WHITEPAPER - Energy Blockchain Network · 1.7 introducing the der project (asset) supply chain...

WHITEPAPER August 15, 2018

v0.15 Document No. WP-MVP-001

Leading the Energy Technology Convergence

The (Energy) Promise Land: A low-carbon energy future that the world doesn’t have to wait for.

Copyright © 2018 Energy Blockchain Network, Inc. All Rights Reserved.

Whitepaper - Document No. WP-MVP-001

TABLE OF CONTENTS

DISCLAIMER 4

ACKNOWLEDGEMENT 4

DEFINITIONS 5

ABSTRACT 14

1.0 INTRODUCTION 16 1.1 ENERGY TECHNOLOGY CONVERGENCE, EXPLAINED 16 1.2 THE CASE FOR DERs 18 1.3 THE ENERGY INDUSTRY TODAY 22 1.4 THE PUERTO RICO CASE STUDY 23 1.5 THE SUPERSTORM SANDY CASE STUDY 24 1.6 CURRENT DER TREND 24 1.7 INTRODUCING THE DER PROJECT (ASSET) SUPPLY CHAIN MANAGEMENT 25 1.8 THE UPSTREAM DER PROJECT (ASSET) SUPPLY CHAIN TODAY 28 1.9 THE FUTURE UPSTREAM DER PROJECT (ASSET) SUPPLY CHAIN 30

2.0 EBN ECOSYSTEM ARCHITECTURE 31 2.1 BACKGROUND AND INTRODUCTION 31 2.2 EBN ECOSYSTEM PROCESS OVERVIEW 32 2.3 EBN ECOSYSTEM VALUE PROPOSITION 36 2.4 REWARD SYSTEM OVERVIEW 44 2.5 TOKEN ANALOGIES 45 2.6 REWARDS PROGRAM OVERVIEW 46 2.7 USER INTERFACE (UI) AND USER EXPERIENCE (UX) 46

3.0 PROJECT TEAM 47 3.1 FOUNDING ENERGY TEAM 47 3.2 BLOCKCHAIN / PLATFORM TEAM 47 3.3 ADVISORY TEAM 47

4.0 HOSTS AND APPLICATIONS 48 4.1 INITIAL PLATFORM HOSTS & ENERGY APPLICATIONS 48 4.2 MARKETPLACE PLATFORM 48 4.3 VIRTUAL ENERGY MANAGER (VEM) PLATFORM 48 4.4 FUTURE ENERGY APPLICATIONS 49

5.0 SCHEDULE AND ROADMAP 50

Copyright © 2018 Energy Blockchain Network, Inc. All Rights Reserved. 2


6.0 TECHNICAL OVERVIEW 51 6.1 OVERVIEW 51

7.0 CONTACT & ADDITIONAL INFORMATION 52

APPENDIX 53 APPENDIX A 54

EBN Rewards System (Token) Ecosystem Architecture Diagram 54



DISCLAIMER This Whitepaper is for information purposes only concerning the general business plan for Energy Blockchain Network, Inc. (EBN) and the information contained herein is subject to change based on operational conditions. The information contained herein constitutes forward-looking statements and EBN makes no warranties or guarantees as to the successful implementation or achievement timeline of these forward-looking statements. The information set forth in this Whitepaper should not be relied on to make any decisions regarding the forward-looking statements and nothing contained in this Whitepaper should be construed as giving rise to a contractual relationship. The information set forth herein is subject to change, and except as required by law, EBN does not accept the obligation to publicly update any forward-looking statements or expectations based on updated and/or additional historical or future information. Please contact EBN if you have any questions or comments concerning the information contained in this Whitepaper.

ACKNOWLEDGEMENT We received phenomenal input and peer review comments from our network on the content of this Whitepaper. The value presented in this Whitepaper wouldn’t have been possible without their involvement . We are extremely grateful for everyone’s time, suggestions, input, and guidance. Thank You, Team EBN



DEFINITIONS Definition of key terms used in this Whitepaper: Baseline:

Reference to how much energy was used (or “consumed”) before a measure or intervention was installed/implemented (e.g. DER).

Commissioned DER Project (Asset):

A DER project (asset) that is fully installed and operational. For example, a rooftop solar PV system that is generating electricity that can be consumed (used) on-site and/or sold to an off-site entity (consumer or prosumer).

