Proving the Business Case for the Internet of Things

Tokenising Estonia’s energy grid

William Payne
October 31, 2018


Lithuanian energy tech firm WePower has completed a nationwide energy tokenisation pilot project in Estonia in partnership with transmission system operator (TSO) Elering. The project is intended to enable digitalisation in the Baltic nation. 

The initiative, to convert energy consumption and production data onto the blockchain on a national scale, has been part of a collaboration between the two organisations. 

Kaspar Karleep, CTO of WePower, says: “Projects of this scale and ambition haven’t been attempted before, in part because of the complexity involved, but also because energy data is highly sensitive. Blockchain is the ideal enabler because its foundational principle is trust, which can be leveraged to bring revolutionary transparency to the industry. The project will deepen our understanding of blockchain as a means to share data, paving the way for much needed innovation in the energy industry.”

Estonia has 100% smart meter coverage and a data sharing platform called Estfeed. Estfeed enables consumers to download and share their data with any persons or companies whom they choose, as well as anonymous and aggregated data, such as that used for WePower’s pilot.

According to WePower, the pilot project tested the limits of the technology, with the company's engineers successfully navigating their way around the challenges of uploading such a large amount of real-world data to the blockchain – proving that it was possible.

The first phase of the tokenisation pilot allowed WePower to validate and verify the logic and processes that will be at the core of the WePower platform. In total, 26,000 hours and 24TWh of energy production and consumption data was uploaded to blockchain, creating a total of 39 billion Smart Energy Tokens.

One of the key findings was that Ethereum is mature enough to accommodate contracts with multi-year terms. However, while Ethereum is currently one of the most mature blockchain solutions supporting smart contracts, a fully decentralised application for large scale autonomous usage is not yet feasible for WePower’s purposes. For now, a hybrid solution will be used while monitoring the rapid development of Ethereum as well as other blockchain technologies.

Through testing real data, WePower says that it has been able to build a new technology layer for the energy industry.

This new technology layer will allow for both software and hardware innovation that will change the way energy markets operate – especially when it comes to developing models for more effective integration of distributed green energy with the grid, enabling new interactions between different partners and breaking silos between energy market participants.

Taavi Veskimägi, CEO of Elering, the Estonian TSO which operates Estfeed, says: “Future clean and secure energy will depend on innovative solutions and consumer empowerment. However, a major barrier in most countries is lack of access to energy data. Estfeed unlocks data access within Estonia and we are now working towards doing this on an international level. WePower's proof of concept is important for showing how data access leads to innovation.”

WePower first signed a memorandum of understanding with Elering in October 2017 to convert energy data into blockchain on a national scale. It’s the first WePower research and development project that aims to validate approaches and use cases for WePower’s trading platform – which will enable consumers to purchase green energy directly from producers, with information stored on the blockchain – as well as the wider business.

Although the current platform and its core features can run on the Ethereum blockchain, to achieve WePower’s full vision a number of different blockchains will be tested to find the best fit for large scale infrastructure projects. Experience gained from the project will also be shared to benefit other developers.

Nikolaj Martyniuk, CEO of WePower, says: “The energy and wider infrastructure sectors have been largely untouched by the digital disruption that has transformed so many other industries. Start-ups rarely tackle big infrastructure issues because of the cost and complexity involved, but our approach deploys blockchain as the critical means to change this. Making sector data available on the blockchain enables new innovation with an built-in trust protocol.The successful delivery of our project with Elering shows that we can solve real-world problems at scale.”

WePower received the consumption data from Elering aggregated on the zip code level in order to ensure anonymity of private individuals from a GDPR perspective. The project adhered to the safety and security of supply standards that are obligatory for Transmission and Distribution System Operators.