This article is an adaptation of a publication in the proceedings of the India Smart Grid Week conference. It was co-authored by Dr. L.M. Kamp and Ing. E.M. Blom as part of ongoing research on the Responsible Innovation Systems framework.

Worldwide, 1.1 billion people lack access to electricity, of which 276 million are located in India (International Energy Agency, 2017). Kerosene and firewood are among the most used alternatives for energy and can pose serious health threats (CEEW, 2015). The introduction of decentralized energy resources, such as solar panels, provides a new set of opportunities to improve these numbers and alleviate millions from energy poverty. However, numerous examples are known where energy projects were:

• Not accepted by the communities (Ravindra et al., 2014)
• Not providing the necessary improvements in people’s lives (Fernández-Baldor et al., 2015)
• Endangered by expansion of the subsidised, and fossil fuel-based, central public grid (Comello et al., 2017).

Problem Analysis and Problem Statement

The most apparent reason for failures of energy systems seems to be that the many stakeholders involved in the innovation system, are not sufficiently aligned towards a consensus on how to form the projects. It has become apparent that there are significant influences of social and cultural values involved with energy exchange (Singh, 2017), which are often not accounted for. It stresses that a purely economic model for energy systems does not take into account the demands of a community. Additionally, the research by Comello et al. (2017) shows that problems in energy system adoption not only originate from the local level, but also arise from institutional barriers, that can only be solved by policy makers. Also, there are many technologies being proposed for use in energy systems, such as blockchain and artificial intelligence, which are still subject to extensive research and implementation barriers, requiring decision-making activities both in industries and universities. Every institution appears to be involved in the innovation processes of energy systems.

The main challenge of this research, therefore, is to determine a set of characteristics for a collective innovation process of energy systems, where all these actors from different institutional background can be included, shared objectives can be determined, role divisions instigated and collective resources created. This way activities can be aligned, innovations are more likely accepted and the rate of electrification in the world might go up. The terms co-creation and participatory programs are often found to describe such processes.

Methodology

A literature study is executed that will show what is currently known about co-creation, both in the context of India and in relation to energy systems. Thereafter, a relevant theoretical approach is presented that could guide a co-creation process.

A number of field visits to the rural parts of India are used to generate insights on the co-creation processes of energy technologies for these areas. A total of five projects by different organisations with different products are visited and examined on characteristics of the co-creation process in the perspective of the approach explained in the literature study, being:

• Smart meters, Bhodgaya (Bihar), Gram Power
• Solar home systems, Bankey Bazar (Bihar), Rural Spark
• Solar home systems, Badaun (Uttar Pradesh), Rural Spark & Simpa Networks
• Solar irrigation, Daulatpur (Bihar), Claro Energy
• Community microgrid, Buknari (Bihar), Vayam Renewable

Lastly, a synthesis of the findings is made towards a set of objectives for a co-creation process of energy systems for the context of India.

Literature Study

In this section, an overview is given on available research on co-creation processes in India, co-creation in energy systems and the Responsible Innovation Systems approach.

Co-creation in India
Across several sectors, participatory programs are found in India. In agriculture, for example, farmer participation in crop variety introduction has proven to successfully increase crop diversity (Joshi & Witcombe, 1996). However, a randomised evaluation on participatory education intervention programs in India sketches a different image. It was exposed that the results of such programs depend on the details of the intervention and the contexts. (Banerjee et al., 2010) Three interventions were researched. The results of the interventions, based on the tested level of education of the children, show that the two interventions that were mainly information-based, had negligible effect. The third approach, however, which gave a specific action-based tool, showed significant improvement. Therefore, participatory programs appear more likely to be successful if a clear action plan is provided for participants.

The demand for participatory rural energy planning in India has resulted in a new model for stakeholder’s roles, visible in Figure 1. While since then a slow uptake of energy cooperatives has taken place, such initiatives appear to have helped in reducing distribution losses and electricity theft in India, while also improving billing and revenue collection efficiency (Palit and Chaurev, 2011). However, while participatory and cooperative initiatives on energy systems in India exist, no exhaustive empirical research could be found to draw extensive conclusions on a best-practice approach, making it valuable to explore contexts outside of India with co-creation in energy systems.

Co-creation in energy systems
Already in 2003, it was found that renewable energy cooperatives in Bangladesh could form the foundation for sustainable rural development, by targeting economic, environmental and community development through the village level supply of energy (Siddiqui, 2003). A historical example from Canada, however, shows that the successful electrification of the country spanned a period of over 50 years and demanded the active involvement of rural farmers, grouped into cooperatives (Smallridge, 1999).

Since then, extensive research has been done which has shown that community investment and ownership in energy projects can have far reaching positive impact, but also experiences significant barriers, especially economically and socially (Hagget & Aiken, 2015) (Viardot, 2013). Additionally, a comparative case study of Western energy cooperatives finds that the evolving institutional configuration of an energy sector is a significant factor in the development of community initiatives, where it can both limit and enable community energy projects depending on the configuration (Oteman et al., 2014). Decentralisation of the institutional space and alignment of discourses between stakeholders generally appears to increase the chances for local community players.

It can be expected that each situation with different contextual characteristics requires a custom-made process of aligning the activities.

In an attempt to create a conceptual framework for understanding the introduction of renewable energy infrastructure in society, Wüstenhagen et al, (2007) propose to take a broad perspective, looking at political, market and societal and community acceptance. Devine-Wright et al. (2017) later suggest that each of those three need to be expanded and segmented in levels of international, national and local influence and the role of ‘middle’ actors. Middle actors influence the system both bottom-up, top-down and sideways and often across institutional boundaries (Parag and Yanda, 2014).

Koirala et al. (2016) take a next step in defining a framework for cooperation in energy systems. After a comparative analysis of different approaches of cooperative energy solutions, they propose the Integrated Community Energy System (ICES), combining the concepts of sustainable energy communities, community energy systems, community microgrids, and peer-to-peer energy. Figure 2 shows what such a system would entail. Central to the ICES is the creation of a local energy market, which would allow solar panel owners to exchange their energy and create notable extra revenues, increasing the attractiveness of buying solar panels instead of traditional grid connection. The ICES model , therefore, appears to be a good foundation that would improve the chances of local adoption of technologies, by creating local energy markets. Still, ICESs are also found to face key barriers in technological, socio-economic, environmental and institutional issues.

It appears that the same barriers keep on returning, but not a single one-size-fits-all solution can be appointed for mitigating such barriers. In complex innovation systems, with many different stakeholders, it can be expected that each situation with different contextual characteristics requires a custom-made process of aligning the activities. This is why a more holistic view needs to be taken.

3.3 Responsible Innovation Systems

A new approach towards guiding collective innovation processes is the Responsible Innovation Systems framework, which can help to align stakeholders in an evolving innovation system to come to more responsible and sustainable collective solutions (Hunink et al, 2018). The framework was tested in the rural energy technology innovation system in India, showing that it can be relevant for this case. The framework is a synthesis of other innovation approaches and consists of 3 elements, the components, relations and functions, which is presented in Figure 3 of the Appendix.

A co-creation process as proposed for microgrid design, appears to already be a suitable initial use case to apply the Responsible Innovation Systems framework.

The components element is built with the Quadruple Helix (Carayannis & Campbell, 2009), which categorises relevant stakeholders in the four institutions of government, academia, industry and the culture- and media-based public (or civil society). Each institution, defined as a rule-based societal structure and selection mechanism for decision making in innovation processes, is required to be included in the collective innovation process, so that alignment of activities might happen. Each of the institutions creates a specific type of knowledge, respectively, political, human, economic and social ‘capital’. The evolutionary characteristic is expressed in the notion that actors can also take over roles of other institutions and create multiple types of capital, effectively creating multi-institutional organisations, which often act as the ‘middle’ actors explained before.

The relations element uses the approach of Open Innovation (Chesbrough, 2006), to describe the knowledge channels within the innovation system and argues that these should be as open as possible, creating two-way communication patterns between actors. It results in a free flow of the different capitals across the institutional boundaries, evidently needed for alignment of activities.