Consortium Blockchain:

A Consortium Blockchain or ‘Private (Permissioned) Network’ is a blockchain where the consensus process is performed by a pre-selected set of nodes or validators. For example, a consortium of 3 entities (e.g. Company A, Company B, and a main node) each of which operates a node and all 3 must sign every block in order for the block to be considered valid. The right or ability to read the varying blockchain data layers can be (to varying degrees as required) made public, or restricted to the network participants.

Consumer:

An end user that consumes energy (e.g. commercial or industrial business, residential home, municipality, etc.).

Correlate:

Initial Platform Host and Development Partner for EBN.



Distributed Energy Resources (DERs):

A DER is an asset located at the grid edge that can impact load. DERs typically include rooftop solar PV, batteries, electric vehicles (EVs), demand response (DR), demand-side management (DSM), energy efficiency, etc. Reference Industry Definition 1: Smart Electric Power Alliance (SEPA), in collaboration with Advanced Energy Economy (AEE) and Rocky Mountain Institute (RMI), defines DERs as: DERs are physical and virtual assets that are deployed across the distribution grid - typically close to load, and usually behind the meter - that can be used individually or in aggregate to provide value to the grid, individual Customers, or both. A particular industry interest centers on DERs that can be aggregated to provide services to the electric grid, such as solar, storage, energy efficiency, electric vehicles, and demand management. 1

Reference Industry Definition 2: US-based Regional transmission organization (RTO) PJM International LLC (PJM) defines DERs as: ‘Distributed energy resource’ is a term for smaller power resources – such as storage, load reductions and advanced renewable technologies – that are connected to the electric distribution system and can provide services necessary to meet power system needs. 2

DER Asset Mapping:

Application layer protocols that will create and/or update DER Asset Registry block information (attributes) based on the supply chain management state and inputs.

1 Beyond the Meter: Recommended Reading for a Modern Grid, Smart Electric Power Alliance (SEPA), June 2017. https://info.aee.net/the-basics-of-distributed-energy-resources-for-a-modern-grid-report?hsCtaTracking=fcadf6a8-83ab-45c9-be72-a0794c8c58ad%7C6992642a-0374-4da3-98dd-f1248436098e 2 Distributed energy resources: A new force in the industry, PJM International LLC (PJM), June 17, 2916. http://insidelines.pjm.com/distributed-energy-resources-a-new-force-in-the-industry/



DER Asset Registry:

Similar to the Lead Registry, every DER Asset (new and existing) will have a unique digital identity with attributes.

Developer:

The project Developer handles all project development activities from initial site surveys, feasibility studies, financial models, contracts, permits, installation, construction management, and ongoing maintenance and operations contracts. The company manages all parties within the transaction and is responsible for successful completion of the project.

Development Partners:

Businesses or entities that participate in the EBN ecosystem development.

Energy Blockchain Network (EBN):

EBN is building an ecosystem that will lead the ‘Energy Technology Convergence.’ EBN is a multi-sided platform which coordinates lead originators (sales agents/reps), engineers, developers, integrators, installers, utilities, customers, etc. to find & build distributed energy resource (DER) projects. EBN is an interoperable market coordination and network infrastructure layer for the energy industry featuring first-of-its-kind solutions.

Energy Technology Convergence:

The energy industry will see a vast degree of transformation over the next decade, and it will be primarily attributed to ‘technology convergence.’ The energy industry’s technology convergence will consist of: 1) Distributed energy resource (DER) technologies, 2) Internet of Things (IoT) (connectivity of devices), 3) Technology cost reductions, and 4) Blockchain technology. Reference EBN’s blog titled ‘Energy Technology Convergence, Explain’ for additional details.


https://medium.com/energy-blockchain-network-publication/energy-technology-convergence-explained-5b8c24ec589b


Integrator / Installer:

Integrators (or Installers) are the ones that install the system at a customer site (e.g. solar PV installer). They are a company/business that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as system integration.

Lead:

A Lead is comprised of a single or multiple DER assets. The Lead contains top-line information common to the sub-DER asset(s).

Lead Originator:

Lead Originators generate new DER leads for the energy industry, and their role is synonymous to sales agents or representatives in other industries like real estate. Reference Lead Origination.

Lead Origination:

The process of finding a new DER lead, typically performed by a Lead Originator. Reference EBN’s blog titled ‘The Value of Lead Origination’ for additional details.

