Fostering the Energy Transition – an interview with Alex D’Elia
By Sebastian Klemm from Proofing Future
“Peer-to-peer energy sharing coupled with community solar, electric vehicle charging, storage and management of the microgrid system within a decentralised governance method would be an excellent marriage of distributed ledger technologies and equity for a more sustainable and inclusive society,” says Alex D’Elia in our interview about the DLT4EU Virtual Field Lab where he and his team developed peer-to-peer energy solutions to foster energy communities among prosumers.
DLT4EU stimulates cutting-edge distributed ledger technologies (DLTs) for public and social good by connecting the expertise of leading entrepreneurs and developers with real-world challenges and beneficiaries.
DLT4EU is led by a consortium comprised of Metabolic, Digital Catapult and Ideas for Change, with direct support and advice of the European Commission’s Joint Research Center.
Alex D’Elia specialises in mesh networks and smart grids. A member of CETRI-TIRES, he is also part of the IoT council and is actively involved in R&D on network, energy distributed and decentralised infrastructure technologies. His experience includes 15 years in wireless technologies, mesh networks, ISP, system administration, renewables, efficiency and resilience models.
Alex D’Elia founded and was president of Mangrovia.net, a company developing mesh technologies to provide distributed and decentralized communication networks in the smart city. This then gave way to his toolkit solution, which Dajie was based on. Today, Dajie is known as PROSUME, a platform implementing energy interactions on the blockchain.
Sebastian Klemm: Which deep economic reforms do we need to tackle, in order to arrive at regenerative & intragenerationally just societies that manage to live within planetary boundaries?
Alex D’Elia: Regulatory frameworks will need to be changed to allow larger adoption of distributed ledger technologies. For instance, the current regulatory frameworks do not allow consumer-to-consumer electricity trading in every European country.
New contract types and tax codes will be required – such as to decide who needs to pay for tax in peer-to-peer trading – to describe agreements between prosumers and consumers, especially when the counterparty uses the public grid.
We have the technological means to transition to a collaborative economic paradigm in countless sectors. In a world that is increasingly digital and dramatically energy-dependent, both at the household level and in industry, the energy sector transition should be a worldwide priority. Indeed, it is evident that a monopolised energy sector risks to create major socio-economic divides and geopolitical tensions.
Needless to say, our dependence on scarce and polluting carbon-based energy is the main cause of climate change. Finally, we should ensure that the energy sector meets the new challenges of digitalisation, especially in terms of ethics, privacy and cybersecurity.
Sebastian Klemm: One of the systemic issues that make our world increasingly fragile is biodiversity loss. Thus, a holistic approach for making new normative orders in support of renewable energies also requires focus on safeguarding biodiversity as a primary source of healthy ecosystems and regenerative economies therein.
Thinking about hydropower and solar power plants, wind farms and overland lines: How can efforts to protect flora and fauna be reconciled with the production of sustainable energy? How can financial incentives for renewable energy developments best be examined and monitored with regard to their subsequent environmental impacts?
Alex D’Elia: As Jeremy Rifkin outlines in his last book The Green New Deal, quote “…in the new energy practice, the electricity companies will mine Big Data on electricity consumption across each client’s value chains and use analytics to create algorithms and applications to help their clients increase their aggregate energy efficiency and productivity and reduce their carbon footprint and marginal cost.” With this in mind, we can already envision a future where sustainability will be at the core of every activity and people will reconsider the impact of their daily actions on the planet.
The Internet is converging with a digitised renewable energy Internet, where mobility and logistics running on electric vehicles are also powered by green energy, all on top of the IoT infrastructure embedded in commercial and residential buildings and industry.
The aggregate efficiency and productivity reduces our carbon footprint and lowers the marginal cost of producing, distributing, consuming goods and services and recycling waste. This should already be enough to reconsider how investments should be directed towards incentivizing renewable energy and sustainable lifecycles. Once such procedures would be in place, by building a more sustainable process and closing the loop from production to consumption, the aggregate efficiency of the system would reduce the wasted resources which are adding to the carbon footprint of our daily activities.
We are already seeing new ways of producing goods and services today, and I am positive that soon we will be able to reduce and reuse a lot more. I think it is a matter of habits, culture and knowledge. That is why I believe that there will be a lot of new jobs based on learning and teaching more sustainable living habits.
Sebastian Klemm: Why do you participate in the DLT4EU programme?