The functions element is largely derived from research by Ranga and Etzkowitz (2013), which defined three virtual spaces that are required in a functioning innovation system, namely those of Knowledge, Innovation and Consensus, of which the latter is extended with the Responsible Innovation approach (Stilgoe et al., 2013). The Knowledge Space is formed when knowledge is created or shared between actors. The Innovation Space is formed when this knowledge is combined into new products, services or processes. The Consensus Space is formed when the ‘dimensions’ of Responsible Innovation (Stilgoe et al., 2013) are found in the activities of actors and their partners. The dimensions can be used to filter innovation processes that might lead to ‘collective irresponsibility and are defined as:

• Anticipation — Determining future visions, risks, effects, opportunities and situations. Asking the question ’What if..?’ and setting goals and targets.
• Reflexivity — A retrospective view on one’s own role and those of others, by holding a mirror up to the activities, commitments and assumptions and how this affects others in society.
• Inclusion — Participation of all relevant stakeholders that might influence innovation and are influenced by innovation, in the several phases of the process.
• Responsiveness — A capacity to change shape or direction in reaction to changing circumstances.

Only if all dimensions, of which inclusion is already embodied in the components elements, are enhanced in the activities of actors in the system and mutually shared among them, the Consensus Space will form and a responsible collective innovation process is in place. A broad intake of these dimensions is taken, allowing all forms of enhancement to be relevant. Also the dimensions are intertwined and can be in tension with each other, both positively as negatively.

Because the framework was taken to rural India for an initial case study, it has touched upon activities in practice. However, it has not fully left the academic sphere, since it has not yet been used to actually design a collective innovation process and it is subject to a number of recommendations for improvement. Still, a co-creation process as proposed for microgrid design, appears to already be a suitable initial use case to apply the Responsible Innovation Systems framework to, because the process would lend itself for constant iteration of insights along the process.

Observations from Field Visits

In this section, the most notable findings during the field visits are presented. While the interviews described were also used in the original research that instigated the Responsible Innovation Systems framework and a full analysis following the different elements should be sought in the work of Hunink et al. (2018) (still awaiting peer reviews and publication), this section takes some observations from those visits that show how the the framework can help expose relevant factors for a co-creation process of energy systems.

The smart meters in Bodhgaya, installed by a private DISCOM, had very little co-creation in them. The shop owner that was interviewed, just received this new meter one day. The smart meter had an interface that the shop owner could not access, because he did not possess a smart phone, preventing him from fully exploiting the possibilities of the smart meter platform, such as insights in consumption patterns, of which he was not even aware it existed. It shows that a lack of inclusion of the end user with the activities of the industry partners and closed communication channels, undermines the potential that these smart meters have and resulted in a lack of anticipation, reflexivity and responsiveness.

In the community microgrid In Buknari, a completely different dynamic was observed. After an initiative of a village member to create a microgrid, 43 of the 200 households expressed their willingness and ability to be part of such a grid. Together with the company building the grid, a custom design was made, taking into account the specific wishes and demands of the community showing a strong Consensus Space. A clear role division was made (reflexivity), communication channels were kept open (inclusion) and an action plan was set up in case of calamities (responsiveness). Looking at the ICES model, as seen in Figure 2, this project showed clear community generation and energy management. At the time of interviewing, 1,5 years after instalment, the villagers expressed their happiness with the system and the sense of ownership they had in the project. They were even actively involved in further innovating the system, since they were trying to persuade the company to expand the system with a running water system powered by solar panels (anticipation and Innovation Space), also showing some human capital creation. Several elements, therefore, were clearly visible. A missing element was the role of the government, showing that this successful project could be vulnerable to changes in the political environment due to a lack of political capital.

The solar home systems in Badaun exposed how such a disconnected government can play a limiting role. While nearby villages had a connection to the central grid, this particular village was not connected. Upon asking why this was, the villagers explained that in the previous election they had voted for the losing party, which has damaged the connections they had to local government. It prevented them from being included in the electrification process and forced them to individually rely on solar home systems instead, preventing the local community from having collective reflexivity and responsiveness, leaving them only to anticipate on the future. With upcoming elections, as they expressed, they would vote for the party in favour of winning, so they would be connected to the grid this time. This would mean the continuity of using and expanding the solar home systems was not ensured, all because of the closed communication and limiting role of the government.

On the contrary, the solar irrigation plant in Daulatpur showed that effective inclusion of government can help in creating a robust project. The irrigation department was explicitly involved with the design of the projects, together with the industry partner and a cooperative of farmers. The project was designed to run for five years and had all this time been going according to the plan that was set up with all those actors. The requirements of each involved institution were included and aligned, showing a strong Consensus Space. Additionally, the effect of inclusion on the other dimensions of Responsible Innovation became apparent. Initially the inclusion was high, resulting in clear role divisions (reflexivity), a 5-year plan (anticipation) and effective billing procedures executed by the farmer community (responsiveness). At the point of interviewing, however, the 5-year contract was almost ending and the farmer was not being included in any conversations regarding the continuity, resulting in doubts about his role, the future and how to respond when the contract ends.

The skill of entrepreneurship was internalised into the product, by adding a set of batteries that can be rented out.

Finally, the solar home systems in Bankey Bazar revealed what the impact can be of taking over the role of human capital creation, originally being a responsibility of the academic institution. The skill of entrepreneurship was internalised into the product, by adding a set of batteries that can be rented out. Users of the product were found to create new competencies and generate additional income. This characteristic of the product was added after a co-creation process where they observed how people were using lamps and batteries that the company distributed amongst communities. It shows strong signs of the Knowledge and Innovation Spaces at work and has led to rapid iteration of the innovation process to better suit the needs of the end user, while also increasing the agency to come up with new solutions in using the product at their will. The Consensus Space was also visibly enhanced. The product increased the reflexivity of end users, by adopting a new role in their community of energy supplier, also creating social and economic capital. It enhanced anticipation, because the future changes to the product actively influenced their businesses. Ultimately their responsiveness increased by earning additional income and being able to structure their business model according to local situations. The ICES model is visible to a large extent, since the community takes up generation, management and storage of energy, while also creating a local energy market.

Discussion & Recommendations

The observations during the field visits show that the projects that contained more elements of the Responsible Innovation Systems framework in their (co-creation) process, could be seen to harness the potential of the situation much better and generally create solutions that are easier adapted. The sense of ownership and willingness to expand on the existing infrastructure was increased, allowing a faster innovation process to take place, with a better chance of acceptance by the end user. While co-creation was seen to potentially have meaningful benefits, this does not automatically mean that co-creation or participation is a silver bullet, as the research by Banerjee et al. (2010) showed in the literature study. Several things can be noted that might obstruct a smooth process.

Community projects are more likely to succeed when there is already a sense of community present between people.

Design of the process
An important part of the co-creation process is taking the time to get to know each other, so that the shared or conflicting values and requirements can be determined and better aligned and trust between the stakeholders can be established. However, the amount of time and resources spent can increase significantly and without results coming in, can actually reduce the responsiveness of actors. It should be recommended that a clear timeline and resource allocation is anticipated, so that negative consequences can be limited to a minimum. This does not mean that each phase and stage of the process should be designed up front and completely followed. A co-creation process rather is a iterative set of activities in which each phase and stage is dependent on the previous. The complete co-creation process, therefore, is unclear at the beginning, but two key phases should always be there, in which all institutions are at least included.

First, an exploration phase should be used to carefully create the specific shared and conflicting demands of the stakeholders in the co-creation process. It will also help define the initial necessary contents of the process. Since it is of outmost importance to know the social and cultural dynamics within communities that participate in a co-creation process, a necessary stage within the exploration phase is the ethnographic study. Here the socio-cultural context should be revealed, where values and objectives of all the different stakeholders can be determined and the right strategy towards the process can be derived. For example, Haggett et al. (2013) conclude that community projects are more likely to succeed when there is already a sense of community present between people. Conflicting interests within communities can seriously impede the co-creation process in relation to the developers building the energy system. Therefore, whenever a community sense is not there, the goal should be first to create this. Secondly, a reflection phase must evaluate the process at the end, letting all actors come together and discuss the activities, keeping an open knowledge environment and closing of the process with a clear set of deliverables.

In between these phases, the contextual characteristics of the project will determine what the rest of the process should look like. It should be evaluated whether separate stages are required and if varying involvement of stakeholders is needed. However, after each stage and phase, clear follow-up activities with an action plan should be formed, in line with Banerjee et al. (2010), to ensure that each session is processed. The action plan shall be communicated to all the stakeholders, so that they can utilise the outcomes of the sessions to a maximum, relating to the improvement of responsiveness. Additionally, it is advised that the continuous design of the process remains subjected to academic research. Since it is new terrain that is explored, research questions should be set up that see to new insights on the constant monitoring and improvement of the process.

Role of the facilitator
In the model from Neudoerffer (2001) in Figure 1, each of the required institutions, according to the Responsible Innovation System framework, is already visible, however they are only indirectly in contact with each other. This leaves the possibility of demands and requirements of each institution to be missed, overruled or corrupted. During the field visits, this model was hardly recognisable, with only the relation between villages and product manufacturers observed. The model appears static and does not allow for flexible approach towards the role division and the interaction between actors, questioning its usability.

