Energy and Utilities

Business challenge As TenneT TSO B.V. worked to manage the less predictable flow of renewable energy into its grid and reduce costly redispatch measures, it sought to manage energy transactions from flexible sources.

Transformation A security-rich, blockchain platform built by IBM using Hyperledger Fabric helps TenneT ensure the René Kermeester accuracy of thousands of energy transactions from Digital Transformation widely distributed, flexible energy sources. Lead TenneT TSO B.V.

Results “We believe that blockchain TenneT TSO B.V. could potentially form the Millions of euros basis for a new European potentially saved energy system and on costly curtailment and Integrating distributed, redispatch measures become a standard for other European countries.” Helps ensure accuracy renewable energy sources and trust —René Kerkmeester, Digital Transformation Lead, in the recorded energy transfers through into the grid with blockchain TenneT TSO B.V. a shared, distributed, secured ledger and IBM Encourages consumer participation TenneT is a leading European electricity transmission system operator (TSO) by rewarding energy contribution with headquartered in Arnhem, the Netherlands. Its main activities are in the lower energy bills Netherlands and Germany. With 22,500 km of high-voltage connections, TenneT ensures a secure supply of electricity to 41 million customers. TenneT employs approximately 3,000 people and has a turnover of EUR 3.2 billion and an asset Share this value totaling EUR 20.3 billion. TenneT is one of Europe’s major investors in national and cross-border grid connections on land and at sea, bringing together the Northwest European energy markets and enabling the energy transition. Undertaking Second, TenneT must precisely In addition to responding to these However, before integrating these balance supply and demand, or load, unpredictable fluctuations in renew- smaller electricity sources into the energy transition to guarantee a continuous supply able energy supply and demand, grid, TenneT realized that it would Europe is undergoing a wide-scale of electricity at 50 Hz, 24 hours TenneT faces other challenges. need to implement new technologies energy transition, replacing fossil a day. Unexpected surplus power For example, congestion in and to support this change and solve two fuels and nuclear power with low can exceed grid constraints, while capacity limits of the grid sometimes critical issues. Kerkmeester explains: carbon, renewable energy sources unmet electricity demand can restrict the ability for electricity to “We needed a way to manage the such as wind and solar power. The cause brownouts or blackouts. flow where needed. At times, TenneT electricity flow to and from these European Commission’s Clean must curtail the flow of renewable small, individual electricity sources. The commercial market parties Energy for All Europeans package energy into the grid in one location Furthermore, we needed a solution responsible for supply and demand sets a collective target of at least while firing up coal or gas-fired plants to accurately record and monitor ensure that right up to one hour 20 percent renewable energy by elsewhere to respond to another those energy transactions to ensure before delivery all demand and 2020 and 27 percent by 2030. area’s higher demand. The cost they actually occur as reported, and supply is balanced. In the final hour, of this redispatch process is now to use that information as a basis This energy transition is changing until the moment of delivery, TenneT approaching EUR 1 billion annually; for payment.” the energy supply chain landscape. controls this balance. TenneT either it is passed on to consumers as part Increasingly, decentralized and dis- increases or restricts electricity of the grid fee households pay in Launching an tributed smaller producers—such as supply to the grid, as needed. “In their electricity bills. farmers with a wind turbine or small the past, we could easily rely on large energy blockchain power plants to give us a bit of extra Unlike some grid operators that businesses and even consumers with TenneT found the right technology power, or ask them to produce less believe the sole solution to reducing solar panel arrays—supply electricity, to accomplish its goals in blockchain in order to secure system balance,” the need for and costs of redispatch feeding it in to the main electrical grid. and by teaming with IBM. Blockchain says Kerkmeester. “It was a very is to expand the capacity of the can help securely and intelligently predictable system.” power grid, TenneT has developed an At the same time, as René manage flows of electricity in networks additional sustainable approach that Kerkmeester, Digital Transformation with decentralized, distributed As renewable electricity generation better fits with the overarching energy Lead at TenneT, mentions, larger energy sources. fossil-fueled and nuclear power accounts for a growing share in the and utilities (E&U) goal of the energy overall power supply, the electricity plants are gradually disappearing transition. TenneT’s goal is to develop Together with IBM, TenneT has grid is becoming more volatile. “Wind as the transition to renewables con- new ways to control the volatility in a embarked on a first-of-a-kind and solar power are largely weather- tinues. He anticipates that even in the highly weather-dependent electricity implementation of blockchain dependent. There is a big impact if near future, there will be times when system by tapping in to the flexibility technology in the E&U industry in the sun does or doesn’t shine, or conventional energy sources will be that decentralized generation and Europe. The blockchain platform built if the wind does or doesn’t blow,” unable to fully meet the demand consumption offer. by IBM is a cloud-based, distributed, says Kerkmeester. “Furthermore, for electricity or provide sufficient permissioned ledger system that we also see much more volatility on “We developed an initiative we flexibility in energy production. provides an immutable record of the demand side than in the past. refer to as ‘crowd balancing,’” says transactions communicated between For example, we now have electric Kerkmeester. The aim is to source As a TSO, TenneT plays two pivotal TenneT and its energy partners. roles in the energy system. First, cars whose batteries need charging, electricity from, and store electricity the company is responsible for long- but we don’t know exactly where in, distributed flexible units such distance transport of electricity within and when that power supply will as household electricity storage countries and across borders. be needed.” batteries and electric vehicles.

