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Blockchain Networks Enable Charging Incentive Programs for Utilities

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Andrew Dillon's picture
Senior Principal West Monroe Partners

Strategic leadership combining innovative solution design, business transformation, ideation and technology vision, in areas spanning IoT, electric grid modernization, transportation...

  • Member since 2019
  • 2 items added with 3,500 views
  • Sep 20, 2019 10:45 pm GMT

This item is part of the Special Issue - 2019-09 - Blockchain in Utilities, click here for more

Electric vehicle (EV) charging is emerging as one of the most interesting applications of blockchain technology as utilities seek solutions to align customer charging behavior with their operational needs. The EV charging process comprises several entities, including the utility, charging network provider, charging equipment manufacturer, vehicle manufacturer, and the end customer. Each plays a distinct role in impacting the cost and value of a charging event. To effectively influence customer charging behavior, the utility will need to acquire EV and electric vehicle supply equipment (EVSE) data and communicate with the customer, which requires utility-metering of the EV charger or collaboration with third-party vendors who hold the data. The application of blockchain technology and smart contracts can help facilitate the dynamic energy transactions involved in such a complex, trust-based environment between the utility, third-party vendors, and EV owners. 

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Customers will be more incentivized to change charging behavior if they are able to capture a portion of the value they help create. Blockchain technology provides an immutable ledger to store EV charging-event data. Smart contracts are an aspect of blockchain technology that enables the automated capture of transaction value from charging events in the form of minted incentive tokens. An example of this is providing customers with a signal to charge during times that are beneficial for load-shifting activities. Responding to this signal with altered charging behavior could provide the customer a reward in the form of a token, which they can redeem through the utility for a monetary-equivalent amount. Sometimes the customer won’t need to be actively involved in the process and can opt to allow their vehicle or charging-equipment manufacturer to coordinate directly with the utility to align the EV charging at hours that are most beneficial for the recipient of the credits. Having multiple value streams for EV charging causes traditional billing methods to run out of steam.

Traditional electronic billing processes focus on tracking kWh consumed¾a function based on a static rate schedule that in some cases includes peak-demand charges. In the emerging world of EV charging however, there are several additional parameters required to accurately reflect the cost of a charging session: location, time of day, and charging scenario, given the growing number of incentives involved. The rising crop of charging incentives that already exist include sustainability, grid load-shifting, and retail and employer incentives. The growing number of charging incentives will cause EV charging-cost calculations to become much more sophisticated in the coming years and will require novel digital solutions.

As EV adoption continues into the modern economy, it will enable new value streams for the utilities, third-party vendors, and EV owners. Blockchain-based platforms can streamline the effort required for a utility to partner with vendors, providing an enhanced customer experience through new value streams which align customer charging with their strategic and operational goals. The tokenization of these incentive credits allows for ease of auditability, machine-to-machine transactions, and distribution of value back to customers on an automated, blockchain-based digital platform.

Co-Authored with Kayvon Hosseini

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Thank Andrew for the Post!
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Matt Chester's picture
Matt Chester on Sep 23, 2019

Thanks for the insights, Andrew. I've heard a lot about how blockchain is critical and useful in these type of smart and demand side applications, but they tend to leave me wondering: would such programs be impossible without blockchain? Or does blockchain simply make them more efficient and/or optimized? If a utility is not 'on board' the blockchain train, are they completely unable to participate in these types of programs? 

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