Germany’s Sonnen Group launches a blockchain virtual power plant

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Sonnen Group has launched a new virtual power plant (VPP) in Germany that will store any excess energy that would have otherwise been lost. The VPP will be powered by blockchain technology, with the participants making payments in a digital currency.

The Wildpoldsried, Germany-based company partnered with the Energy Web Foundation, a global non-profit organization that promotes the use of blockchain in the energy sector. Sonnen will rely on EWF’s blockchain platform, with the users marketing their free storage capacity on EW Origin, EWF’s digital exchange.

Germany has been a world leader in the production of renewable energy for years now. However, it still sees a lot of the energy it produces go to waste. In 2018 alone, the European country lost 5.4 terawatt hours of renewable energy, enough to power the capital of Berlin for a year. With the country producing more energy than it needs, the wind turbines have to be switched off whenever there’s more energy than the grid can transport.

The VPP will prevent this loss of energy, with the grid operator now able to report whenever there’s demand for extra storage capacity. The EW Origin software will match this demand to the available storage capacity in the VPP, preventing the loss of the produced energy.

The transactions between the VPP and the grid operator will be processed through smart contracts on the EWF blockchain. Once the transaction goes through, the operator will pay Sonnen through the digital currency DAI.

The use of blockchain and smart contracts will allow the company to offer a smart grid that’s more efficient than the current system, Sonnen’s eServices managing director Jean-Baptiste Cornefert remarked. He stated, “With a flexibility market for renewable energies and the automatic exchange of supply and demand, we are realising the next step towards a smart grid that can deal much more flexibly with fluctuations from renewable energy. Virtual power plants such as those from sonnen are the technical building block for this power grid that has been missing up to now and can help to ensure that less green energy is lost.”

Sonnen’s parent company, the Royal Dutch Shell, has continued to invest in blockchain and clean energy. As CoinGeek reported, last year the oil giant invested in New York-based blockchain clean energy startup LO3 Energy. The startup powers P2P energy sharing platforms, allowing users to verify that the energy they use has been sourced from renewable sources.