UK based machine learning start-up Verv executed the UK’s first physical energy trade on the blockchain in April 2018. Now it’s partnering with Ocean Protocol to develop its longer term goal, an energy information marketplace.
Verv sits in a unique position in the blockchain energy market. As its COO Maria McKavanagh says, the long term goal of the business is to develop a data market. The company has been able to steal a march on its rivals due to its smart hubs, which are already being deployed in the marketplace. McKavanagh says, ‘Our advantage is that we’re already in the home. We sample up to 1m times per second allowing us to forward predict energy needs.’
Most smart meters can’t tell if you’re turning on a kettle or a washing machine, and they’ll consume different amounts of power.’ She says, ‘A Verv home is one that plans for the future, knows its usage profile and buys power at the optimum price.’
First UK peer-to-peer energy trade on the blockchain
The trade took place in April, at Hackney’s Banister House Estate where Verv has a live peer-to-peer energy trading trial underway. The trial is in collaboration with Repowering London, who had solar panels installed on 13 of the blocks of flats that make up the community back in 2015, creating what is called Banister House Solar.
With the addition of artificial intelligence-based Verv smart hubs in participating residents’ flats, and Powervault batteries in communal areas, Verv’s platform calculates the energy demand profile of homes, determines the solar energy supply in each storage battery and in turn allocates green power to residents based on their needs. The first trade saw 1kWh of energy being sent from an array of solar panels with excess energy on one of the block’s roofs, to a resident residing in another block within the estate.
The system gets round the energy intensive problem that bitcoin has in proof of work verification by using a proof of authority model instead. This needs trusted validator nodes to confirm the trade on the blockchain ledger.
The proof of authority approach means that the system doesn’t incur the level of extreme energy consumption that has been raised as a concern by analysts assessing energy trading on the blockchain.
The Verv system allows trades to occur throughout the day within each energy trading community, then once per day logs all the transactions on the Ethereum blockchain so that cost is minimised per transaction but still ensuring that proof of trade/exchange becomes immutable.
One thing McKavanagh has been clear about is the power of data. She believes that enabling people to control and sell their own data, behaviour patterns etc., will not only generate household funds via VLUX tokens but give data control back to the individual. She says that, ‘We’re on a mission to get everyone’s bill to zero, the idea is that should consumers choose to share their data, they will receive VLUX tokens that will give them money off their electricity bills.’
Data and the energy blockchain
Verv has now partnered with data sharing ecosystem Ocean Protocol to create a new data marketplace for energy. The sampling of data from Verv’s AI smart hub includes data around consumption, renewable tech, purchasing habits, suppliers and home appliances, some of which extends beyond just the energy industry. Ocean Protocol uses blockchain to allow data to be shared and sold in a safe, secure and transparent manner.
Regulation and the energy blockchain
Verv’s Hackney trial has been shortlisted for the Ofgem Regulatory Sandbox, a program to help Ofgem understand if these new approaches need to be regulated and if so, how? When regulations were first put in place, there was no blockchain. In the UK for example, the generation of power requires a licence. That won’t be appropriate for the prosumer market. The Verv trial is one that Ofgem hopes will help it decide what regulation should look like.
Business models on blockchain
Business models and their effectiveness are going to be key to success on the blockchain. The goal of the company is to keep the customer at the centre of its process, to help them get the best out of their homes. The combination of predictive maintenance possible with 1m checks per second, as well as price optimisation and data control seem to be a compelling proposition. The company is in talks in Dubai and Singapore and hopes to roll out in the US in Q4.
With $110 billion losses reported in the US due to blackouts, there is going to be increasing demand for local generation and micro-grids and companies like Verv are likely to be at the forefront of providing an exchange framework for that demand. As McKavanagh says, We’re on a mission to bring affordable, clean energy to all. Ultimately, we want to build a new energy marketplace, built this time for the consumer, and we believe we’re in a prime position to do so.’