The role of disseminator, or facilitator, is only present between NGOs and government in the model. This role, however, could be expanded to act in the middle of all institutions, including industry and academic research institutes. This could be in the form of facilitating the joint co-creation sessions, or simply to take the role of a missing institution whenever decision making on innovations is happening. Therefore, this facilitator effectively becomes the ‘middle’ actor, as described in the literature study. It would instigate a different type of process, where the initial role divisions and interactions are not predetermined, but rather evolve from co-creation in an initial stage, as seen in Figure 4. It would create a process that is able to uptake contextual influences much better and accordingly adjust.

The facilitator should be in the position to help design the process and ensure that the components of the Responsible Innovation Systems framework are included. It should organise the stakeholders, educate them about the importance of co-creation and sketch the path of the process. A large skillset on technical elements of energy systems and the Indian innovation system surrounding the development of the sector and its policies will help to fulfil such a task.

A mediator should be present during the co-creation sessions who is respected and known to all stakeholders, but not feared in such a way that the openness of the conversation is endangered.

However, communicating with rural end users should always be done by someone that is trusted by the community and has the knowledge on specific socio-cultural contexts. Taking an active role in a co-creation setting with participants that do not trust the facilitator could be more harmful than helpful, due to misjudgment of nuances, and should therefore be minimised. A mediator should be present during the co-creation sessions who is respected and known to all stakeholders, but not feared in such a way that the openness of the conversation is endangered.

It is therefore that the facilitator should allows others to take a leading role during co-creation sessions in the different phases and stages, wherever the contextual characteristics require such. In such cases, the facilitator preferably also designs the session in cooperation with that actor. Similarly, to inclusion of end users, it will increase ownership of the process among all stakeholders. However, the exact role of the facilitator is not completely clear yet and should be subjected to further research.

Local energy markets
The ICES model (Koirala et al., 2016), as shown in Figure 2, is seen as the most integrated approach towards cooperative energy grids. However, the model was said to face key barriers in technological, socio-economic, environmental and institutional issues. The Responsible Innovation Framework is meant to prevent such barriers by determining the characteristics of a collective innovation process. From the field visits, it appeared that the projects with the most signs of the elements of the framework (Buknari and Badaun), were also the ones with visible parts of ICES model. It could be a hint that a co-creation process towards an ICES that applies the Responsible Innovation Systems framework has an enlarged change of success, because it mitigates the barriers for ICES adoption. It is recommended to explore such a combination.

Conclusion

This research aimed to gain answers on what a co-creation process for the formation of energy systems in India should look like. After a literature study, several characteristics for co-creating energy systems in India were found and it was determined that the Responsible Innovation Systems framework poses as a suitable guidance for the design of a co-creation process with the help of a number of field visits. The characteristics for the co-creation process of energy systems are concluded to be the following:

• Inclusion of all four institutions of government, industry, academia and civil society from the local, national and international level.
• An open knowledge sharing environment.
• A multi-phase process with a clear timeline and resource allocation, always starting with an exploration phase and ending with a reflection phase in which all institutions are present, where each phase is dependent of the previous one and can have multiple stages.
• In the exploration phase, an ethnographic analysis of the community in which the energy system is introduced is required as a separate stage. Here, at least the sense of community within the selected group is determined.
• Knowledge production and sharing is enabled, while innovation of new products, services and processes is fostered.
• Activities for enhancement of anticipation, reflexivity and responsiveness are shared among the stakeholders of the process.
• Creation of a local energy market, following the ICES model, after which further integration in the energy system can take place.
• A flexible role for a facilitator to help design and guide the co-creation process, while also being able to step down from the leading role when the contextual circumstances require such.
• Create clear action plans for stakeholders after each stage and phase, to ensure further development.
• Ending in a consensus forming between all parties on the creation of community energy systems.

If you are interested in designing microgrids with the help of co-creation techniques, do not hesitate to reach out to us at Energy Bazaar. We can facilitate the design process and give the project an increased chance of adoption and, therefore, success.

Watch out! We are Designing our Energy Systems the Wrong Way. was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

During a Union Budget speech, The Indian Minister of Finance, Arun Jaitley, said: The government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payment system. There has been an ongoing discourse over the interpretation of these words wether this means a ban or not. Especially the following part indicates on extreme regulations towards introduction of cryptocurrencies in the society: “…will take all measures to eliminate the use of these crypto assets… as part of the payment system.” However, the government also claims to embrace blockchains. Once again it becomes apparent we are living in a complex and chaotic world full of contradictions. Whether you interpreted the words of Jaitley as a ‘ban’ or not, it shows a changing discourse in the attitude of the Indian government. Yes, of course ‘binance is still working’ and the government cannot ban the cryptos from existing, but I believe that without cooperation of governments to insert cryptocurrencies in our societies, the full potential can never be reached.

In this article we will follow the perspectives that are presented and explore what an extreme scenario of a complete exclusion of cryptocurrencies in the Indian society would mean, whilst (in the words of the government itself) still having a positive attitude towards blockchains… I know right… Contradictions all over the place.

Back in December already, the Indian government accused bitcoin of ‘being a Ponzi or pyramid scheme’. From a mathematical perspective, however, bitcoin is almost the opposite. Though there is a financial benefit of more demand, because bitcoins are scarce, there is no exponential benefit by introducing new users to use of it. Jeffrey Tucker debunked the myth in this article back in 2013 and even the World Bank concluded bitcoin is not a Ponzi scheme.

In the same statement of the accusation, the government claimed that cryptocurrencies ‘hold no intrinsic value’. Now this is where it gets interesting. A ‘cryptocurrency’ is nothing else than the representation of the perceived value of a particular function of a certain blockchain. If I value the use of smart contracts to increase my operational efficiency, I invest in Ethereum. If I value Machine2Machine transactions in the Internet of Things era, I invest in IOTA. The list goes on.. As much as cryptocurrencies are a human construct, our fiat currencies are nothing else then a human construct as well and are essentially worth nothing more then the paper it is printed on. Ironically, ‘fiat’ originates from Latin, where it is the imperative of the verb facere, meaning “to make or become.” So actually fiat currency is made up money!

Let me disclaim that I am not a particular fan of bitcoin. My respect for it, results from the fact that it was the first blockchain out there and has managed to earn its place in our society. That being said, the destined future of bitcoin appears to be the function of digital gold, with the high transaction costs and the limited supply. Bitcoin’s function and representation of value is therefore in how eager you are to have your wealth stored in the immutable distributed digital ledger.

The intrinsic value of blockchains lies not in it being money. Almost none of the +1400 cryptocurrencies listed on CoinMarketCap aim to be, or function as, a currency. They are rather decentralised trust networks, with applications far beyond the reach of digital currencies. However, the digital currency element is needed to express the public general interest in the societal function of a particular blockchain.

Is the Indian government only interested in private blockchains, opposed to public blockchains?

The Corruption Prevention Paradox

So let’s get back to the point of why the Indian government decided to make these claims, namely to battle fraud and corruption. It is true that many cases are known where bitcoin was used to handle value transaction in the criminal circuit or whitewashing. On the Dark Web, bitcoin was used as the main currency to trade drugs, weapons or worse. The Indian public sector is not unknown for its level of corruption, scoring a 40/100 in the Transparency International Corruption Index, ranking 79th. So the motives behind the negative position on cryptos, from a first impression, seem upright and should certainly be encouraged.

However, let’s look a bit closer at corruption. Vastly simplified, it can be segmented in two levels, low- and high-level corruption. Low-level corruption is the kind where police officials can be bribed not to fine you, or officials are paid to speed up the bureaucracy process for any kind of document. High-level corruption presents itself in government officials on higher positions awarding contracts to companies for bribes or the allocation of public funds to private accounts of the officials. I will try to argue that with the current Indian arguments, the low-level corruption might be prevented, but high level corruption threats remain in place and might even increase. To aid my argument, it is necessary to know the difference between public and private blockchains, which is explained below in short and can be further explored here.

Public or permissionless blockchains, like Bitcoin and Ethereum, have a public distributed ledger and the cryptocurrency accompanying it is the means to participate in the blockchain protocol, whatever function it may have. Being public and distributed allows for the tracking of every transaction that has ever happened, while anyone can inspect the transactions, potentially finding patterns. While fraudulent transactions are not automatically labeled as such, they are out in the open visible to anyone. This is the reason why Dark Web users have recently been unmasked by tracking bitcoin payments. Executors of high-level corruption should be terrified of public blockchains, because with some investigation, all their transactions are out in the open. It must be noted that there are also public ledgers that specifically focus on privacy, such as Monero and Zcash, with which it is easier to hide your fraudulent transactions, but more on that later.