Alex D’Elia: The DLT4EU accelerator is not only an interesting programme in terms of the consortium team that constitute it, but also because of its perspective in terms of an European approach towards distributed ledger technologies and social impact.
In fact, the mentors provided by Digital Catapult, Metabolic and Ideas For Change fit perfectly to the ecosystem. We have also experienced insightful information as part of the programme, in addition to broadening our reach towards impact investors and social good conscious people and organisations.
Sebastian Klemm: What particular qualities of the DLT4EU accelerator distinguish this programme in your opinion?
Alex D’Elia: The DLT4EU consortium team, the mentors and the European approach towards innovation distinguish this programme in my opinion. Europe is positioning itself in between the hyper-liberal market approach of big corporates in the United States and the totalitarian one as proposed by the Chinese model.
I think that Europe can shape a new and fairer path to address the fundamental issues of our time like the SDGs, climate change and an equal and inclusive society.
Sebastian Klemm: What are the societal and environmental challenges that your particular project “Enabling Peer-to-Peer Energy Solutions” addresses?
Alex D’Elia: Imagine a renewable energy based economy where both the energy and the infrastructure distributing it are considered common goods. In general, we consider privacy, data protection and information security to be complimentary requirements for IoT services. This should be extended to decentralised energy platforms and infrastructures. An unprecedented wave of distributed, peer-to-peer, laterally scaled economic activities is being enabled by the Internet of Things. The corresponding infrastructures, just like streets, would be financed through taxes.
Sebastian Klemm: How do you apply distributed ledger technologies in your project to help solve these challenges for the public good?
Alex D’Elia: PROSUME promotes new energy community models, which are key in the transition to a sustainable economic model for energy production, distribution and storage based on renewables.
Peer-to-peer energy sharing coupled with community solar, electric vehicle charging, storage and management of the microgrid system within a decentralised governance method would be an excellent marriage of distributed ledger technologies (DLTs) and equity for a more sustainable and inclusive society.
DLTs in general can provide a more transparent and trustworthy support in promoting clean energy production and sustainability plans while certifying their renewable sources. This also provides a way to incentivise affordable energy provision and self-aware consumption, thus promoting a steeper transition towards a more sustainable and aware society and a stronger action on impact development. It also supports the transition to a fairer distribution of resources and a more decentralised governance of society, coupled with the regaining of ownership of public infrastructures would lead to a fairer redistribution of wealth within the well-known approach of the circular economy.
Sebastian Klemm: As you speak of “a fairer distribution of resources and a more decentralized governance of society”: Could you give concrete examples – at best on the basis of energy projects you have been involved in – where a fairer distribution and a more decentralized governance already work well?
Alex D’Elia: Every time in history when the way how energy is produced and distributed and how goods and services are transported and delivered has changed, we have witnessed a shift also in the governance of the system that runs the infrastructure.
The ones administering the economy of daily activities were taking profit from running their services across all the value chain. Renewable energy production, intercommunication as provided by the Internet, logistics and transport networks when coupled with the new interactive and smart systems made possible by innovative technologies like AI and DLT – provided through the Internet of Things – establish a new paradigm change which also affects how wealth and resources are distributed.
At the moment those administering the infrastructure – the distribution system operators (DSOs) and the transmission system operators (TSOs) – have to redefine their position when newcomers like energy service companies (ESCOs) or aggregators come into place and start to administer the local communities. The process of transitioning is proceeding at slow pace and there are only a few projects where new models are being scouted.
We are working with consortia that help municipalities who own their infrastructures to renovate their grids and build a more sustainable model. One of the first examples in this regard is the municipality of Berchidda in Italy, which is also involved in the HESTIA project.
Sebastian Klemm: Throughout the DLT4EU programme and along the bootcamps with mentoring therein: What have you been developing so far?
Alex D’Elia: We have focused primarely on our value proposition and the way we can apply our expertise towards “energy communities”. In this regard, we have focused on one hand to better promote our solution and on the other hand to find partners willing to foster energy communities, while supporting the new directives and guidelines of the European Commision. We are also finalising the development of the software tools needed for our future platform that will interface with the end-users, called “prosumers”.
Sebastian Klemm: In a previous interview, Maarja Meitern and Rolf Bastiaanssen of Bax & Company advocate a new metric called “The Local Levelised Cost of Energy” to help communities determine if the local sustainable energy system is a financially viable alternative to the cost of current centralised energy generation: “It covers lifetime costs of energy generation and distribution, divided by energy production. This measure calculates the present value of total system costs operations for the community it serves [and] differs from the known LCoE Levelised Costs of Energy, which considers only individual assets. By including transmission and distribution, the measure allows comparing smart grids, and crucially, allows comparison with current centralised energy systems.“
Do you think there is a need for a new metric for local energy to demonstrate the value of micro-grids?