2 Scalable and security-rich, it provides The sonnen batteries store energy This alternative to redispatch sources to help TenneT balance the transparency to participants on the generated by home solar panels or measures, particularly in areas of grid. The process will be transparent blockchain, in line with regulatory collected directly from the electrical higher power demand, helps reduce to the car owner, who will simply plug requirements. The platform uses grid when rates are lowest. Typically, the occurrence and associated costs in the car to charge it, as usual. When Hyperledger Fabric, a blockchain homeowners use the stored energy of increasing the energy output of TenneT needs to increase power in framework implementation and one from these batteries to power their fossil-fuel or nuclear power plants. the grid, charging will briefly stop, and of the Hyperledger projects hosted home or sell it back into the electricity It also helps boost the use of renew- the car owner will be compensated by the Linux Foundation, to verify and grid when rates are highest. able energy by decreasing the need for the interruption. The blockchain document the transaction values of to curtail wind energy generation records each car’s energy availability distributed, flexible energy devices For this project, sonnen created at times of insufficient transport and every transaction in response to integrated into the electricity grid. the sonnenCommunity, a network capacity. Homeowners benefit from signals from TenneT. of home energy-storage systems that lower electricity costs and can earn The security-rich blockchain platform form a virtual energy pool for TenneT money each time they provide their In both projects, the energy service provides the accountability that allows to tap in to. The blockchain solution flexibility to the grid. The process is providers manage their networks TenneT to team with two relatively designed and developed by IBM with transparent to the homeowner, and of distributed devices and their new renewable service providers in TenneT records the transfer of energy the blockchain ledger helps ensure relationships with their customers. the energy landscape for two initial between the grid and the flexible transaction accuracy and transpar- TenneT interacts with sonnen and implementations of a blockchain devices so that TenneT always has ency between sonnen and TenneT. Vandebron to manage payment technology-supported energy visibility into the pool of available transactions to the companies network, one in Germany and the energy and storage capacity. TenneT In the Netherlands, TenneT is based on the established market other in the Netherlands. can then use the devices to absorb working with Vandebron Energie B.V., pricing mechanisms. So the energy or discharge excess power within a marketplace provider of renewable companies, rather than TenneT, IBM® Global Business Services® is seconds when and where required, energy. Vandebron links small-scale pay their customers. providing project management and helping reduce transmission bottle- energy producers, such as farmers, blockchain and architecture expertise necks in the grid. with energy-conscious consumers. The blockchain technology to jointly design, build and launch Vandebron’s approximately 100,000 enables TenneT to manage and the blockchain initiative in close “The project is the first of its kind customers get their power from this trust the thousands of recorded cooperation with the TenneT team using blockchain technology and marketplace of more than 120 local transactions with its business and TenneT business partners. A leads the way to the future integration sources. Many of the company’s partners in the secure ledger. Global Business Services team is of renewable energy sources. We customers also drive electric vehicles, According to Kerkmeester: “Through also helping TenneT and its partners clearly see a potential to develop charging them at their homes. the blockchain, we can know at any integrate their infrastructure with the new possibilities of flexibility through time how much flexible capacity the blockchain platform. blockchain technology. Ultimately, In the Netherlands blockchain batteries have to offer. We know this helps limit the use of expensive project, TenneT will obtain flexible when they’re activated and when In Germany, TenneT is working with curtailment of wind turbines, which power from Vandebron to supple- their activation ends. All of this is sonnen GmbH, a leading manufac- is needed to stabilize the grid,” ment the power on the grid in times recorded in the blockchain. We settle turer and provider of home battery says Lex Hartman, Corporate of highest demand. Participating with Vandebron and sonnen, and and energy-storage systems. Development Officer and board Vandebron customers will make it’s up to them to settle with their member of TenneT. the flexible capacity of their electric end consumers.” cars available as distributed energy

