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Can Blockchain Soften a Potential ‘Hard Brexit’ for the UK Renewable Energy Market? – Energy Reporters

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“Brexit means Brexit” was a famous tagline of the British Prime Minister Theresa May when she started campaigning to take over Number 10 on 11 July 2016. In the final weeks before her departure, Mrs. May also committed the UK to net-zero carbon emissions by 2050 by amending the Climate Change Act. The combination of Brexit and the 2050 emissions target are oblique nods to the desire for greater ‘energy sovereignty’ in a post-Brexit energy market.

Currently, the UK imports electricity from EU-27 countries, predominantly France, Ireland and the Netherlands. Connecting the UK grid with these countries are four international electricity cables, known as ‘interconnectors’, which have a capacity of 4 gigawatts (GW) and provide approximately 6%-10% of Britain’s total power supply. With 11 new interconnectors linking the UK and other European countries, including Denmark, Germany and Belgium, being contracted or planned, this percentage is expected to climb above 20% by 2025.

No matter if Brexit is ‘soft’ or ‘hard’, changes to such connections with continental Europe will be inevitable. Brexit poses a lurking risk to (renewable) energy trading across borders, as the Single Electricity Market cannot continue as it is. It is nigh impossible for the UK to meet its 2050 emissions target (even the UK chooses to abandon the EU’s 2030 renewable energy target of 32% after Brexit) without the interconnectors transmitting power generated by renewables, albeit intermittently.

Renewing future energy trade

If the UK leaves the EU without a deal on future energy trading agreements, all EU rules in energy market regulations will cease to apply in the UK. This means that the UK-based operators can no longer benefit from the current tariff-free electricity imports from the EU. The imposition of tariffs on (renewable) electricity imports will certainly result in energy price hikes for British consumers post-Brexit.

The uncertainties around the Withdrawal Agreement may have already propelled an average increase of household energy bills by £75 since the referendum. A no-deal Brexit would add a further £61 per year on average to such bills. Meanwhile, inadequate private investment, owing to policy uncertainty, is blighting the future prospects for traditional, high-capital renewable energy projects in the UK.

Sovereignty and blockchain

To ensure greater ‘energy sovereignty’, or at least stabilise energy prices post-Brexit, it has not been more strategically important for the UK to further ‘decentralise’ its energy market. The initial barriers to developing a decentralised renewable energy market, including (1) reliability of (or trust among) neighbouring prosumers and (2) under-investment, could be addressed with the advent of blockchain technology.

It could take thousands of words to fully explain the technicality of blockchain. Yet, the shortest definition of blockchain is that it is a distributed ledger grouping transactions into blocks that are chain-linked chronologically. These blocks are verified and cannot be altered or removed without changing every transaction within them. This is called the ‘consensus algorithm’, which makes the blocks very secure and ensures that both traders and consumers are protected without third-party intermediaries.

The recipe for full energy market decentralisation lies in the amalgamation of blockchain and the Internet of Things (e.g. smart meters) with affordable renewable energy production (e.g. rooftop solar panels) and storage equipment (e.g. batteries). Blockchain can help simplify the pricing structure and ascertain the renewables origin through peer-to-peer (P2P) trading in a community microgrid.

Goin’ back to Brooklyn

The world’s first blockchain-supported microgrid is the Brooklyn Microgrid created in 2016 by LO3 Energy, in which a member of the Renewable Energy Working Group of the Blockchain & Climate Institute, Molly Webb, is involved. The Brooklyn Microgrid enables residents to reliably sell excess energy to their neighbours by taking advantage of blockchain, especially ‘smart contracts’. These programs are essentially self-executing and facilitate the exchange of anything of value. They automate P2P energy trading by providing an automated marketplace where neighbours can bid among each other to purchase renewable energy. LO3 Energy pushed the concept further with its Exergy Project dedicated to fundamental data sharing and permissioning with other market players such as solar PV installers. This permits many more new energy services become possible. In the UK, LO3 teamed up with Centrica for a trial of the Brooklyn Microgrid model in Cornwall last April.

Cryptocurrency is an important tool to scale up the decentralisation movement. An example is NRGcoin created by Enervalis in Europe and in which Dr Mihail Mihaylov, another member of the BCI’s Renewable Energy Working Group, is deeply involved. NRGcoin aims partly to address the blind spots of net-metering and feed-in tariff systems, which actually reward excessive production of green energy in a neighbourhood. It is ultimately a decentralised mechanism based on smart contracts with multiple stakeholders, including the utilities, grid operators, distributed system operators, utilities and of course, buyers and sellers of energy.

