Harnessing blockchain opportunities in the energy sector
With the help of blockchain technology, innovations specialist Maria Rossbander is developing radical new business models for the industry at Siemens Energy – like “Automated Pay-Per-Use,” an idea that has the potential to redefine power plant operations and the relationship between business partners.
By Ingo Petz
For a few years now, blockchain has been on everyone’s lips. It’s long since become clear that the distributed database and ledger system, originally used for bitcoin, can do far more than pave the way for cryptocurrency. Today, blockchain is being used to create “smart contracts” with variables and values written directly into the code that are particular to any single transaction. It does this without an intermediary normally used to mediate contracts electronically or physically between customer and client.
There are other key advantages that make blockchain interesting for a wide range of industries: for example the nature of a decentralized system, which enables trust in a digital ecosystem without the need for middlemen, or the transparency, which gives all users of a blockchain system the opportunity to audit transactions and accurately trace stored data back along the chain to its point of origin. This holds huge possibilities for designing new business models in energy, says Maria Rossbander who advocated for the first blockchain pilot at Siemens Energy and is initiating several new prototypes.
Automated Pay-Per-Use as a new business model
To break through this dilemma, Siemens Energy has developed Automated Pay-Per-Use, which lets utilities pay for upgraded services as they’re used with a share of the price when revenue is generated (i.e., electricity is successfully sold). Blockchain ensures that the exact profit of the power plant is calculated and transferred on a pro rata basis. This means that service products which cause high investment costs (CAPEX) for companies can be shifted into operating costs (OPEX), resulting in new financing models for Siemens Energy’s products and solutions. “It’s no longer about amortizing entire costs at once,” explains Rossbander, “only costs for the installation, when necessary, and costs for each use. So, it’s possible to generate energy and at the same time calculate and pay the investment and operating costs accurately.” Such a model also means that customers and solution providers will share part of the operating risk in the future. And here is precisely where the model is revolutionary.
" The world is changing, and we have to change and adapt as well. Blockchain helps us think differently and introduce those new ways of thinking "Maria Rossbander, Strategic Marketing and Innovation Specialist at Siemens Energy
Digital identities, 3D printing andenergy trading
We meet Maria Rossbander at the Eastside Gallery, where tourists have their pictures taken in front of the old border, joggers walk through the former border strip and construction cranes bear witness to a high level of activity. It seems to be a good place to talk about a new technology like blockchain. And about its possibilities for a global company like Siemens, whose more than 170-year history testifies to the fact that one cannot ignore the future, even if one is rooted in a strong tradition.
Rossbander and other intrapreneurs are currently working on several new business models: For one, in the future blockchain could enable more secure management and storage of digital identities. Doing so would allow access control to sensitive and nonsensitive areas of power plants, to give just one example, to be fully automatically regulated. And because the identities would be stored in a decentralized system, they would inherently be safer and more secure from tampering.
For another, blockchain could fully automate the ordering and 3D printing of spare parts from a supplier. “Take gas turbines, for instance,” says Rossbander, “because they operate at high temperatures, their components are exposed to high loads and need to be replaced regularly after a certain number of operating hours. Today, sensors inside the turbines can already monitor the aging process and alert plant operators. But with blockchain making transactions transparent to all parties at the same time, signals from the turbine could be transmitted directly to Siemens Energy and trigger an order for a new spare part to be printed in the additive manufacturing workshop.”
In Spain, Siemens Energy has already launched a new blockchain platform for trading renewable energy – called e-ing3ni@ – that lets consumers select and reserve electricity from their preferred energy sources. The platform, the first of its kind, takes advantage of blockchain’s security and traceability to allow producers, consumers and retailers to manage data, access reports and buy and sell renewable energy online.
“ With the help of blockchain, we’ve developed a solution together with our customers that lets them pay for our physical products or digital solutions as they’re used. ”Maria Rossbander, Strategic Marketing and Innovation Specialist at Siemens Energy
“Blockchain technology is an enabler”
“Blockchain immediately fascinated me because the technology is an enabler,” says Maria Rossbander. “It enables completely new business models. The world is changing, and we have to change and adapt as well. Blockchain helps us think differently and introduce those new ways of thinking. It also opens up new ways of generating business, value, profit and revenue for the customer." She pauses for a moment, looks over to the cranes raising new skyscrapers up into the air. “For us as a company, it’s essential we explore these new business models, especially when it’s not just about pure technology development.”
She passes a spot where an unassailable border once stood, the wall that physically and ideologically divided Berlin. Her gaze goes to the Spree, flowing leisurely before her, then to the opposite bank, which for more than a quarter of a century was considered the unreachable West. “The fall of the wall has given me an incredible life,” she says, recalling that she was seven years old when she and her family left Magdeburg for West Germany weeks before the wall fell. She is now an acknowledged expert for new blockchain business models at Siemens Energy, where she works as a Blockchain Evangelist. Her tasks include identifying and analyzing trends in the energy sector in the Middle East or Africa and responding to them with innovative approaches.
Creating trust for common interests
“When I first came into contact with blockchain, I didn’t understand anything because it’s a very complex subject,” Maria Rossbander says and laughs. A graduate in economics, she deals with questions of innovation, transformation, development and change, especially in connection with promising new business models in the start-up scene that hold potential for future collaborations for Siemens Energy. Her professional career has taken her to Russia, Silicon Valley and Africa. So, she’s used to understanding other cultures and looking at things from new perspectives – and thus borrowing techniques or approaches and adapting them for new contexts.
In Senegal, for example, she helped develop a pioneering crowdfunding project for Siemens Energy that uses blockchain to manage donations. The project will finance a solar plant and a microgrid that will supply more than 3,000 people in Bacco Ndieme with clean electricity. “We have to rethink,” explains Maria Rossbander. “Energy is the prerequisite for creating jobs and thus prosperity. So, we have to see how we can produce electricity without large institutional investors. And our project #connect2evolve is an example of how this can work.” Donors can also use blockchain and impact tokens to track how many kilowatt-hours of clean energy are produced with each individual donation.
She is currently studying again, completing her postgraduate MBA at the Berlin School of Law and Economics. In her master thesis she’ll examine the potential for blockchain as a driving force in the digital entrepreneurship of the future. Meanwhile the sun is high in this historic place on the Spree. Maria Rossbander says: “Blockchain creates trust between parties who would normally not necessarily trust each other, which means that in the future it will be more about common interests and cooperation.” Blockchain builds transparency where there was none. Then she sets off, through a break in the wall made by history.
June 29, 2020
Ingo Petz lives and works as a freelance journalist in Berlin.
Combined picture credits: Götz Schleser, Siemens Energy