3 Crowdsourcing Instead of curtailing the supply TenneT anticipates that positive of excess wind energy in northern results from its initial blockchain Solution components energy Germany, TenneT can store it in implementations with sonnen and • IBM® Blockchain By implementing this blockchain the network of sonnen household Vandebron will encourage other • IBM Global Business Services® for energy, TenneT is helping lead batteries. It can then draw power energy companies, aggregators the energy transition in Europe. And from those batteries as grid capacity and service providers to enter the through its crowd-balancing projects allows, delivering power to the indus- new crowdsourced energy market. in Germany and the Netherlands, trial south without having to fire up Participating companies earn money Take the next step TenneT is paving the way for con- gas or coal-fired plants there. In the each time they provide these ancillary To learn more about the IBM solutions sumers across Europe to participate Netherlands, TenneT can use electric services to TenneT. By sharing those featured in this story, please contact in the transition from fossil fuels to car batteries to help balance the grid. earnings with customers, these your IBM representative or IBM renewable energy. “We believe that companies provide a further incentive Blockchain provides the technology Business Partner. blockchain could potentially form the for people to take part in the market that can ultimately help connect basis for a new European energy and energy transition. Organizations millions of distributed energy systems system and become a standard for such as sonnen that sell enabling and sources. As a shared ledger, it other European countries,” says technologies like solar panels or solar provides a single point of truth for Kerkmeester. Citizens are eager to batteries also stand to benefit from every transaction in the chain, allow- see their power bills go down and increased consumer participation ing all parties to trust the record of to be part of the energy transition. through these services in the energy all energy flows to and from these marketplace. And energy service Using blockchain technology, sources as each transfer of energy providers such as Vandebron expect TSOs such as TenneT can better occurs. Every transaction is auditable to attract new customers and further integrate renewables into the grid and traceable. Finally, the blockchain increase engagement and loyalty in to help secure and balance the record is immutable; the blockchain their energy-conscious customer base. energy supply. The reduction platform developed by IBM helps of power redispatch measures ensure that no party can tamper could save millions of euros as the with a transaction once it has crowd-balancing network expands. been validated.

© Copyright IBM Corporation 2018. IBM Services, New Orchard Road, Armonk, NY 10504. Produced in the United States of America, December 2018. IBM, the IBM logo, ibm.com, and Global Business Services are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the web at “Copyright and trademark information” at ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.

Please Recycle EUC03028-USEN-00