Germany's blockchain solution hopes to remedy energy sector limitations

Germany in particular is interested in using DERs to drive its digital energy economy while also complying with the European Green Deal.

The Deutsche Energie-Agentur, also known as DENA - the main governmental group responsible for energy innovation in Germany - announced plans to trial a blockchain-based solution to construct a digital registry for DERs.

"This is a highly ambitious project with the goal of testing an infrastructure layer for the german digital energy system of the future. We want this project to have the biggest impact possible for the energy sector as a whole, which is why we have a highly innovative set-up."Blockchain for DER automation.

Jesse Morris, the chief customer officer for Energy Web, told Cointelegraph that BMIL will construct a digital registry for DERs in Germany.

If successfully executed, Morris explained that BMIL could serve as the basis for a wide range of DERs supporting both Germany's wholesale and retail electricity markets: "This will make it easy, efficient and low cost for any DER in Germany to participate in the energy market. Grid operators and utility providers will also gain access to an untapped decarbonized Germany energy system."

While DENA is technology agnostic, Mamel explained that DENA aims to test a solution that will be applicable to the German energy sector, which already consists of a decentralized framework with many industry players using different standards.

DENA decided to take an interoperability approach to drive Germany's energy economy, testing two blockchain development environments in BMIL. Both Ethereum and Substrate, the blockchain-building framework for Polkadot, will be applied, along with different concepts regarding decentralized identity protocols.

Jonathan Waldenfels, a blockchain engineer at Energy Web, told Cointelegraph that one problem in the blockchain space is that there are many use cases running on various different chains.

BMIL claims to be fully compliant with all regulations in the German energy sector.

Mamel noted that important questions remain, such as how to ensure that the BMIL blockchain solution is compatible with the General Data Protection Regulation, along with understanding the regulatory challenges that might come up when DENA attempts a "Full roll out" of the Blockchain Machine Identity Ledger in the German energy system.