Example of Lead Origination: Consider a commercial rooftop solar project. The Lead Originator has a relationship with or sparks cold-call discussions with the customer, performs at-risk marketing efforts to educate the customer, and ultimately gets the customer to move forward and investigate whether or not rooftop solar makes sense for them. This is 'Lead Origination' created by the 'Lead Originator.' It’s an incredibly time consuming and costly process, but arguably the best value for the ecosystem as a whole. Another example is a Customer looking to investigate a holistic strategic energy management (SEM) program. The Lead Originator has the upfront customer conversations that advance them to make a decision to go down the energy journey path. The Lead Originator may or may not have the technical expertise and/or resources to develop the project further. The Lead Originator may choose to "quarterback" the project or hand-off completely and move on to the next lead. The existing SSD and Correlate platforms are specifically designed to take leads and


https://medium.com/energy-blockchain-network-publication/the-value-of-lead-origination-e61cae6d65ea



curate them through the process. These platforms enable Lead Originators to do more by leveraging the network effects of existing market platforms.

Lead Registry:

Similar to the DER Asset Registry, every Lead will have a unique digital identity with attributes.

Measurement & Verification (M&V):

Process for quantifying energy savings delivered by a measure or intervention (e.g. DER). Energy savings is assessed against the ‘baseline.’

Negawatt:

A unit used to measure the amount of energy saved (in megawatts).

Origin: Provenance of a Lead or DER asset supply chain. Origin is the initial block for a given Lead or DER Asset in a registry.

Origination: The process of creating a Lead or DER asset Origin. Typically performed by a Lead Originator.

PC Token:

Pegged Currency (stablecoin or stable token) Token utilized in the EBN private (permissioned) network ecosystem or ‘Consortium Blockchain.’

Peer-to-Peer (P2P):

Interactions and/or transactions that occur between two parties in the absence of intermediary or centralized oversight. In energy, P2P is locational marginal pricing that leverages the provenance of an electron.



Platform Host: Platform Hosts are the businesses that run on top of the EBN ecosystem at the application layer. SSD and Correlate would be the initial Platform Hosts running their existing platforms on top of EBN’s platform. They serve as the initially trusted entities to the private (permissioned) network. As the network grows, new Platform Hosts will be added, vetted, and approved to be a trusted entity for their platform application. For example, future P2P & TE energy blockchain firms could run on EBN’s platform. Platform Hosts will have varying privileges or rights on the private (permissioned) network. Some will only have read access while others will be trusted gates or validators or authorities - the ones who have read/write access to the blockchain. This will be a limited group to ensure the integrity and quality of the ecosystem. SSD and Correlate will be the initial validators (or gate keeps) that the network trusts to organize, manage, and validate data. Over time, existing validators will add new validators to the trust layer so the ecosystem is always moving in a decentralized direction over time.

Private (Permissioned) Network:

A Private (Permissioned) Network or ‘Consortium Blockchain’ is a network where the consensus process is performed by a pre-selected set of nodes or validators. For example, a consortium of 3 entities (e.g. Company A, Company B and a main node) each of which operates a node and all 3 must sign every block in order for the block to be considered valid. The right or ability to read the varying blockchain data layers can be (to varying degrees as required) made public, or restricted to the network participants.

Prosumer:

Someone who both produces and consumes energy. Provenance:

Place or information of origin or earliest known history of something.

PV:

Photovoltaic.



Resiliency:

In the energy industry, Resiliency can be explained as the capacity for electrical power systems to withstand or recover quickly from difficulties such as natural disasters. Resiliency can be categorized as 1) pre-event and 2) post-event resiliency. Pre-event Resiliency: “avoid” and “mitigate” Preventative activities and robust infrastructure design/implementation in place to reduce or limit the impact to services from a catastrophic event. Post-event Resiliency: “response” and “recover” The ability to respond during, and immediately after, a catastrophic event to avoid or reduce service impact. The ability to return the service to its advertised capacity in its final state. “Final state” is key because Disaster Recovery Plans for critical infrastructure sometimes are not to rebuild facilities or equipment, they may be to transfer responsibilities elsewhere but continue to provide service.

Scout: Scout is focused on adding value to the EBN ecosystem by 1) developing new Leads and DER Assets and 2) creating new DER Asset digital identities and 3) mapping “scouting” digital identities for existing DER Assets. They have the technical expertise to work with developers to define the specifications for the project. The EBN ecosystem is specifically designed to compensate Scouts for the tremendously valuable front-end effort they provide.

