On Wednesday (Nov 21) Industrial giant Siemens announced plans to invest in blockchain-based energy solutions with blockchain developer Energy Web Foundation. Siemens is a German corporation with a focus on industry, energy, healthcare, and infrastructure, while Energy Web Foundation is a non-profit focused on commercial adoption of blockchain technology in the energy sector.  

Siemens’ announcement stated they chose to partner with Energy Web due to their reputation as the “leading alliance for blockchain developments specifically for the energy industry”. The company is currently limiting their “blockchain experiment” to two divisions of their business: Energy Management and Power Generation Services.

Siemens notes that the energy sector is moving towards “decentralised, decarbonised and digitised energy systems” and that new methods of project financing are needed. The solution to these issues, Siemens says, is the blockchain.

“Blockchain technology enables transactions in a decentralised network to be validated efficiently and securely,” the company stated in their press release. “This enables new business models of energy and flexibility trading between consumers, prosumers, producers and network operators, taking into account user preferences and network restrictions.”

Siemens says their main goal is to find new ways to store energy and develop more efficient management systems for energy infrastructure. “Ultimately, block-chain-based [sic] applications and business models could help increase the overall efficiency of future energy networks and enable new forms of asset and project financing,” Siemens noted.

A white paper published by Energy Web Foundation says the company is running a custom implementation of Ethereum. The EWF’s claims of decentralization however, have been called into question by a writer with Next Web.

“The paper claims the solution is about 30 times more efficient than Ethereum itself, but chances are this efficiency comes at the cost of true centralization,” the author writes. “Indeed, ignoring the pompous language, Energy Web Foundation’s white paper indicates the company is running yet another permissioned blockchain.”

Siemens and Blockchain

The true nature of the project remains to be seen, but for the moment Siemens is making good on their promise to invest in and support blockchain technology. The company says they are already using blockchain technology to help their customers develop new forms of energy and optimize control of energy generation and consumption. For example, in Brooklyn, Siemens is collaborating with New York start-up LO3 Energy. They have combined microgrid control solutions with blockchain technology to help consumer feed excess electricity back into the local grid where they can receive compensations directly from their neighbors.