DOE Looking Into Blockchain Solutions For The Fossil Energy Industry
As part of its Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, the US Department of Energy (DOE) is seeking innovative proposals to disrupt the US energy sector, including blockchain solutions to support and enable the development of several fossil energy technologies.
The SBIR program is a highly competitive program that encourages small businesses to engage in federal research and development for commercialization purposes. The STTR program expands funding opportunities to areas that facilitate federal innovation.
In late December 2016, the DOE released an overview describing areas of research) that are accepting proposals for innovation. As part of this request, the Office of Fossil Energy, a subdivision of the DOE, that plays a key role in helping the United States meet the growing need for secure, affordable and environmentally friendly fossil energy supplies, is specifically seeking “novel concepts” for blockchain-based energy systems. As per the document:
DOE is currently investigating novel approaches to leverage and explore blockchain technology, initially developed within the financial sector, for the realization of robust fossil energy-based systems. In recent years, the financial world has ushered in a new wave of digital currencies including Bitcoin, which is one of the most popular [Nakamoto, 2008; Andreessen, 2014; Chuen, 2015]. Blockchain, which is the underlying infrastructure that allows Bitcoin transactions/payments to be executed, relies on an open ledger to establish trust via consensus from observers within the network [Tapscott, 2016; Lacey, 2016]. A potential example of blockchain implementation for energy systems would be envisioning nodes within sensor networks as ‘observers’ and the relevant ‘transactions’ as command signals to actuators. Implementation of a blockchain-based open ledger of all actuation commands ever made by a hardware component may then make it possible to detect and mitigate false command signals (i.e. from hackers) and other cybersecurity threats for the achievement of a robust, reliable system.
Proposals are sought to develop novel concepts for energy systems that rely on blockchain technology to assure robust systems that are less susceptible to cyber-attack. Direct use of real-time measurement data from sensor networks and/or ‘smart’ components that feature embedded instrumentation or other enabling technologies that support the industrial ‘Internet of Things (IoT)’ is strongly encouraged. Project objectives will include software development, preliminary testing to establish proof of concept, and an approach for full integration of the blockchain-based software with system hardware at lab-scale and/or pilot scale.
Blockchain Advancements in Other Government Agencies
Other US government departments appear to be migrating toward blockchain solutions. In September 2016, the Office of the National Coordinator for Health IT, a division of the US Department of Health and Human Services, announced the winners of their research paper contest with fifteen blockchain-related research papers selected as winners. Each paper suggested new uses for the blockchain to protect and exchange electronic health information.
In December 2016, the US Department of Commerce conducted a public meeting to discuss ways to create a more robust and collaborative online marketplace for copyrighted works. During the meeting, ideas were discussed that facilitated interoperability across digital registries. Other topics discussed included blockchain technology, smart contracts, metadata, standardizing rights language, and developing registries.
Governments across the globe are pursuing technological innovations that facilitate more environmentally safe and cost effective energy solutions. Blockchain technology possesses both the flexibility and security that’s needed to accomplish these objectives. As a result, Ethereum-based use cases have been implemented by energy startups in the US and the UK. In late 2016, LO3 and Siemens collaborated on a peer-to-peer proof-of-concept which successfully allowed for energy to be both bought and sold across micro-grids that utilize Ethereum-based smart contracts. Moreover, the UK startup Electron has also created a “top down” solution that utilizes Ethereum smart contracts to disseminate network resources, transparency oversight, and software protocols that accelerate UK energy sector processes. These projects coupled with the increasing popularity of blockchain technology, smart contracts, and decentralization make it possible for the Ethereum ecosystem to flourish because an adoption of Ethereum-based solutions for large-scale energy solutions by two of the world’s leading powers could set the stage for increased use cases for Ethereum in energy sectors worldwide.