Smart Contract:

Software code, based on IF-THEN statements, that can self-execute complex operations when one or more conditions are met. Allows credible execution and enforcement of contracts without third parties.

Solar Site Design (SSD):

Initial Platform Host and Development Partner for EBN.



Soft Costs: Soft costs are the non-hardware costs associated with going solar. These costs include permitting, financing, and installing solar, as well as the expenses solar companies incur to acquire new customers [lead origination], pay suppliers, and cover their bottom line. These “soft costs” are tacked-on to the overall price a customer pays for a solar energy system. 3

Technology Convergence:

Technology convergence aggregates separate technologies, creates efficiencies by capitalizing on their capabilities, opens new markets, and reduces cost. An example of technology convergence is the smartphone. The smartphone combines: the personal computer, internet, camera, video games, guided exercise, movies, tv, music, telephone, news, books, courses, maps, messaging, email, calculator, shopping, GPS— the app list is endless. The effect is to connect users with resources, networks, marketplaces, etc. that were previously unattainable and unknown.

Transactive Energy (TE):

A system of economic and control mechanisms that allows the dynamic balance of supply and demand across the entire electrical infrastructure using value as a key operational parameter. 4

Transmission & Distribution (T&D):

Centralized transmissions and distribution (T&D) system that physically connects supply and demand via wires and pole or structures. Transmission lines connect centralized power plants (supply) to substations. Distribution lines connect substations to consumers (demand).

3 Soft Costs 101: The Key to Achieving Cheaper Solar Energy, U.S. Department of Energy (DOE), Office of Energy Efficiency & Renewable Energy, February 25, 2016. https://www.energy.gov/eere/articles/soft-costs-101-key-achieving-cheaper-solar-energy 4 Transactive Energy: An Overview, National Institute of Science and Technology (NIST), U.S. Department of Commerce, April 19, 2017. https://www.nist.gov/engineering-laboratory/smart-grid/transactive-energy-overview



Value of Distributed Energy Resources (VDER):

VDER factors include the price of the energy, the avoided carbon emissions, the cost savings to customers and utilities, and other savings from avoiding expensive capital investments. VDER 5

value can also be derived from distribution network operating efficiency such as conservation voltage reduction (CVR), improvements in line-loss on long feeders or circuits, or smoothing of the load curve.

Watt: Watt is the SI unit of power, equivalent to one joule per second, corresponding to the power in an electric circuit. Consumers may notice their electricity bill rate is reported in $ per kilowatts-hours (kWh) which is simply 1,000 watts per hour. Reference here for further explanation on the difference between a watt and watt-hour.

5 Value of Distributed Energy Resources (VDER), New York State Energy Research and Development Authority (NYSERDA). https://www.nyserda.ny.gov/All-Programs/Programs/NY-Sun/Contractors/Value-of-Distributed-Energy-Resources


https://enphase.com/en-us/support/what-difference-between-watt-and-watt-hour


ABSTRACT Energy Blockchain Network (EBN) is building an ecosystem that will lead the Energy Technology Convergence. EBN is a multi-sided platform which coordinates lead originators (sales agents/reps), engineers, developers, integrators, installers, utilities, customers, etc. to find & build distributed energy resource (DER) projects. EBN is an interoperable market coordination and network infrastructure layer for the energy industry featuring first-of-its-kind solutions: 1. Rewards Program to Accelerate Lead Origination Velocity Designed to recognize and reward value associated with originating, engineering, and installing DER infrastructure assets (e.g. rooftop solar PV, batteries).

● The Lead Registry will serve as a shared, trusted, and immutable registry to facilitate compensation for the value provided by participants who originate, engineer, and install new DER projects.

● The EBN ecosystem will leverage blockchain and distributed ledger technologies to establish the early structure (via smart contracts) needed to ensure value creators are adequately recognized and rewarded (compensated) for the value they deliver.

● When programmed correctly, blockchains and distributed ledger technologies are extremely effective at exposing who in a value (supply) chain actually delivers value.

● Formalizing the process and adding real-time, autonomously triggered events (via smart contracts) will increase value for early-state work. This will drive increased participation and leverage network effects of the ecosystem leading to a large increase in DERs coming online.

2. Programmable Processes for Building Asset Registries & Enabling Use Cases Data captured during the Lead Registry process above will be used to build the DER Asset Registry so each DER infrastructure asset has a unique digital identity. Technical data will be structured in a blockchain-managed and organized DER Asset Registry, and provide an interoperable layer to coordinate information, customers, and industry activities related to lifecycle asset management and participation in the energy industry.