So, remembering the current arguments l, it seems that the Indian government is going against cryptocurrencies, that are an inseparable result from public blockchains, but at the same time embraces blockchains. Is the Indian government only interested in private blockchains, opposed to public blockchains? Private blockchains are owned by an institution, which controls the users of the blockchain and determines the form of auditing whether transactions are valid, which could be an advantage for internal auditing of the ecosystem operating on the blockchain and will result in less low-level corruption. This application can come in handy for complex supply chain management of products and goods, for example. However, full transparency is not desirable, making citizen-auditing impossible. It would also allow the high level corruptors on the level of the blockchain design to continue their business as usual and potentially even increase their activities, since now they rule over the rules of the system.

So if the government favours private blockchains, what would that mean? Shortly said, it is only interested in decentralisation whenever there is still centralised control by a single entity. It will not allow the public to decide whichever function of blockchain they value most, because then such cryptocurrency needs to be openly traded and used as a form of payment in society, which is exactly what the government aims to eliminate.

Change the culture, not the tools.

‘Banning cryptocurrencies because there is fraud’ follows the same logic as ‘banning the internet because there are hackers’, which not surprisingly, is being tried in India as well (and yes I know the internet still works). The quick fix to ban something that is new and difficult to handle can almost be called an Indian tradition. However, humanity has always found ways to break or bend the rules, regardless of laws and regulations. It is true that privacy blockchains like Zcash and Monero are now on the radar of criminals, for easy and private transactions of money. However, in this ever growing world of privacy data breaches, isn’t the function of privacy something worth to our societies too? What the Indian government should rather focus on is changing the culture of corruption, rather than limiting tools that could be used for it.

Not only would this make sense, if the tools were only used for bad purposes, but it becomes even more true now those same tools are also promising to pose solutions to some of the biggest world problems, many of which are completely in line with the Indian government’s agenda and targets.

At Energy Bazaar, of course, we are looking into the possibilities of using blockchain to increase the access to energy for the Indian population. However, we are not alone in our good intentions. Stellar Lumens is aiming to bank the unbanked, the World Food Programme has been using blockchain-based solutions to battle hunger with refugees and Tykn is trying to provide people in conflicts zones with a blockchain verifiable identity which might help them in the event of fleeing there country. Such projects are impacted by the words of mister Jaitley and it is difficult to accept that such discourse which is not based on facts allows the cryptoworld to tremble as it has done this week. Still, as cryptocurrency experts in India explain:“When a platform as significant as the Union Budget speech mentions cryptocurrencies, it is clear that the sector is coming of age. We welcome this positive development, and see it as an important milestone in the journey to policy- clarity and consumer-education”.

Concluding, it appears that, with an Indian ban on cryptocurrencies, the high-level governmental corruption in the country is not prevented and perhaps even strengthened, paradoxically to the motive of wanting to prevent corruption and fraud. This paradox in itself should already be enough reason to strive for smooth inclusion of cryptocurrencies in the Indian society. With the observation that at the same time many projects with good intentions are severely negatively impacted by the ban, the choice of words are even more debatable. The Indian government could really take its responsibility in banishing corruption by using public blockchains and cryptocurrencies, rather then just private ones, and change its culture of corruption once and for all. New institutions for our societies are being built and we all need to accept that they are going across borders.

Why an Indian Ban on Cryptocurrencies would be a Mistake. was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

The debate on the choice of becoming a specialist or a generalist is not new, and no doubt my career choices were affected by it. So I just chose to have both skills. Policy analyst skills to be a generalist with overview of major industry domains and programming skills to be a specialist with clear focus on AI and Blockchain related development.

Through various projects I was able to realise these skills together through personally initiated research projects such as assessing the education system of Turkey and understanding how reservation systems surrounding caste can be improved in India. However, the Hack4Climate hackathon, one of the events during the COP23, was the first situation where I could combine these skills. It brought together people from all backgrounds in policy, design and programming to create solutions in fighting climate change.

To reach Bonn, I decided to avoid a flight and took a 10 hour bus ride(because carbon footprint!). After the tiring ride, I realised I was missing my luggage, I took the tram in wrong direction, debit card didn’t work and I had to walk for 40 minutes in rain and 3 degrees. Despite this rough start, the experience i gathered during the next week would become one of my best experiences I had this year.

Introduction to COP and Hack4Climate

In layman terms, COP is a climate change conference, where country delegates meet, negotiate and discuss how to combat climate change. There are three major strategies for combating climate change: Adaptation, Mitigation and Resilience. This year, Fiji hosted the COP (administratively), while the city of Bonn was the physical host. The discussions primarily involved post-2020 strategies to meet the Paris agreement goals. Some very nice overviews of the outcomes with concerns (e.g. Japan’s strategies towards coal and achievements like Gender Action Plan) of the COP23 can be found here and here (by ECO).

H4C was the first ever hackathon aimed at climate change solutions using the technology of blockchain. 100 top-notch hackers were selected from across world. Blockchain as a technology took a central position in this hackathon. It is the technology which laid the foundations for bitcoin, allowing information to be stored on a distributed ledger. It helps people or machines to do transactions more securely and on a trusted platform. For more details, what blockchain is and how blockchain can be used for example for healthcare, decentralised energy trading, etc. read this great blog by Yvo Hunink, this blog by Ashay Tejwani, and another blog by Melissa Mokhtari. Five main challenges were presented, namely tracking of emissions (supply chain), carbon pricing, distributed energy, sustainable land use and sustainable transport. Of course, I chose distributed energy.

Energy Island

Our team’s focus was to explore how renewable energy can be traded between devices at a place where there is no grid of any form (due to poverty, lack of access, etc.). This would help to prevent fossil-fuel technologies to prevail or emerge and improve climate change resilience for a region in developing countries. In 24 hr, we developed an end-to-end solution in the form of a plug-in solution for trading energy from devices to devices. At the same time, this solution would help in communities to optimise their renewable energy usage, save their bills and thus help to increase incentives for community energy trading.

The solution was composed of a real-time input from the devices communicating their production, done with a Raspberry Pi. The tariff values were also collected real-time from the ENTSOE platform. This data would be combined with the limit price that the consumer puts on their affordability (at which they would like to buy energy). Additionally, the capacity of the devices would be taken into account to develop a trading logic and based on this the transaction would be written on the Ethereum ledger. The consumer can see what amount of energy is being traded with which device in the system. The complete development of this end-to-end solution, together with the presentation, is openly available on a Github repository and can be found here.

Development of this solution did not mean solely coding for 24 hours, but also brainstorming on the business opportunities, understanding national and local policies around the devices or land usage and understanding the hardware requirements or limitations. Thus, the skills of generalist and specialist came together well into one solution at this platform.

COP23

Being an observer delegate for COP23, I was able to attend a few events at COP, such as the plenary sessions. Ministers of environment from all the countries mentioned their agendas for post-2020, which showed some interesting differences, providing the mutual goal. Nevertheless, the efforts are appreciable. The Ministry of environment from India talked about saving their coastal areas at risk, as Fiji did. The focus on Renewable energy was expressed in mitigation measures at urban centers, sustainable waste processes, a better regulated transportation sector and industrial plants. However, poverty eradication remained the most important goal for India, while inclusive sustainable lifestyles are maintained. The Netherlands made promises on erradicating gas usage by 2030, which was commendable. There were other comments released, from countries such as Suriname, Mongolia and Congo, on sustaining their green forests.

What is concerning is the absence of statements from the USA at central level and actions of Japan in signing treaties on coal plants with other countries. But the hope for a greener and better future continues with COP 24, a Polish-Fiji hosted event and COP 25 in South America with an important role for developing countries in these conferences.

The COP can be really intimidating with so many influential people around. I thought COP23 would be a relief as it was my second COP (Marrakesh experience), but oh boy.. I realised that each COP was not only intimidating in a positive way, but also a bundle of many other emotions, ranging from amazement to shock! If you are also interested to join COP as an observer delegate, it is best to reach out to various NGOs admitted at UNFCCC.

Though this blog is a very personal experience, I think it would be really helpful for people to understand how cool COPs actually are, and why it needs involvement and opinions from more youth across the world.

