AI Reducing Cost, Increasing Revenue and Cutting Carbon
Skimming through my AI news feed today, I found two articles on how AI is being used to help manage investment. This one caught my attention the most.
The Port of Rotterdam is (becoming) a bit of a hot-bed for innovation, particularly for blockchain.
Side note: I put “becoming” in parenthesis because if, like me, your background isn’t shipping and ports, then it might not be the first place you look for innovative tech. However, if like some of my prior colleagues, your passion is boats, cargo and ships then it is absolutely known as being a place of innovation.
So what’s so special today? BlockLab (a Netherlands based Blockchain company focusing on energy and logistics) and S&P Global Platts (focusing on information and pricing for energy, commodities markets) have teamed up with the Port to develop a system that trades renewable energy, allowing the Port to utilise lower cost, local energies when the prices are better.
The project started in 2019, and today it was announced the pilot is already showing noteworthy results – cutting energy costs to the Port by 11% and improving the renewable energy supplier’s revenues by 14%.
In recent years the costs of solar and wind energy has dropped to make it comparable to, and sometimes cheaper than fossil fuels, however the biggest challenge with renewables is the peak and fall in production and demand are virtually opposite to each other. Therefore storage and just-in-time trading of renewable energies is crucial to drive down cost, increase utility and help save the planet.
The immutable audit trail properties of blockchain make it an ideal technology to solve the problem of managing, tracking, delivering, accounting and reconciling energy trades across a fragmented renewable energy supply grid. As such, there are many projects looking at the use of Blockchain in decentralised energy. One of the poster-child use-cases for decentralised energy is peer-to-peer energy trading for residential EV charging points.
This project scales down the scope, but maintains the lofty vision. By focusing on the relatively constrained ecosystem of the Port, complexities (of which there are many) can be managed and quantified, and the outcomes more easily measured.
Even when scaled down to this reduced scope, the amount of data involved in understanding supply and demand of energy, and the fluctuations of pricing in these markets is a mammoth task. Prices and information change rapidly, meaning that even the most skilled human traders would struggle to consistently beat the market. However, in this pilot an artificial intelligence trader manages the trades between solar, wind and battery storage.
Why am I excited by this?
This is in ideal use case for Blockchain, and by focusing on renewable energies, it is a digital technology that is interfacing with digital assets (after all, all renewable energy sources are connected already, unlike legacy power-stations).
In a previous article, I mused on the idea that only through changes in financial incentives will we be able to shift corporate mindsets to meaningfully move towards green practices, and this project is a good step towards that.
This project is already showing that open, decentralised technologies can help create positive commercial business cases for improved sustainability through renewable energies … and that has to be a very good thing for all.
They claim that if the project continues to be successful and can be commercially scaled, it could help cut 30 million tons of carbon emissions, from the Port of Rotterdam alone.
For more information, read the coverage on Bloomberg, here.