● The DER Asset Registry is a community registry of DER assets which will store and organize data on the blockchain to provide easy retrieval for various future energy+blockchain applications.

● The EBN platform encourages third-party application layer development and partnerships to enable existing and emerging market solutions.



With EBN, business activities are automated and managed using blockchain, distributed ledger, and smart contract technologies. The technologies are being used to enable unique, programmable methods to incentivize behavior that leverages game theory and mechanism design. The mission is to drive DER asset supply chain efficiencies and scale installations for a low-carbon future - today!



1.0 INTRODUCTION

1.1 ENERGY TECHNOLOGY CONVERGENCE, EXPLAINED The energy industry is entering the age of the ‘Energy Technology Convergence.’ The energy industry will see a vast degree of transformation over the next decade, and it will be primarily attributed to ‘technology convergence.’ Technology convergence aggregates separate technologies, creates efficiencies by capitalizing on their capabilities, opens new markets, and reduces cost. The energy industry’s technology convergence will consist of:

1. Distributed energy resource (DER) technologies 2. Internet of Things (IoT) (connectivity of devices) 3. Technology cost reductions 4. Blockchain (distributed ledger) technology

Figure 1: The Energy Technology Convergence



As part of the Energy Technology Convergence, the energy industry is already starting to see the ‘prosumer’ emerge. A prosumer is an end user of electricity who now has the option to both produce and consume electricity. Previously, an end user could only consume electricity and demand was assumed inelastic. A prosumer can now create a level of energy independence or generate new revenue streams, shifting their leverage held in the marketplace. This has been made possible by significant cost reductions and technology advancements in DERs. Simply defined, DERs are assets located at the grid edge that can impact load. DERs typically include rooftop solar PV, batteries, electric vehicles (EVs), demand response (DR), demand-side management (DSM), energy efficiency, etc. Blockchain technology is the missing component that enables Peer-to-Peer (P2P) and Transactive Energy (TE) markets for prosumers to participate. It creates the backbone (similar to the internet) and facilitates market transactions for prosumers to exchange their ‘products.’ The product can simply be kWh (unit of energy) transactions between peers, but could also include valued grid benefits such as flexibility, resiliency, reliability, deferred transmission & distribution (T&D) upgrades, etc. In P2P & TE markets, the local balancing authority, utility, and/or T&D provider will likely be a participant and compensated accordingly for the value they contribute. A recent example of technology convergence is the smartphone. As illustrated below, the smartphone combines: the personal computer, internet, camera, video games, guided exercise, movies, tv, music, telephone, news, books, courses, maps, messaging, email, calculator, shopping, GPS – the app list is endless. The effect is to connect users with resources, networks, marketplaces, etc. that were previously unattainable and unknown. This is technology convergence, and make no mistake, energy is next.



Figure 2: Smartphone Technology Convergence

History shows us that what results from technology convergence is superior than what was before, will dramatically transform, and those that build business models today will reap what they sow.

1.2 THE CASE FOR DERs Economic Value Value of Distributed Energy Resources (VDER) factors include the price of the energy, the avoided carbon emissions, the cost savings to customers and utilities, and other savings from avoiding expensive capital investments. 6

Outside this public VDER definition, additional value stacking criteria exist for reliability, resiliency, scalability, availability, etc. which are being investigated by industry for future definition and value capture implementation. Current market structures, policy, and mechanisms make it cumbersome or near impossible to unlock this value today. However, innovative new program designs (e.g. VDER program) are working to redesign markets structures and policies to implement the required value assignment mechanisms.

6 Value of Distributed Energy Resources (VDER), New York State Energy Research and Development Authority (NYSERDA). https://www.nyserda.ny.gov/All-Programs/Programs/NY-Sun/Contractors/Value-of-Distributed-Energy-Resources



In recent years, innovative blockchain energy firm startups, with P2P and TE focus, are pioneering the first blockchain based markets to assign, track, and settle these economic value transactions in real-time. The ability to track and settle economic value transactions in real-time is a game-changing innovation that will have profound effects on the energy industry. Ultimately, new P2P & TE markets will increase the value a DER asset owner receives for their asset.