For coming up with an end-to-end solution, we formed a team with specialist from all genres and I would like to thank them all: Hardware specialist Alexander, Front end specialist and integrator Thulasi, Smart contract developer Qianchen, Business specialist Manuela, I was handling the trading logic/ predictive algorithm development. Thanks to Riccardo Volpato as well for coming to last minute rescue! My personal motivation to be part of this team was very much influenced from my work at Energy Bazaar, where we try to build decentralized platform for energy trading using block-chain to the households with issues of energy access. The solution was built together with support and challenge statement from Selber community project by Michael Butzer and Nick Beglinger.

Thanks to the YES-DC team who made it possible for two years in row for me to attend the COP events! Thanks to Hack4Climate team for the amazing arrangements. Finally, thanks to Dirk van den Biggelaar and Yvo Hunink for being my moral boosters.

The winners of the hackathon are the team members of gainforest, who created amazing architecture for “fighting rainforest deforestation by intelligently rewarding, while empowering caretakers with a cutting-edge proof-of-care consensus system and suite of AI-powered conservation tools.”

Coding & Policy making for Climate. A delightful Combination was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

I want to thank Pranav Burnwal, Riccardo Volpato, Sergey Nam (NAMedia Digital), Sarathram Subbaraman, Rob de Jeu, Steyn Verschoof, Dirk van den Biggelaar and Rhythima shinde for their drive this month in creating work to be proud of.

The future depends on what we do in the present — Mahatma Gandhi

3 deliverables. A pitch deck, also visible below, a technical demonstration and a draft white paper. The results of an October of work.

Did we win? …Nope

Were we disappointed? ….Yes!

Are we discouraged? …Of course not!

So what now? It depends on what we do today!

Today we reflect.

We call out to all stakeholders to reach out to us if you want to be included in this process.

What did we learn this month?

Creating real new overseas virtual relations. The hackathon team is still actively communicating with each other, showing the good working relations that were kept. While many learning points came up, the overall workflow was timely managed and the meetings were fun!

Learning from each other. Between various disciplines in our team, the knowledge gaps were big. The members of the team specialising in energy, where required to translate the process of energy exchange to the developers that actually built the smart contracts. The developers in turn, showed the energy experts new ways of dealing with the same problem. As Rob de Jeu says:

“I learned what Blockchain can do in the energy sector, I became familiar with terms like smart contracts and tokens. Most importantly I have learned that there are many business models to be created.”

What do you think could be improved?

Therefore, we need to look at who won and what they have done better. To give credit where credit is due, here are the winners of the ‘energy’ track.

Geagora has a further developeded mechanism design, that is clear. This means, it focuses much better on the technical aspects of actual tokenisation in the video and the processes within its ecosystem.

Yet, Energy Bazaar is learning. Dirk van den Biggelaar has now published this blog, explaining the technical aspects of our decentralised marketplace. Also, the word mechanism design was not even known to us until after the hackathon. For those who want to be learning with us, some reading on what mechanism design actually is can be found here. The difficult thing is that in our mechanism design, stakeholders from government, industry, civil society and academia need to be included in the innovation process as Yvo Hunink’s blogs show. We call out to all stakeholders that want such inclusion.

What will the future of Energy Bazaar be?

As our team member Riccardo Volpato noticed:

“Many players are moving into the decentralised energy market. Energy Bazaar should found its own niche and focus, perhaps working together with Indian institutions, to work its way out of the jungle.”

This niche has now become very clear to us. Our market was recently validated by Powerledger going to India. Still, Energy Bazaar provides a very different focus, thinking more from the people and the society they create and maintain. Rhythima Shinde’s latest blogs, together with more evidence from Abhigyan Singh at TU Delft, show that there is more at stake on the local level. Social and cultural values cannot be ignored in a future electricity system design.

We will now start designing the first pilot project and will be organising a co-creation workshop, where all stakeholders are included, shared objectives are be envisioned, efficient role divisions are constituted and collective resources are created… Wanna join?

Next up, Hack4Climate! Rhythima shinde and Dirk van den Biggelaar will be representing Energy Bazaar there this month, so see you there!

Blockchain For Social Impact Hackathon — The Energy Bazaar Experience was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

This blog follows the introductory blog on laying out the issues and approach on integrating social dynamism with energy exchange platforms. This blog reflects on the social, national and local policies which needs to go hand in hand with adaptation of the energy exchange.

Based on the first blog, where I discuss why energy exchange needs to integrate social dynamism, I will outline several policies which would improve integration. Before I will introduce you to the policies, I will outline different types of solar energy projects.

• First, there is solar energy exchange, which can be done by simply exchanging energy from peer to peer (which are called “exchange” projects here).
• One example of this is SolShare, where households exchange energy from one house to another. Another example of a exchange project is where energy is directly shared by renting out batteries, similar to what Rural Spark does.
• Second, there are microgrids with a centralized unit of production and handled by one main operator. Energy is distributed to households from this central unit. Finally, there are also hybrid systems, where exchange projects and microgrids can live together, meaning microgrid infrastructure in the community exists, while the exchange of energy between households can also happen.

Within all of these different exchange projects, there is a wide variety of stakeholders who are active in energy exchange and all of them have a very important role in enabling the energy exchange. The following figure will make this chaos a bit clearer, but note that this is a merely an example and cannot be generalized towards all communities.

Based on these projects and given stakeholders, different policies are developed. These policies are product of extensive interview rounds with the stakeholders, development of a policy framework (institutional innovation framework) as introduced in last blog, and agent based simulations. These policies are also tested via an agent based model and the model with its results would be discussed in the next blog.

The recommendations and policies for all the energy providing firms (those who enable energy exchange platforms) are as follows:

• Switching to hybrid projects is beneficial for both exchanging projects and microgrids. Especially for the microgrids, this is more beneficial, due to the presence of physical infrastructures in form of transmission lines and arrays of solar panels/ energy producing sources. Exchanging (and SHS) projects would face heavy investment initially, but a higher number of consumers would help in payoff and thus both projects should invest in it.
• Introduction of the central grid has heavy impacts, but reliable products and contracts can help here on introduction of central grid connection. The latest possibilities of PPA (Power purchase agreements) by central government, can help arrange these contracts. However, these PPA are static agreements and Energy Bazaar comes here to provide dynamic agreements using smart contracts as the technology base.
• Laggards are the customers which accept any innovation at the end (or after a very long time since introduction of the technology). In case of energy market related innovations, they are usually left out as the system becomes costly or get upgraded and they have no income or basic technology to accept it. Thus, they can be included using pay as service model and in-house manufacturing. Pay as service means that they can pay for the technology they are using in form of services like operations on the microgrid. This would help solve the issues of affordability in poor rural areas. Lessons are drawn from Barefoot college for in-house manufacturing, incorporating community knowledge development, and women empowerment.
• The payments done to either of the projects: microgrids, or existing exchange projects are constant i.e. the tariffs are fixed for each. Thus, we introduce demand wise payment. It means that based on the demand, the tariff changes, e.g. if the demand is high, the costs for energy are higher than when it is lower. Usually the lower demands are close to the poor income groups and if a household has lower income then they cannot pay a high tariff for energy. The demands only increase if the household can afford it. Thus, demand wise payment helps reduce demand-income gap i.e. a household pays as per their demand and income, only. For example, a microgrid can be only used when the demands are high enough. What this means is that when the demands are low, people stick to exchanging platforms, and as it goes too high, microgrids come into picture for energy provision. As microgrid only works for higher costs, the cost for microgrid energy is higher than exchanging. This also means people who usually cheat with microgrids, would not do it, because of higher costs, preventing cheating which is common for microgrids failure. Such payment systems would be possible at Energy Bazaar platforms.
• Available resource and individual requirements are important parameters to decide usage rules: These usage rules are the compensation, prioritization (distribution) or constraint rules for usage of the resource in the community, increasing the profits and access of the resources. Refer to the first blog to understand what usage rules and utilities mean in this context

Recommendations specifically for the microgrid energy providing firms
The stakeholders map and relations are a bit different here, as shown in the following figure.

• When a community puts its energy produced in a livelihood, it is called community energy. This community energy is usually developed once and not nurtured further i.e. the growth of such community energy platforms are not a priority. This leads to steady decline of the community energy based livelihood options by community. It is important to have a steady growth in community energy systems, meaning there should be a constant influence from a livelihood organisation and they should serve as economic hub for good of the community. This is important to prevent a decline in number of producers and consumers.
• Prioritization rules mean that the energy needs to be distributed as per the supply and demand gap. If the demand is too high and the supply low, the priority needs to be given to some households more than others e.g. the hospitals and community places would get more priority. The prioritization rules of important energy sources should be installed: In cases of emergency, distribution from community pool should be used. If these rules are not present, it might lead for the community to completely stop using the resource.

