Climate change has become one of the biggest global problems of mankind. At the same time, dependence on hydrocarbon energy sources such as coal, oil and natural gas is still strong.

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Supply lines around these energy sources are even more vulnerable to geopolitical tensions. In connection with the current sanctions against Russia, experts now expect an increase in electricity prices and negative consequences for the energy market in Europe.

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The Austrian government understands the urgent need for an energy transition and has set itself the ambitious goal of becoming climate neutral by 2040. Alternative solutions for fossil energy are slowly emerging and, for the most part, are not yet efficient enough on a large scale. . But there are promising approaches – especially in the form of decentralized renewable energy or blockchain technology in peer-to-peer (P2P) energy trading.

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There are already pilot projects in Austria related to P2P trading in the energy market. At the forefront of blockchain development is Riddle&Code and the largest Austrian energy supplier Wien Energie, which founded a joint venture called Riddle&Code Energy Solutions in 2020.

Since April 1 this year, the new head of the joint venture is Kai Siefert. Previously, he was an IT Strategist at Wien Energie and worked on the MyPower energy tokenization platform in Vienna. “cointelegraph” in German met with Siefert to ask how we can fight the energy crisis with blockchain.

From pilot project to solar tokenization

Wien Energie and Riddle&Code have been cooperating for a long time. Back in 2017, the companies launched the first project called Peer2Peer at Quartier, where they tokenized photovoltaic solar systems so that consumers can participate in energy production.

Later, at the end of 2018, when Siefert was still an IT strategist at Wien Energie, his team, together with Astrid Schober, head of IT at Wien Energie, developed a blockchain strategy and focused on the topic of energy tokenization with security tokens and utility tokens.

The result was the MyPower platform. First, Wien Energy and Riddle&Code tested decentralized trading of self-produced solar energy via blockchain in a smart city project with 100 participants. Everything went smoothly and the PV tokenization platform was launched in 2021. Riddle&Code tokenized the largest solar power plant in Austria and attracted 1,000 customers who, as part of their advertising campaign, bought energy vouchers issued by Wien Energie in the form of tokens that could be used to pay electricity bills.

MyPower is now tokenizing solar PV assets across Austria, allowing consumers to benefit from fractional ownership and invest in renewable energy.

Demand for renewable energy is huge

According to Siefert, the concept of energy sharing is now very much in demand. Due to Russia’s invasion of Ukraine and the coronavirus crisis, electricity prices are skyrocketing. Rising energy prices can be mitigated with cheaper renewable energy, smart information technology and energy sharing.

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Through blockchain-based power distribution, co-generated electricity is fed into the grid, distributed and sold directly to apartments – all without intermediaries. Unused kilowatt-hours can also be sold to other energy communities and thus consumers earn or save money.

Energy sharing can enable direct energy trading between energy consumers (energy producers and end users) who can use this approach to take control of their production and demand. People who rent their houses instead of owning them can actively participate in the transmission of energy and profit from the proceeds. This involves consumers in their own production process and prioritizes the creation of local value.

“You don’t need to buy natural gas from Russia or oil from Saudi Arabia to produce energy here in Europe,” Siefert said. “The sun comes virtually free and generates electricity reliably. But many people can’t participate because they don’t own a home, live in a rented apartment, or simply don’t have the funds to buy a large solar system. However, we can divide these factories into small digital asset tokens so that private investors with small capital can also participate in them.”

Renewables ‘come into focus’

Small renewable energy communities already exist in Austria, such as the Erneuerbare-Energie-Gemeinschaften (EEG). Such energy communities (in Austria and under the Renewable Energy Promotion Act) are non-profit legal entities designed to decentralize the production, distribution and consumption of renewable energy primarily for the public good. Such EEGs still play a small role in the production, local and regional distribution and consumption of renewable energy and are often not very profitable.

However, things are starting to unfold. Demand for EEGs has already grown significantly due to rising energy prices, Siefert says, and Riddle&Code Energy Solutions offers technical solutions for configuring and connecting such EEGs. “We can also connect them to decentralized markets with our system,” Siefert said. This is already possible with the Renewable Energy Promotion Act, which is in force from 2021 and is a European Union directive that has been transposed into national law.

Siefert noted the “growing interest in renewable energy” – in Austria, Europe and around the world. Renewable energy companies are “now getting into the spotlight” as they benefit “from the massive investments fueled by climate policy around the world,” Siefert said.

Real-time data signed and encrypted on the blockchain

At the moment, P2P energy trading is not yet allowed in Austria. Everything works on the basis of the current electricity market infrastructure, and billing data is provided by the networks 24 hours after it is measured.

But Riddle&Code Energy Solutions can already get this data in real time. The key, which can be connected directly to the smart meter, reads data in real time from the client interface and sends it through a trusted gateway – signed and fully encrypted on the blockchain. From there, this data can be read immediately. Customers can see how their credit in kilowatt-hour tokens grows every quarter of an hour.

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This data can’t be used for billing yet, but it helps drive good consumer behavior. Thanks to this data, the client can see how much green energy he has in the network from the utility plant, and, for example, use this time to turn on the washing machine or charge the electric car. This in turn affects the bill indirectly because customers pay less if they use more electricity from their common forms.

“Our goal is for everyone to be able to participate in the energy exchange,” Siefert said. “But private P2P trading is currently not possible in Austria until legal regulation is in place. That’s why I would like to see more freedom on the part of the government here and more speed in expanding renewable energy. Austria has the potential to become one of the leading countries in the EU and worldwide in terms of P2P energy trading and the development of energy communities.”

This is a short version of the interview with Kai Siefert. You can find the full version here (German).