Consumer Choice P2P & TE markets enable DERs and give consumers the choice to become a prosumer and/or to buy electricity based on their unique provenance preferences. Today and moving forward, the provenance of an electron matters to consumers. For example, some consumers may choose to buy locally generated, distributed renewable electricity from their neighbor versus the centralized options from a utility where either the provenance of the electron is ambiguous or renewable energy premiums are disconnected from the consumer’s value assignment. Customers today want to be empowered to make energy decisions, become energy independent, and an increasing percentage desire and value locally generated renewable energy options. Choice gives the perception of value, and consumers don’t like being locked into a few or single market options. Customer-centric business models and technologies that give customers choice, lead to increased customer conversion, loyalty, and retention.

Finally, consumers today are intimately involved with their technology (e.g smartphone & apps). In the future, consumers will want similar interactions with their energy technology solutions, upon which current centralized solutions from incumbent utilities and technologies fail to deliver.

Storm Hardening and Public Safety DERs provide local US communities with options in times of disaster. In recent years, local US communities have been faced with deadly natural disasters such as hurricanes (Katrina, Sandy, Harvey, Maria (Puerto Rico)) and wildfires (California). In these tragic and deadly times of need, local US communities need to be able to provide basic services like power for hospitals, refrigeration for medicine and food, powering pumping systems for water filtration and purification, air conditioning and heating for elderly and sick, etc. A case study of the Puerto Rico situation after hurricane Maria is explored further below as well as Superstorm Sandy.



Resiliency Resiliency is generally defined as ‘toughness,’ or the capacity to withstand or recover quickly from difficulties. In the energy industry, resiliency can be explained as the capacity for electrical power systems to recover quickly from difficulties such as natural disasters and can be categorized as 1) pre-event and 2) post-event resiliency.

Pre-event Resiliency: “avoid” and “mitigate” Preventative activities and robust infrastructure design/implementation in place to reduce or limit the impact to services from a catastrophic event. Post-event Resiliency: “response” and “recover” The ability to respond during, and immediately after, a catastrophic event to avoid or reduce service impact. The ability to return the service to its advertised capacity in its final state. “Final state” is key because Disaster Recovery Plans for critical infrastructure sometimes are not to rebuild facilities or equipment, they may be to transfer responsibilities elsewhere but continue to provide service.

DERs are inherently more 'resilient' than a centralized system that includes vast networks of vulnerable poles and wires because the poles and wires are spread across hundreds of miles of varying terrain and are at risk for compromise (e.g. storm blowing them over, car hitting them). Resiliency has an inverse relationship to the distance between the electrical supply and demand (e.g. a person’s home). For example, a rooftop solar PV plant (a DER) is generally more resilient, than a utility-scale power plant located hundreds of miles from a person’s home, and connected via easily compromised poles and wires.



Figure 3: Centralized vs. Decentralized Energy

In other words, the closer the supply is to the demand, the more resilient the design. A design with no poles and wires is more resilient. If you can plug your home directly to the power plant, it's more resilient. In this case, "power plant" can be an onsite battery (that's charged), rooftop solar PV, fuel cell or combined heat and power (CHP) (that uses natural gas from an underground line), portable diesel/gas generator, etc. Noting that the fuel source is a close second when it comes to the weakest link, the previous list is in general decreasing order of resiliency. Finally, decentralized systems, such as blockchains (distributed ledgers) and aggregated DERs, are inherently resilient to single point cyber security and hacking vector attacks. The following description is analogous to distributed computer networking environments:

One aspect of blockchain is a distributed database that hosts shared records. The database stores records in blocks rather than collating



them in a single file. Blockchains get more secure with more parties in the network, one participant networks are not especially secure. 7

Decentralized systems are comprised of many nodes and purposely lack a centralized authority that can be strategically attacked. Centralized attacks result in a high degree of damage (reference 2017 Equifax data breach in which millions of individuals had their social security numbers stolen). When the collective nodes of a decentralized system sense a given node is acting up and may be compromised, the balance of the nodes isolate the suspect node to prevent infection of the entire system. A DER + blockchain ecosystem is an example of a decentralized system which can resist large scale events like the Equifax data breach or similar vector attacks.

1.3 THE ENERGY INDUSTRY TODAY Presently we have a 'centralized' grid where power plants (the electrical supply):

1. Receive a fuel source (the sun, wind, nuclear, gas, coal, biomass, etc.); 2. Use the fuel source to generate electricity; 3. Connect to the T&D grid system (the poles and wires); and 4. Ultimately deliver the electricity to the end user's load panel (the

electric demand) 5. Include behind the scenes work by the local entity responsible for

maintaining the electricity balance within its region (Balancing Authority managing supply and demand).