Recommendations specifically for energy exchanging projects

• Variety of the products should be experimented. Energy variety doesn’t have any effect on the number of producers, buyers, but the effect on profits might be different. For example, in the case of Rural spark, the more modular products have helped to cater to different demands more easily.
• Cashless payments would have a severe positive impact on the profits of the energy providing firms, because this would save a lot of hassle and time-investments for the energy provision firms.

Recommendations for local governments (with collaboration of energy providing firms)

• Use more cooperative shops and anonymous exchanging to prevent discrimination between castes and sects in the community. Cooperative shops are community owned collaborating shops between households, where many people contribute and divide the profits. The collection of the small sections of society as one entity is always perceived to have more status than individual. Such collections makes people look in the weaker/ smaller section of society with more status.
• Policy impacts should be considered: policies can lead to generation of unanticipated demands of energy, benefits and problems, which should be kept in mind. For example, policy of in-house manufacturing might lead to new community hub development and increased connectivity, and thus, such effects should be considered.
• Delays in the administrative and energy distribution related processes need to be avoided. The demand for energy can change rapidly within a community, and delays in parallel processed lead to a loss in the trust of the services. Thus the processes of testing and registrations should be integrated with project deployment and design. This need a steady formal regulation from the governments

Interested to know how we integrate these policies in our work at Energy Bazaar? Follow our Medium blog, follow us on Linkedin and join our slack community if you have similar interesting ideas to share!

The complete research on this topic can be read at the TU Delft repository. Readers are asked to look at the executive summary for a complete idea of the work in given limited amount of time. I would like to thank Yvo Hunink , Dirk van den Biggelaar, Rob de Jeu, Steyn Verschoof and Vinay Bhajantri for their input on the blog. I would like to also thank Rural Spark, CEEW, Piconergy , Barefoot College, SolShare and TU Delft for providing resources for the research.

Why Energy Exchange without Social Dynamics will fail was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

This blog is first in the series to understand integration of social dynamics in energy exchange platforms. The blog lays out the issues and approach on integrating social dynamism with not just policies, but also in the software of the energy exchange platforms.

The reason for this is that India is very complex in terms of its people, with different social, cultural and economic backgrounds of households within and outside the communities. What will work in one village, might not work in the next. These backgrounds vary so much temporally and spatially, that one single solution is impossible for all. For example, even with the presence of energy exchange platform, there is a high chance that people would not be ready to exchange energy due to differences in castes, economic status, or simply, affordability issues. This affects the sustenance and success of the energy exchange projects. One of such project in making is Energy Bazaar, where we bring decentralized energy exchanges to rural Indian households, with grid optimizations and control.

Thus, provided an energy accessibility solution which Energy Bazaar brings, there needs to be an additional layer of “social dynamism” which makes a solution custom made for the respective community. This means incorporating the social norms of the community within the offered energy exchange platforms. These social norms are not restricted to the preference for a community (e.g. caste, religion divide), but the implications of social norms reflect on other characteristics of projects as well (e.g. preference of paying mechanisms).

Now let’s understand how this is actually done. All the existing solutions look at either supply side issues, meaning the perspective from the energy provider, or they focus only on the demand side issues, meaning the consumer perspective. None of them focus their solution on a community level. This approach tries to understand how communities can adapt a solution as a whole. This takes in the approach of developing the policies with the dynamic community systems and around formal-informal regulations (or institutions) present in the community.

In my masters thesis in policy analysis at TU Delft, I worked on this problem and came up with a framework, which tries to model how regulations or rules can be adapted around the changing community. The framework works on two principles:

1. Understand that how technologies get adapted in a community with the principle of “innovation diffusion”
2. Understand that how changing desires, social-economic characteristics of communities and the technologies affects the actions of the people. This in-turn affect interactions of people in the community and finally impact the energy exchange projects.

Such an ideology of community level actions was first brought by Nobel Laureate and economist Elinor Ostrom (Ostrom, 2015). In fact, she worked with rural communities of India to showcase the need of such community management influences.

The former influence can be exemplified as follows: a consumer takes the decision to buy solar panels only after hearing the benefits of the solar panels from a neighbor. Next to the positive feedback from peers, they also need to consider their own constraints (income, etc.) and then the consumers decide to buy the solar panel or not. These effects help understand a household as a function of it’s choices, influences, constraints and demands. All these functions define a “utility” function for the consumer. This makes every household as an “Agent” in the network which has its own utility function defined. Agent-based models help here to model and simulate such networks and understand that how such communities would interact together. Thus, developing agent-based models from such systems help to test out various policies and social structures of a community. These agent based models and policies would be discussed in further blogs.

The latter influence (how interactions of households in such networks effect energy exchange) can be studied through understanding the exact patterns of interactions within the community, and the different actions of the households around energy usage that help them to take decisions. These influences are found to affect the “utility” at three levels:

1. Individual
2. Community
3. Energy Providing Firms

The household, when considering the individual utility, tries to tweak the regulation around their own actions or energy usage patterns. For example, if the battery starts performing worse with time due to continuous usage of the appliances, the households use the appliances in intervals and not continuously. These rules can be simply labeled as “individual rules.” Note that the utility I discuss here is not purely gained or reduced by money, but also dependent on relationships and other social relations (higher trust in the community is higher utility of the household). The utility also can be “exchanged” with not just money but even goods, e.g. payment-in-kind is very common in many parts of rural India.

Households, especially rural, live in close communities and thus also think about the good of community, leading to better usage rules of resources. For example, in case of an energy exchange platform, if the demand is too high than the available supply, there is need to prioritize the most important demands, such as hospitals, schools etc. Thus every household, or the node on this energy exchange network, needs to have some form of “weight”. Note that these weights already exist in the communities, like with castes, making anonymity of nodes in the network important as well (such policies will be discussed in next blog in this series). These rules are defined based on the gap between the resource and community utility and are labeled as “usage rules”. The following image clearly shows how usage rules differ according to the resource (energy) in the system compared to demand.

Finally, it is also important for the energy providing firms to bring regulations and be more flexible in terms of the dynamism of the community. For example, when the households are not able to pay, they need to have options to borrow money, or extend the duration to pay, and so on. This flexibility in regulations should not come at the expense of running the project (e.g. losses on the operations) and thus such flexible regulations need to be recorded on the exchange platform. These rules are labeled as “top-down rules”.

All in all, these policies and regulations reflect that looking at all the households equally and as “rational agents” would not help incorporating the exact demands of the communities, especially in rural India when the societal norms are strong, and the economic distribution is diverse. This idea is also proposed in famous literature for markets designs (Kirman, 1991).

There is need of considering every household differently. This can be done with modeling every household as an “agent” in a network. Artificial intelligence based computational models and negotiation platforms can help test different policy scenarios for such heterogeneous networks. Here AI helps in defining automated negotiations between households. Most important thing to consider here is that as much there is need to consider the collective action of the people (taken together to save resources, etc.), it is also important to look at the action of individual actor. This is so because collections of individual usage actions lead to immense influence on the energy projects (even if the actions are independent of each other).

All of these agents would exchange energy to maximize their own “utility”. AI based learning can also help predict the energy markets in terms of availability of energy and prices, based on the exchange histories. This agent-based modelling and AI prediction mechanisms which help consider the social dynamics of every agent and will be incorporated in the final products of Energy Bazaar. How this is done (with glimpses of codes and results being worked in ETH Zurich Computational Social Science lab) will be discussed in the following blogs in this series.

Summarizing, the community and individual level policies around energy usage needs to be well understood at a very individual household level to utilize the maximum potential of energy exchange platforms. The game-theoretical approaches used in Energy Bazaar platform integrates very well with these social dynamism based models and thus Energy Bazaar can provide a complete sustained solution for energy exchange in rural India.

So now, the final question remains that how all of this can look integrated at the block-chain level: this can take various forms. One of the cases how we envision is that Energy Bazaar would have not just monetary value coins, but also “social value” coins. What this means is basically every participant has a wallet with different values of the tokens they can trade and it is not limited to the energy they are trading, but also the social cost they incur (losing relations from community reduces their social value coins and doing operations and maintenance for the community micro-grid increases these coins). These coins can compensate each other in different ratios e.g. the social value can have same or lower or higher weight than the energy exchange coins’ value. One of the other ways is also to allow people to not just sell, buy energy but additionally “rent” or “loan” energy allowing more flexibility to households at an energy exchange platform. This helps in realising the energy access and democratisation pillars at Energy Bazaar. The work of Power for All in India is already commendable in this field of energy access and we look forward to contribute in similar direction.

