The German language loves its compound words – individual words combined to create rich, new ones of precise and complex meaning.
This led Mark Twain to observe:
“Some German words are so long that they have a perspective.”
Dubbed bandwurmwörter (‘tapeworm words’), perhaps the longest German compound word had a grand old 67 letters:
Our current favourite compound word is Quartierstrom - ‘district power’ - the name of the project creating Switzerland’s first local electricity market.
Quartierstrom’s premise is simple – locally produced electricity should be locally consumed.
The Quartierstrom project makes a bold pitch, describing itself as:
“A lighthouse project funded by the Swiss Federal Office of Energy [that] paves the way for the future electricity supply.”
SO HOW MIGHT A SWISS VILLAGE BE A PEEK INTO THE FUTURE?
Quartierstrom’s decentralized electricity market allows solar energy to be sold from neighbor to neighbor – ticking the boxes of renewable energy, microgrids and the shift away from centralized power production to decentralized, private production.
Quartierstrom really breaks ground, however, by leveraging a blockchain-based trading system - allowing participants to actively trade energy between each other (itself riffing off the results of a previous project called LokalPower, a microgrid system built on blockchain technology).
After all the hype surrounding Satoshi Nakamoto’s 2008 blockchain brainchild, Quartierstrom represents a real-world play to blockchain’s strengths – decentralization, trust, smart contracts, security and peer-to-peer (P2P) transactions.
Combined, these allow the tracking of energy flows between local energy producers and consumers.
On the upside, Quartierstrom’s blockchain-based microgrid removes the dependency on big, centralized energy producers.
On the downside, such a system must track the real-time flows of data and transactions between multiple, local participants – with most smart meters not yet up to the task.
In effect, smart meters will have to get smarter.
In a decentralized energy market such as Quartierstrom’s, smarter meters will have to manage dynamic energy pricing and consumption, while balancing the local grid via blockchain P2P trading.
So how did the Quartierstrom project get around this problem?
Simple, they hacked the system by attaching a Raspberry Pi to each smart meter – a cheap, effective solution providing the extra computing power to upgrade smart meters to smarter ones…
…But this only points to another downside – Quartierstrom’s smarter meters weren’t certified and therefore can’t scale in the real world.
SCALING THE FUTURE
The Quartierstrom pilot may eventually answer the following questions:
Is there consumer demand for locally sourced energy?
Can technology educate people on local energy production and consumption?
Can technology build trust in local and renewable energy resources?
What are potential barriers to a trusted and open energy market?
How can technology overcome these barriers?
Time will tell.
If Quartierstrom really does point the way to the future, however, smarter meters will have to scale.
At 22i, we believe AI may be a solution.
And yes, we’re working on it.