What is the "weakest link" in a centralized system? Centralized power plants are robustly designed and NOT the weakest link. Centralized power plants are typically designed to operate for minimum 30 years while withstanding the most severe weather. Note: 30 year minimum is a boilerplate standard used by the power engineering industry and major engineering design firms. Cybersecurity is not included in the 30 year minimum design standard as vector attacks need to be reviewed on a continuous basis.

7 Overview of blockchain for energy and commodity trading, Ernst & Young, 2017. http://www.ey.com/Publication/vwLUAssets/ey-overview-of-blockchain-for-energy-and-commodity-trading/$FILE/ey-overview-of-blockchain-for-energy-and-commodity-trading.pdf



Rather, the weakest link is primarily the poles and wires for the reasons mentioned in the section above. As previously noted, the second weakest link is a reliable, stable and economical fuel supply. Not being able to deliver the power plant with the fuel it requires to generate electricity.

1.4 THE PUERTO RICO CASE STUDY After taking a direct blow from hurricane Maria in 2017, Puerto Rico went dark leaving 1.5 millions residents without electric power. The majority of regions 8 9

remained without power months after. Four months after Hurricane Maria [made landfall], about 450,000 of 1.5 million electricity customers in Puerto Rico still have no service. Blackouts regularly occur for hours at a time, even in San Juan. Puerto Rico’s blackout is now the second largest on record 10

worldwide. 11

Why? As expected, the power plants were unaffected and ready to supply power, however the T&D grid system was simply devastated. The robust power plants were unable to physically connect (via wire) to the user's load (people’s homes) and deliver electricity because the poles and wires were on the ground. Literally, the “link” was broke! Immediately after the storm, Puerto Rico also suffered from a lack of fuel supply. Most of Puerto Rico's power plants use oil (delivered to the island via ship), and there was an initial shortage of fuel. That issue was quickly resolved after shipping routes were restored. However, the poles and wires remained on the ground months after. Not having reliable access to power, and having to wait several months for restoration is simply not acceptable. In response to the devastated centralized grid in Puerto Rico, we’ve seen private firms like TESLA and Sonnen deploy DER technologies at a record pace. In the wake of this tragedy, the silver lining

8 Statistics Progress in Puerto Rico Hurricane Maria Update, FEMA, November 6, 2017. https://www.fema.gov/media-library/assets/images/151463 9 Grid Defection Is On the Rise in Puerto Rico, Greentech Media, February 16, 2018. https://www-greentechmedia-com.cdn.ampproject.org/c/s/www.greentechmedia.com/amp/article/grid-defection-on-the-rise-in-puerto-rico 10 Here’s why restoring power in Puerto Rico is taking so long, PBS NewsHour, January 25, 2018. https://www.pbs.org/newshour/show/heres-why-restoring-power-in-puerto-rico-is-taking-so-long 11 Puerto Rico’s blackout is now the second largest on record worldwide, Vox Media, April 15, 2018. https://www.vox.com/2018/4/13/17229172/puerto-rico-blackout-hurricane-maria



is that the world has seen the resiliency and flexibility of DERs displayed in real-time. 12

1.5 THE SUPERSTORM SANDY CASE STUDY Hurricane Sandy “Superstorm Sandy” was the most destructive hurricane of the 2012 season. A review of the events timeline emphasizes and re-enforces 13

the need for resiliency and storm hardening of our electrical infrastructure. Superstorm Sandy resulted in 7.9 million businesses and households without power, and over a 0.5 million remained without power over a week later. There were 72 recorded fatalities occurring in the mid-Atlantic and northeastern U.S. This is the greatest number of U.S. direct fatalities related to a tropical cyclone. 14

October 29, 2012 - Approaches land as a Category 2 storm. - Hurricane force winds extend 175 miles out from Sandy's eye - Three reactors experience trips, or shutdowns, during the storm, according to a Nuclear Regulatory Commission statement. October 30, 2012 - 7.9 million businesses and households are without electric power in 15 states and the District of Columbia. November 7, 2012 - More than 600,000 people are still without power.