Interested to know how we pull off all this? Follow our Medium blog, follow us on Linkedin and join our slack community if you similar interesting ideas to share!

The complete research on this topic can be read at the TU Delft repository. Readers are asked to look at the executive summary for a complete idea of the work in given limited amount of time. I would like to thank Yvo Hunink , Dirk van den Biggelaar and Rob de Jeu for their input on the blog. I would like to also thank Rural Spark, CEEW, Piconergy , Barefoot College, SolShare and TU Delft for providing resources for the research.

References:

Ostrom, Elinor. Governing the commons. Cambridge university press, 2015.

Kirman, Alan, and Annick Vignes. “Price dispersion: theoretical considerations and empirical evidence from the Marseilles fish market.” Issues in contemporary economics. Palgrave Macmillan UK, 1991. 160–185.

Why Energy Exchange without Social Dynamics will fail was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

This article is the result of a thought experiment during the online course at edX of ‘Co-Creating Sustainable Cities’ from The TU Delft, Wageningen University and Amsterdam Institute for Advanced Metropolitan Solutions (AMS Institute). It asked a set of questions, for which the topic of discussion was chosen to be New Delhi, India.

City Indices. Using an index is a very popular way to contrast the environmental performance of cities. Often, it is actively used by cities to promote their homes to tourists, business or investors. However, some indices measure the same cities, but not always have the same cities at the top of the charts. How do these differences come to exist and what is the result of the potential usage of such indices? A set of questions were set up, to which any city can be reflected. In this case, New Delhi was chosen, where I studied, worked and lived for three months.

In at least which sustainability rankings is your city included?

New Delhi is at least mentioned in the Cities in Motion, Sustainable Cities, Global Green Economy and Asian Green City Indices. They measure the following groups of indicators:

Cities in Motion Index: human capital, social cohesion, economic, public management, governance, environmental, mobility and transport, urban planning, international outreach and technology. IESE Business School

Sustainable Cities Index: people, planet and profit. Arcadis

Global Green Economy Index: leadership & climate change, efficiency sectors, markets & investments and environment. Dual Citizens

Asian Green City Index: energy, environmental governance, buildings, CO2, air quality, water, waste & land use, transport. EIU & Siemens

Is your city performing well? In which domains of the urban fabric is the city doing well, and in which domains is it doing poorly?

The scores are not high, especially in the indices that include more demographic indicators, showing that New Delhi is not performing really well. In two of the indices it is at the bottom of the scorecard. In the other two indices, it is more in the middle.

• 174/181 Cities in Motion
• 97/100 in Sustainable Cities
• 23/50 in Global Green Economy
• ‘average’ in the Asian Green City

Are there significant differences between the scores of the city in different sustainability rankings (if applicable)? If so, how can these differences be explained?

Already, clear differences can be noticed, especially where there is more influence of more demographic input. The Global Green Economy, focusses more on the planet-profit topics, whereas the people oriented indices score significantly lower. IT suggests that Delhi should be better on economic indicators. In the Cities in Motion report, however, New Delhi on scores low on the economy indicator, as can be seen in above image. This is a clear contradiction of expected result.

Also, in the Asian Green City index compared to the Sustainable Cities index, a contradiction can be found. In the first, strong results were found in the waste category. Only 147 kg of waste per inhabitant is generated, being the least amount of waste in the index. In the report, this was accounted to Delhi’s “traditional culture of careful consumption”. Delhi introduced numerous policies to reduce, re-use and recycle waste, demonstrating just how much can be achieved with limited resources and popular support. Surprisingly, on the indicator of waste in the Sustainable Cities Index, New Delhi scores quite low.

It appears no clear line of indicators can be found, seriously questioning the usability of such indicators to influence decisions on policy design. It might be explained from the presence of complex situations, where multiple objectives can lead to different desirable states, which influences the use of specific indicators. Industry requires another set of outcomes and maintains another set of values then, for example, Government.

How did the city authorities respond to the outcomes? Is the city using this ranking in marketing the city to (potential) residents and firms? Or, alternatively, is it downplaying, ignoring or contesting the results?

Naturally, these are not numbers to be shouting of the rooftops. Therefore, there is no mentioning found from the New Delhi government in a desk study of searching for comments. On a first impression, it appears to be ignoring the numbers in communication on the internet.

Is there any evidence of citizens or companies using these rankings to demand change? And how are they pursuing this goal?

The media, inevitably a reflection of civil society, does use numbers like these for story-making. On YourStory (a blog site for entrepreneurs and change makers), Nikitha Sattiraju has posted a blog where the result of New Delhi on the Sustainable Cities Index was discussed. She wrote the following:

Our population will increase tremendously in the coming decades, and unless we work towards creating a sustainable environment today the problems will pile on. It is imperative that the government works toward removing administrative and infrastructural hindrances. We should follow the example of sustainable European cities and focus on energy-efficient, eco-friendly and inclusive growth.

Also Dr. Munish Raizada wrote a piece in a news article once. He was critical and action-driven, quoting:

Looking at the results of Arcadis survey, the road to making Delhi a better city is next to impossible unless some drastic and reformative actions are taken. Delhi needs to be resuscitated in a fast yet steady manner. Rather than patch up work, a collaborative and comprehensive development agenda involving cooperation between the Center and the state needs to be put in place to develop a better Delhi.

Taking all your findings into consideration, is this what you had expected? What is most surprising to you?

Looking at the air quality and the overal logistics of the city, that I have experienced myself staying in Delhi, I was not surprised by the results. The World Health Organization states that New Delhi is the most polluted city in the world, clearly this is not the environment of a sustainable city. I was also not surprised that indicators generate vastly different results, because it might be expected that our world is to complex to corner in a set of indicators.

What did surprise me, was that even between indices measuring the same topics, those topics could differentiate tremendously. That waste management is found to be the highest scoring topic in one index, but found moderately low in another is arguably destructive. If a good score is used for promotion of activities, while the bad score on the same topic is ignored, activities will be reinforced that are not necessarily the best outcome for society.

What use is this information for Energy Bazaar?

Because of such widely varying results, it is advisable to use an exhaustive approach towards indices, using input from several for making design decisions. This is a lesson for Energy Bazaar, generated from the Academic sphere of activities, being incorporated in other parts of the project, such as impact measurement on policy advocacy. Currently, the RISE indicators have been used to determine the policy environment for legislation on energy access topics. This should be extended towards more impressions from other indicators, such as the Energy Governance Initiative.

See www.energybazaar.org for more information. Don’t forget to follow this blog for more interesting updates on our activities and join our slack community to talk directly to us and other like-minded people.

How sustainable is New Delhi? was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

See below the video explanation.

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Technical Demonstration of Blockchain-Based Energy Exchange between Two Households was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

There lies a huge potential in the combination of a local, distributed and decentralised energy market for rural villages in developing countries. In the coming blog, possibilities, challenges and their solutions are discussed.

As a student at the TU Delft, I am currently writing my Master thesis. I have a background in Systems and Control Engineering and am currently working within under supervision of the Cyber Security Group. Contact me at dirk@energybazaar.org.

With the rise of distributed energy resources, smart meters , electric vehicles and smart-grids, the future is now. Smart cities are slowly becoming a thing of the present. The first steps are already taken. Think of shared electric scooters, solar roof tops and smart household managing. These developments are in line with the current shift in paradigm of distributed systems and decentralisation; with this, a decentralised bottom-up approach rather than a top-down is much preferred, as this article will explain.

What problems are triggering this change of paradigm? With the ordinary electricity grid we all grew with, numerous problems arise due to centralisation of power supply and control. With this centralised power grid, all power generation or control is centralised at a few point in the network, think of large power plants or main circuit breakers. These critical point in a system are called single points of failure; when this points fails, the whole grid fails. A break-down in one of these place immediately results in a grid-wide power-outage. The biggest power black-out in history occurred in India in 2012 affecting 9% of the world population. Black-outs are not only happening in old centralised grids in India; Australia was hit by a storm in 2016 and damage to a transmission station resulted in a state-wide cascading failure.

“India blackouts leave 700 million without power”

- The Guardian, July 2012

With this come other constant troubles. Firstly, transmission costs are high. Resistive heat-loss in transmission cables easily amount to 20% of a energy bill. Secondly, besides inefficiency, energy ownership is non-existent in developing countries such as India; feeding back into the grid when producing a surplus of energy is poorly reimbursed in most states, or not at all in others. Billing procedures are cumbersome, often due to isolation of rural villages and the lack of a network of communications. Distribution companies (DISCOM’s) have to go door to door to make up the energy bill. And how come fraud energy theft still widespread?