The devil is in the details

That said, it will still be the details of the energy chapter of the final Withdrawal Agreement from the EU that determine the necessity of rapid energy market decentralisation in the UK. The application of blockchain has undeniably limited capacity to influence the ongoing Brexit negotiations. It can only make a hard Brexit softer for the UK energy market if British prosumers are willing to join the blockchain movement.

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Italian Banking Association Uses Blockchain to Test Data Reconciliation Successfully

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The banks from the Italian Banking Association (ABI) have processed a reconciliation of data from an entire activity of the year using the blockchain technology. According to the group’s press release, the tests were successful and proved that the technology could be very useful to local banks.

During this first test, the group processed around 200 million data entries using the blockchain system, which is called Spunta Project. The success is proof that the platform can be used to verify the data quickly.

At the moment, the project has eighteen Italian banks participating and 35 nodes that process the transactions and operations. This means that 78% of the banks present in the country are a part of this project.

According to the reports, the system will be officially implemented on March 1, 2020. Most of the necessary tests were already made, so the technology is ready to be more widely used by the banks which are a part of the national association.

The Spunta Project is officially led by ABI Lab, a research team created by the ABI. It also has the participation of NTT Data, Sia network and the R3 network with its Corda technology.

This is far from the only case in which banks are using the blockchain to achieve better results when processing data. In fact, blockchain technology is impacting the banking sector more than almost any other sector and specialists believe that it will be responsible for huge changes in the upcoming years.

Source: bitcoinexchangeguide

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Swedish central bank now looking into plausibility of issuing ‘e-krona’ CBDC

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According to the Head of the Swedish central bank, Facebook‘s Libra project has given incentive to central banks across the world to review and investigate the development of new financial technologies. Stefan Ingves, Governor of Sveriges Riksbank, told CNBC,

“It has been an incredibly important catalytic event to sort of shake the tree when Libra showed up out of the blue, and that forced us to think hard about what we do. Part of my job is to produce a good/service called the Swedish krona which is convenient to use for Swedish citizens, and if I’m good at that in a technical sense then I don’t have a problem. But if I were to start issuing 20-kilo copper coins the way we did in 1668, then we soon would be out of business.”

As the use of cash continues to fall in Sweden, the Swedish central bank has been looking into the possibility of issuing its own digital currency. Several local business in the country no longer accept physical currency, with some even putting up signs to warn customers before they enter the store. As of now, Sveriges Riksbank is looking to investigate the plausibility of an ‘e-krona’ digital currency, which it says could be introduced if it decides to do so. However, it isn’t the only central bank looking into this.

China has already announced that it is close to launching its own digital currency while just last week, the Swiss National Bank declared that it was looking into the use of digital currencies in trading.

With Libra having lost backing from more than a few companies recently, Ingves warned that Facebook would be faced with challenges as it moves forward with the project. He said,

“In this day and age we have to twist things in our heads and do things based on the assumption that nothing is on paper, and then when we talk about money everything is going to be digital in one form or the other. But the old issues — private sector money or public sector money — they are basically identical, and if history gives us any guidance at all then almost all private sector initiatives have collapsed sooner or later.”

Just yesterday, The Libra Association announced the appointment of members to the Board of Directors, with the Board including David Marcus, former PayPal executive and Head of Facebook’s blockchain strategy. Currently, the group has 21 members, 7 fewer than its original 28 after Mastercard, PayPal, Visa and four more members backed out.

Source.cryptonewsz.

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CipherTrace’s Blockchain Forensics Service Now Covers 700 Crypto Assets

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The transactions of over 700 cryptocurrencies are now searchable via the blockchain analytics offering from CipherTrace.

That means more than 87 percent of the top 100 cryptocurrencies by volume can now be traced through the API service, the company said Tuesday.

Backed by notable firms like Galaxy Digital, CipherTrace has most recently been involved in the push towards addressing regulatory guidance issued by the Financial Action Task Force in June.

With some 522 million data attribution points, CipherTrace says its platform is uniquely situated to tackle real-world applications like terrorist financing.

“Until now, large swaths of the cryptocurrency ecosystem have remained opaque to AML and CTF monitoring,” CipherTrace CEO Dave Jevans said in a statement.

Providing a view into this data is vital for the future of the industry, Jevans argued, saying:

“Only by helping virtual asset service providers rid their networks of criminals and terrorists will the industry achieve the level of trust required for widespread adoption and government acceptance.”

With the update, the complete financial transaction histories of top cryptocurrencies by market cap such as ethereum, litecoin, and bitcoin cash have become available. Support for ERC-20 tokens and smart contracts has also been added, including transaction and counterparty information, CipherTrace said.

Through features such as transaction alerts for flagged accounts, CipherTrace is marketing its product to government and law enforcement agencies, as well as crypto and blockchain firms that seek to align with increasingly tough international rules.

sourde:coindesk

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