Alex D’Elia: Yes, definitely! The shift from big centralised power production and control to a more decentralised and distributed exchange are demonstrating to be a far more resilient model of managing energy infrastructures. Interconnected microgrids are way more sustainable and reliable than big top-down power networks.
Until now, such systems were valued based on previous methodologies that did not take into account a more equally distributed and networked system. Rather, they were based on huge capital investments needed to acquire from the sources and supply it to the end consumers. The LLCoE metric for example seems to be a more comprehensive benchmarking model while taking into account all potential energy vectors and comparing them with actual centralised energy systems.
Sebastian Klemm: What evidence of positive impact and benefits of the DLT4EU accelerator do you see already?
Alex D’Elia: Above all, the opportunity to connect with like-minded people as well as to understand that there are new approaches other than corporate investors.
The network of contacts and the window that has opened on impact projects are a breath of fresh air when considering that our solution might be a better fit for impact investment than for standard VC capital investors.
Sebastian Klemm: In our preceding interview about DLT4EU, Alice MacNeil says: “One of my favourite experiences was with the Venture Teams as part of a Storytelling Masterclass by Hayley Bagnall of Altus Impact, as part of the Barcelona Bootcamp in November. It was rewarding to see how the teams shifted their narrative about what they were doing, from a technology-first perspective to a more social, impact-driven focus. Not only was it fun, but we learned a lot about how to tell the story of your project and the power of storytelling. DLT can be quite niche, and this kind of approach allows us to tell a better story to a wider audience, to connect DLT4EU to a more public and democratic space.”
What have been inspiring moments to you personally during the overall DLT4EU programme so far?
Alex D’Elia: The various masterclasses during the Barcelona Bootcamp in November and the mentoring sessions we have taken with some of the DLT4EU mentors were really valuable for us. But the most inspiring were for sure the moments spent together with the people from the consortium who advised and supported us during the whole process in the last six months.
Sebastian Klemm: Were there any particular developments in other Virtual Field Lab teams that also helped you?
Alex D’Elia: Unfortunately COVID-19 was reducing the possibility to interact with the other teams, but seeing how they did approach their challenges was helpful also for us. Collaboration and even only observation and exchange of knowhow is more valuable than competition and closed source approach.
Sebastian Klemm: To close the loop we need to design sustainable energy systems also sustainable in themselves – for instance by applying circular manufacturing in the solar and storage industries.
In a previous interview, Franz Hochstrasser, CEO of Raise Green, states: “The end of a solar project’s useful life can be up to 30 or even 40 years, and decommissioning systems is something that every project developer will need to consider.”
How do you tackle the issue of end-of-life solar modules with your venture PROSUME? Do you see opportunities for knowledge transfer in this regard with the DLT4EU participants in the Virtual Field Lab about Collaborative reuse of digital devices?
Alex D’Elia: Today’s power system is primarily comprised of large central-station generation connected by a high voltage network or grid to local electric distribution systems. Electricity flows predominantly in one direction using mechanical controls.
The smart grid still depends on the support of large central-station generation. Yet, it has greatly enhanced sensory and control capability configured to accommodate distributed renewable sources as well as electric vehicles and storage with direct consumer participation in energy management.
Once we have eliminated the emissions and waste of resources in the whole process from production to consumption, we still need to think about how to increase thermodynamic efficiency in every aspect of society. Reuse and recycling are definitely a must and we think that collaboration will be key in every aspect.
Sebastian Klemm: How will you sustain your engagement and project development beyond the final presentations at the European Commission in March 2021?
Alex D’Elia: Our ambition is to leverage Zenroom to make our software toolkit a “white box”, a system that can be understood by users without a technology or energy background. White Box also means open, in terms of Open Source software we use and develop as well as in terms of a modular solution that is open to further integration and adaptation. In this way, we ensure accountability on the supply side, while promoting responsible consumption, community building and awareness on the demand side.
Energy should be a common good! By going into households and addressing this aspect of daily life, we reconsider how energy is valued and accessed, and we believe we can engage and empower social groups that are less visible in the public debate – such as women, people on low incomes and immigrants.
Article originally published by Proofing Future and reproduced with express permission of its author.