1.6 CURRENT DER TREND Research groups and consulting firms are projecting significant growth and penetration of DERs over the next decade. According to Navigant Research, global DER capacity is expected to grow from 132.4 GW in 2017 to 528.4 GW in 2026. 15

12 Tesla Turns Power Back On At Children's Hospital In Puerto Rico, NPR, October 25, 2017. https://www.npr.org/sections/thetwo-way/2017/10/25/560045944/tesla-turns-power-back-on-at-childrens-hospital-in-puerto-rico 13 Hurricane Sandy Fast Facts, CNN Library, Updated October 19, 2017. https://www.cnn.com/2013/07/13/world/americas/hurricane-sandy-fast-facts/index.html 14 Tropical Cyclone Report Hurricane Sandy, National Hurricane Center, February 12, 2013. https://www.nhc.noaa.gov/data/tcr/AL182012_Sandy.pdf 15 Distributed Renewables, Fuel Cells, Generator Sets, Energy Storage, Microgrids, EV Charging, Demand Response, and Energy Efficiency: Global Market Forecasts, Navigant Research, 2017. https://www.navigantresearch.com/research/global-der-deployment-forecast-database



The EBN ecosystem will accelerate the current DER trend, by leveraging existing market platforms which are operational and focused on DER scaling efforts today.

1.7 INTRODUCING THE DER PROJECT (ASSET) SUPPLY CHAIN MANAGEMENT

The finance industry was the first to adopt blockchain (i.e. Bitcoin), and for good reasons, supply chain management is following finance in the adoption of blockchain. Some of the top blockchain use cases and success stories revolve around supply chain management. Everything, including DER assets and energy (kWh), has a supply chain. Similar to how the Internet infrastructure got funded early, current and future business leaders will drive capital towards DER infrastructure (assets). Referencing the figure below, notice the steep infrastructure ramp leading up to the year 2000. We’ll revisit this concept later.

Figure 4: Telecommunication Infrastructure Investment Per Capita (Source: OECD and USTelecom Analysis)

Standardization and interoperability are imperative. Establishing protocols and standards for the industry to follow will only be achieved through collaborative business case development and execution. At its essence, the blockchain revolution is about digitalization, decentralization, and



democratization, and those that build communities will unlock the most value for participants. A press release from global supply chain logistics firm, UPS, stated:

UPS sees the need to create industry standards and protocols to enable blockchain platforms to operate together with established technologies...Blockchain, a digital database using blocks that are linked and secured by cryptography, can be used to keep record of any information or assets. This includes physical assets, like transportation containers, or virtual assets, like digital currencies. 16

We can apply supply chain management strategies to DER Infrastructure Assets. Blockchain enables new actors (prosumers, consumers, lead originators, etc.) to interact and participate in the DER project (asset) supply chain in innovative new ways. Reference EBN’s blog posts titled ‘The (Energy) Promise Land, Follow Us…’ and ‘Energy Technology Convergence, Explained’ for additional details. There are two parts to the DER Project (Asset) Supply Chain:

Figure 5: Upstream vs. Downstream DER Project (Asset) Supply Chain

16 UPS Joins Top Alliance To Create Blockchain Standards For Logistics, UPS Pressroom, November 7, 2017. https://www.pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&id=1510065871593-824


https://medium.com/energy-blockchain-network-publication/the-energy-promise-land-follow-us-3b67ca6aff35

https://medium.com/energy-blockchain-network-publication/the-energy-promise-land-follow-us-3b67ca6aff35

https://medium.com/energy-blockchain-network-publication/energy-technology-convergence-explained-5b8c24ec589b


Downstream DER Project (Asset) Supply Chain Management ● P2P & TE Markets (Post DER Project (Asset) Commissioning)

A commissioned DER project (asset) is fully installed and operational. For example, a rooftop solar PV system that is generating electricity that can be consumed (used) on-site and/or sold to an off-site entity (consumer or prosumer).

Peer-to-Peer (P2P) describes interactions and/or transactions that occur between two parties in the absence of intermediary or centralized oversight. In energy, P2P is locational marginal pricing that leverages the provenance of an electron.

Transactive Energy (TE) is a system of economic and control mechanisms that allows the dynamic balance of supply and demand across the entire electrical infrastructure using value as a key operational parameter. 17

To date, existing blockchain energy firms have been primarily focused on the downstream P2P & TE markets. 18 19

Upstream DER Project (Asset) Supply Chain Management

● DER Project (Asset) Lead Origination → Commissioned DER Project (Asset)

● This is the focus of the EBN ecosystem. Lead Origination is the process of finding a new DER lead, typically performed by a Lead Originator. