Utility Week

20 | 10TH - 16TH NOVEMBER 2017 | UTILITY WEEK Operations & Assets Analysis A cross Germany, drivers of electric vehicles (EVs) depend upon a network of "Share & Charge" charging points whose flexible usage arrangements rely on their connection to a payments platform operated by Essen-headquartered Motion- werk, a subsidiary of Innogy SE, itself a sub- sidiary of RWE. Soon, a series of alliances and partner- ships with charging point infrastructure owners in other European countries will see the network stretch from Norway to Italy – including, at some point during 2018, the UK, where the charging points will be sup- ported by Npower, RWE's UK retail arm. To some, the expansion of EV charging infrastructure alone is a sign that visions of the future are being made real. Motionwerk's drive to connect more and more charging points to its platform sits alongside a surge of other investments in infrastructure and payment mechanisms, not to mention a series of high-profile policy announcements from national governments heralding the end of petrol and diesel-powered vehicles. Already this year, governments in France, China, and the UK have said that sales of internal combustion vehicles will be banned from around 2040. Car manufacturer Volvo has said that from 2019 all of its new models will be either all-electric or hybrid. Yet, look closely and there is an even more futuristic dimension to Motionwerk's EV charging platform – its reliance on block- chain "distributed ledger" technology. Popularly associated in the public's mind with the bitcoin currency, blockchain- driven distributed ledgers are the first real innovation in the structure and recording of business transactions since the ancient Sumerians began encoding them on clay tab- lets in cuneiform script over 6,000 years ago. Transforming transactions Stripped to the essentials, business transac- tions revolve around the exchange of a series of documents between two parties. There's an initial order, for instance, followed by an acknowledgement, then a shipping note and packing list, and then an invoice, a payment, and finally a payment advice. Stages may be skipped or subsumed within others, but the basic structure remains the same, with book- keepers and accountants keeping tally. One party's invoices, in short, match the other party's payments and outstanding payment obligations. At its starkest, blockchain dispenses with all that. By securely encod- ing transactions within identical distributed ledg- ers held by both parties, the need for these docu- ments disappears. So does the need for the account- ing and checking processes which match and validate transaction documents. Held on multiple computers as a huge dis- tributed database, a blockchain ledger is both secure and immutable: falsification is impossible, because of the impossibility of changing every distributed record and its hash-encoding at the same time. The utilities application For utilities, which are fast embracing both extensive levels of automation and machine- to-machine transactions, the appeal of block- chain is becoming apparent. At a stroke, it provides a means of easily and securely monetising transactions where conventional bookkeeping and document exchange would be cumbersome. One automated device can transact with another automated device, with both devices agreeing the mutual bal- ance of payment obligations at every step of the process. Moreover, in any industry in which cyber attack and digital fraud are very real con- cerns, the distributed nature of blockchain's ledgers add both security and resilience. As with the internet, there is no central point to attack: the system of record is the network, rather than a given node within it. Even so, the existence of a particular technology and capability is a very different matter from seeing that technology and capa- bility become a trusted and ubiquitous part of how business is done. Again, the exam- ple of the internet is instructive. Invented in the 1970s, it took until the mid-1990s for the "killer applications" of the worldwide web and consumer email to drive mass adoption. So too with blockchain, say the experts. "Blockchain technologies will definitely impact utility operations, but quite how that impact will be seen is still evolving," says Christine Easterfield, prin- cipal consult- ant at analyst firm Cambashi. "Blockchains and the distributed ledgers based on blockchain technology can support many applications, from wholesale energy trading to meter registration, and also reckon to provide greater security against cyber attack, because every transaction is 'witnessed' by the entire user community. With trials and pilots in operation around the world, the industry seems actively engaged in exploring just what blockchain might do for it." Nor are possible blockchain applica- tions within the industry solely of a finan- cial nature, adds Stuart Ravens, principal research analyst at analyst firm Navigant Research. "There's a lot of talk about block- chain's distributed ledger technology, but you can also view blockchain as a distrib- uted database technology," he says. "And here, blockchain could take off very quickly, because this makes it possible for all the players in an energy network to share a single view of the network's data. It's not a particularly sexy application of blockchain, but it could be where the technology is more likely to gain traction." These perspectives on blockchain are certainly shared at technology services pro- vider Wipro, where a number of initiatives have been underway to both explore and exploit blockchain technology's potential. Of particular value to the utility sector, says Krishna Ram, Wipro's general manager for the utility digital products and innovation Blockchain and utilities Closely allied to the technology behind virtual currencies, blockchain offers a fast, efficient and secure way of enabling such services as peer-to-peer trading. Utility Week investigates. "At a stroke, blockchain provides a means of easily and securely monetising transactions"

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