement a staking system? What is the strategy regarding getting listed on public exchanges?
The primary function of EWT is, as you say, for gas payments. Several organizations in our ecosystem are experimenting with different staking mechanisms, whether as an augmentation to governance functions, vouching for the authenticity of data coming from a device, or as a key function in various registries for energy sector assets. EWF and the validators of the EW chain are in discussion on a listing plan now, and we plan an announcement on the topic this fall.
What is the pull for large companies to use the Energy Web chain instead of developing their own IP? How difficult of a task has it been to introduce blockchain to the large conservative companies?
The appeal of public blockchains like EW chain is that it’s already there and it’s free (or almost free, depending on gas prices) to use from day 1. No more contacting IBM, Amazon, or another organization to spin up some “as a service” or cloud-based solution that requires a monthly subscription or some kind of vendor lock-in. Public networks enable any corporate to download a client and begin experimenting on day one of a new product development lifecycle. Furthermore, why would an organization dump millions of dollars into developing new IP if another company on the other side of the planet has already done that—potentially in partnership with other organizations to refine the software—and released that code for free? Of course, this is a new way of thinking about software, risk, and other factors for corporates, but the transition is already happening. We see it as very similar to the days of intranets vs. the transition to the internet, and many organizations are beginning to recognize the benefits of public networks based on open source technology. In case we need another piece of evidence that this transition is happening, look no further than Facebook’s Libra project. Here is an architecture almost identical to EW Chain (permissioned validators, open-access public chain on top) entirely based on open source technology.
For us, the most significant education barriers are a) overcoming perceived myths about blockchain technology (e.g., blockchain does not equal bitcoin, not all blockchains are as energy in-efficient as bitcoin) b) helping corporates understand that there’s much, much more to blockchains in energy than so-called “peer to peer” use cases and c) helping them navigate through some new risk areas that blockchains present with regards to open source software / IP, accounting (dealing with tokens), and in Europe GDPR.
Has EWF looked into utilizing a Directed Acyclic Graph (DAG) or other more nimble database infrastructures and could there be benefits compared to using the Proof of Authority based blockchain model?
Of course, DAG chains are incredibly interesting for transaction-heavy energy blockchain applications. And to be clear: we will always advocate for our community to migrate to what the best technology stack is at the time. Right now, Ethereum is by far the biggest, most active, and most innovative blockchain ecosystem in the world, and we’re comfortable with our chain being firmly in that circle. We’re also tracking Polkadot and Cosmos very closely since those architectures really resonate with energy sector audiences, especially when we start thinking about some of the more serious transactive energy blockchain applications we expect to see in the next several years.
I would also caution us against the same scalability concerns we’ve heard for years. Blockchain is only one layer in the emerging “Web 3.0” technology stack that much of the blockchain ecosystem is focused on creating. “Transactions” as we think of them take place in blocks on blockchains today, but tomorrow, what if we just used the blockchain to establish trust between devices, customers, and other stakeholders, and then transacted between these trusted devices using different, more scalable layers of the technology stack? A former Ethereum foundation engineer recently posted on this in the IB Times.
Has everything gone as planned since the launch of the actual blockchain platform a bit more than a month ago – has there been any bigger surprises to EWF or to you personally?
Shockingly for a technology project, we delivered our chain on time, so that was an excellent surprise! Since launching the chain, I’ve been surprised by how many from our community were eager to become validators (we have about 15 right now), how some of the corporates are incredibly eager to get their hands on with the technology (by hosting a validator node), and by the kind of creative and collaborative environment we’ve created with EWF.
This last point is probably worth driving home. I’ve worked in the energy sector for ten years, and although there are encouraging instances of collaboration I can think of, I’ve never seen anything quite like what we have in EWF. On a weekly basis, we have large utilities and energy companies speaking directly to each other (using a digital tool by the way!) to discuss technical issues, governance, DER-based business models—all with energy blockchain as the central convening point. I’ve never seen this level of hands-on collaboration in the electricity sector…it just doesn’t really happen!
What are some of the bigger obstacles you see for Energy Web Foundation in achieving the “standard” status and becoming the leading base layer for blockchain apps in the cleantech industry?
I’ll actually answer your question as it relates to blockchain technology in the energy sector more generally and less about EWF. Again, we’re a mission-driven nonprofit trying to change the energy sector with blockchain tech, and for us, it’s the impact of this technology that matters.
I see three primary obstacles to bringing energy blockchain tech to the sector at scale:
1) Empowering corporate IT departments is a new topic for the energy sector: by far, the most successful companies in our ecosystem have empowered their IT and innovation departments to build POCs, pilots, and then begin transitioning them over the “corporate valley of death” into minimum viable products and eventually commercial solutions. In energy, both of these departments typically lack much political or decision-making power. Unless individuals within these departments are empowered to experiment and come forward with proposals to management, it will be very challenging for energy blockchain solutions to ever come to market.
2) The pace of change in the energy sector makes digital innovation challenging: how many digital and/or software companies have gone from small startup to well-funded startup to public company in the past ten years? I can count one: Tesla. One reason for this is the nature of the energy sector. It moves incredibly slow, so if you are an energy blockchain developer trying to lock-in your first, second, or third customer, you’re facing half-year sales cycles, major internal procurement hurdles, and you have to convince a large utility who’s used to procuring services from big vendors with large balance sheets to working with a small startup. Not an easy task, and a lot of the startups in our ecosystem struggle to grow because of these issues.
3) The technology is changing rapidly: we know that we’ll need new blockchain technology and architectures to support high throughput use-cases and changes to electricity markets. But at the same time, we don’t want corporates to wait because they know the underlying technology is going to go through several generations of change in the next ~ five years. This balancing act of getting started with basic applications while knowing the technology stack will continue to evolve and possibly create additional friction for organizations trying to deploy solutions.
Thank you so much for this very thorough and interesting interview! The Energy Bit will continue to monitor the development of EWF and the emerging technology in the energy market. Feel free to leave a comment and make sure to check out our other interviews and articles on our homepage, or continue the discussion on our Facebook and Twitter pages.