We want to work towards a decentralised and distributed energy grid; democratisation of the power grid, easy access to electricity and sustainable innovation.

Why distributed systems? A micro-grid can operate autonomously, even when the main grid fails. This is because all tools that support a micro-grid are not centralised in one spot, but are neatly distributed among the grid. Micro-grids that achieve decentralisation through distribution of generation, storage and control solve the most urgent issues in grids these days. The robustness result from the lack a single point of failure, self-sufficiency from a balance between local production and energy storage capacity. With a self-sufficient micro-grid, power is produced and consumed locally and thus transmission costs become negligible. Distributed energy resources can be mostly sustainable; think of roof-top solar panels and farmer’s wind turbines that are reaching grid-parity within the coming years. This means it will be as cost-effective to use local solar power as power from a power plant.

A very important note is the tedious task of maintaining grid-stability. While single-points of failure are absent, problems in grid-stability arise in control due to distribution. An example; due to absence of a ‘infinite-bus’ aka. the rotating inertia of large turbines of centralised power-plants, maintaining frequency proves to be a problem. Made easy; solar panels do not contribute to necessary rotating mass, since they simply do not spin. We should keep this not in mind for the rest of the article.

Why share energy? Put simple, inefficiencies in the grid arise when there are peaks in electricity demand while encountering dips in supply, due to the high intermittency of solar panels and wind turbines (think of clouds or windless hours). This problem can be mitigated if the power demand is controlled, shifting energy consumption away from peak loads and thus balancing the energy consumption or through energy buffers. In modern-day micro-grids, households are typically prosumers; they produce, generate and store energy. Storage is essential for creating an energy buffer in the micro-grid; Charging during low-demand periods when surplus energy is available, while supplying the extra energy needed during peak hours, enabling an elegant tool for load-balancing and mitigating the supply-and-demand mismatch. Instead of load-balancing through urging end-users not to consume during peak-hours, we can deploy storage and create a buffer. Households communicate with the grid through smart-meters, transforming the grid into a smart grids.

One of may win-win situations could be to following; Household A can install rooftops, produce energy overday and sell the surplus energy to Household B, that recently invested in a household energy storage system. Household A can buy back the energy in the night, when dinner is cooked on a electric stove.

For this game of batteries charging and discharging in optimal configuration, we require a smart algorithm. We can give this mechanism a interface by running it as a platform or marketplace.

How to make a marketplace for energy sharing? With the accelerating implementation of distributed energy resources and the requirement of keeping distribution losses as low as possible, a conclusion can be made that local energy trading is preferred. This thesis focusses on developing a decentralised algorithm for local energy trading. Decentralised, since no central aggregator is present to manage the trade. Local, since keeping energy within the microgrid to reduces transmission costs. Hence, game-theory is introduced to supply us with this autonomous and decentralised trading mechanism. Households are represented as players and run their own optimisation on their smart-meter. As stated previously, batteries can initially run this algorithm autonomously, but efficiency can be increased by giving end-users tool to influence the game, e.g. stating the desire of a fully charged Electric Vehicle in the morning or a permanent amount of stored energy in case of emergencies.

The algorithm will need a drive. To optimise a matching supply and demand, economic revenue is optimised. To keep grid-stability, the algorithm should punish selfish drainers; e.g. if the best response of all household batteries would be to drain to entire grid of its power, supply and demand will surely mismatch and a possible grid-failure could be imminent. Revenue is only optimised in a properly functioning grid, a black-out causes the biggest loss. Conclusively, the charging strategy of the battery in household A will be an optimisation between variables;

Best response of battery = optimisation(economical revenue + grid-stability)

How to make it tamper proof in absence of a trusted third party (TTP)?Who will guarantee the algorithm is not tampered with? Without the authority of a rule-book, how can a group of players agree on the rules of the game? Surely one of your opposers will make up a rule in their own favour and win. During a game of chess with a friend, trust is created through a social-bond. In modern digital world, you deal with people you do not know on a daily basis. Rational behaviour in absence of a empathic bond is to choose for your self, and maybe even cheat. To make this situation more workable, TTP’s were introduced. Think of banks. They facilitate trust so random people can make transactions without being afraid to be scammed. Even so, thinks can go horribly wrong. So ideally, what is needed is a trust-less environment. Using blockchain, this environment is created. Blockchain gives us a decentralised data-base that is tamper-proof, where all critical information about the algorithm and ‘trade-deals’ can be stored on this data-base, and that can be run by all stakeholders in the grid making it very robust. Consensus on the algorithm, trade-deals and prices can be reached without the help of a third party.

From a less engineering point-of-view, Blockchain provides an unimaginable tool against fraud, bureaucracy and fór a more democratic and fair world. In the blog-series on ‘Can Blockchain help reduce Energy Poverty in Rural India?’, this claim is further examined.

We want to create a truly decentralised energy market, not only of transfer from A to B, but decentralised payment back from B to A as well

How is privacy maintained? Since the trade algorithm basically plays rounds in a trade game, private information about consumption patterns are exchanged. As long as there is no ID linked to this information, there is no problem. Using ring signature schemes, players can share sensitive information without the receiver being able to trace the sender. This translates into; ‘a thief could know that an arbitrary family is on holiday, but he does not know what family and cannot track down the address of that empty home.’

Pseodonomyzation: “A thief could find out that a family is on holiday, but can not track down its empty home”

When storing sensitive data on the blockchain, a similar problem arises. Zcash and Monero are blockchains where respectively the stored information is kept private and where ID-traceability is disabled, by use of ring signatures and zk-Snarks. With both levels of the system pseudonymised, privacy should be guaranteed.

Where lies the societal impact of a free energy market? With an established energy marketplace, energy can now be locally traded directly among players. It creates an additional incentive to adopt distributed energy resources, because money can be made. Since solar power is expected to become cheaper than fossil-fuel alternatives, this marketplace indirectly results in the increase in sustainability. Launching this as a platform on blockchain, the marketplace becomes tamperproof. Ownership will thus belong to the end-user. Since the platform is decentralised on Blockchain, ownership is linearly proportional to contribution. A fair reimbursement for energy supply is possible, without extra fees. With a immutable public database, transparency increases and billing/taxation becomes efficient. For every unit of energy flowing through a smart-meter, fair reimbursement can be provided. With this tokenising of energy, energy becomes an asset that can be traded for other essential commodities, enabling a smart economy. All stakeholders in the grid, micro-grid operators, DISCOM’s and end-user are all united on one platform. With this, the power grid will no longer be top-down, but more democratically owned by all.

Why is potential impact bigger in developing countries? While being a great concept, in developed countries such as the Netherlands, an decentralised energy marketplace will result in an increase of efficiency. In addition, because of the tokenisation of energy, prosumers start getting paid for what they produce. Conclusively, an economical boost.. Since services are already well provided and TTP’s are generally well trusted, a decentralised platform will merely play out as a financial bonus.

Now imagine what the impact of a fair, decentralised and tamperproof economy could be in developing countries, in countries struggling with an authoritative government or countries wanting to transform into a honest and trust-less society because fraud and corruption still are widespread issues. A leapfrog into a smart-city is perfectly possible. Introducing blockchain into a society means ownership of assets, dissolution of fraud and social inclusion.

To answer urgent questions like; how do we implement such a system in a complex societies, e.g. found in India, please be referred to the blog post of EnergyBazaar’s co-founder and expert on Social Dynamics.

Pushing the development in distributed energy resources is rendered ineffective if prosumers, now in possession of tools to sustain a micro-grid, do not have the means of transparent sharing of energy. There is no still no means and incentive for the farmer in rural India to supply back to his village the energy he produces when his solar panels are not powering his irrigation system. There is no possibility for the energy-poor to buy micro-amounts of energy for a reasonable price. There is no platform where all stakeholder can come together and provide services to maintain sustainable development and innovation.

To provide this, I co-founded Energy Bazaar, along-side with Yvo Hunink and Rhythima Sinde. With Energy Bazaar, we are aiming to make the greatest possible impact.

Engineering Decentralised Energy Markets was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.

Are you also determined to reduce energy poverty all over the world? Do you wish to share you knowledge or gain new insights in the subject? Than we have just the place for you.

Join our slack channel, where already dozens of people are collaborating to create the energy networks of the future. From Energy Bazaar, we will also use it as the platform where we do our latest updates on the progress of the project.

Send an email to info@energybazaar.org to request an invite for the channel.

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Join the Energy Bazaar Community was originally published in Energy Bazaar on Medium, where people are continuing the conversation by highlighting and responding to this story.