When an increasing number of rural ranchers, farmers, hobby farm owners and others in the 26 municipal districts and counties serviced by Canada’s largest member-owned utility tried to qualify for carbon credits and other incentives, the idea of using blockchain technology wasn’t the first thing that popped into their minds.
But that’s exactly how the 40 members of Innisfail, Alberta-based EQUS REA (Rural Electrification Association) LTD. will be able to start claiming an average annual payout of $100-$150 each.
EQUS, which provides electrical distribution services to 12,000 members in central and southern Alberta, surrounding the towns of Innisfail, Claresholm, Bow Island and Onoway, needed a cost-efficient way to aggregate data for renewable power users ranging from a house in one of the small towns it serves to Sylvan Lake Cheese, a gouda cheese maker located in Red Deer County.
Blockchain technology proved to be the solution.
Rick Maclise, standards manager for EQUS, acknowledges using blockchain was a new concept for him and other managers and co-op board members, but it proved to be a cost-effective way for the automation of what otherwise would be individual audits that are too costly.
“You wouldn’t do this on your own [if you had a microgen system],” he said. “For Joe Farmer it’s not worth the paperwork. But, using blockchain, all they have to do is register once.”
EQUS chief executive Patricia Bourne has been with the co-op since the early 1990s, when it had a small central Alberta presence, and now heads a co-op with a large geographical footprint and with 100 employees, providing service to farms and ranches, commercial and industrial customers and others. Bourne quickly grasped the concept of how blockchain could help co-op members claim credits, according to the company providing the service.
Making clean energy profitable
“Our focus is on making clean energy profitable,” said Prageet Nibber, co-founder of Calgary-based ReWatt Power. “We do this by using blockchain to automate parts of the operation, in order to optimize assets.”
If that sound like tech-talk gobbledygook, there might be an easier way to visualize how the blockchain approach works.
“It allows for information to be accessible to stakeholders across a network,” Nibber said. “You need a transparent system, that [also] allows for privacy.”
Maybe the easiest way to imagine it is to compare it to your online bank account. You can access that account from the same common site as a few million other customers, either from your laptop or a smartphone. Meanwhile, because you have a password and other security, you can be confident your financial information is not accessible to other customers of the bank.
Although that’s a simplified way of understanding how blockchain works, the concept is the same.
For ReWatt, which she founded along with fellow tech entrepreneur Alex Monegro, the arrival of carbon taxes and credits presented a perfect opportunity to test their belief that blockchain would be an ideal technology to help disparate entities claim those credits.
“Two years ago we started talking about using blockchain technology to do that,” she said. “Nobody cares about the how. They care about whether it addresses a problem.”
Along with technical lead Julian Wood and technologist Tarun Chari, the pair developed the blockchain platform ReWatt plans to use eventually in industries across the continent.
“We’re starting in Alberta because that’s where we’re based, but the idea is to use our model to expand across North America,” she said.
The EQUS relationship is a pilot project which ReWatt plans to have completed by the end of April. The pilot is an Energy Futures Lab (EFL) Exemplar Initiative that would not be happening had Bourne and Nibber, both EFL Fellows, not met in the lab.
Initiated in the fall of 2013, the lab is a multi-stakeholder initiative to accelerate the transition to the energy system of the future. It is powered by The Natural Step Canada in collaboration with the Suncor Energy Foundation, the government of Alberta, the Pembina Institute, Banff Centre, Alberta Real Estate Foundation, Shell Canada, ATB Financial and Landmark Group of Builders. The initiative also involves dozens more organizations in a series of innovative partnerships and collaborations.
The pilot involves using blockchain to validate the kilowatts being generated by a co-op participant, to verifying that generation, to payment to the member. “The idea is that we can aggregate the generation so a company like ATCO (Power) can accept it,” Nibber said.
There are many power co-ops and small utilities similar to EQUS scattered across the U.S. (and some in Canada), so the use of the blockchain approach could eventually lead to the award of hundreds of thousands of dollars, she said.
In the power sector, blockchain could be used to help generators of rooftop solar, small wind or small run-of-river power to apply for emissions credits, energy efficiency credits, as well as for the trading of power, she said.
As a supporter of renewable power, she said the blockchain approach also helps promote the growth of renewables.
She said ReWatt believes it can extend the use of blockchain to areas like the natural gas supply chain, helping calculate royalties, land titles and other factors.
It might also be used by larger utilities or other corporations to “reduce their back office staff,” she said.
For EQUS, which simply doesn’t have enough back office staffers to perform the calculations, audits and verification that ReWatt can, Maclise said it and the 35 or so other power co-ops in the province can now promote the expansion of microgeneration, knowing members will be able to see a financial payoff for helping to make the planet cleaner.
In Alberta, where power rates are some of the lowest in North America (lower than two cents a kilowatt-hour at times), it’s not always an easy sell, he said.
“We have some board members who say we shouldn’t be incentivizing members to add renewables, because it doesn’t make economic sense [given the low rates],” he said.
But the counter argument is that rates won’t stay low forever and, well, there is that annual emission credit payment.
“A member will say: ‘I wasn’t getting anything last year and now I’m getting $150,’” he said.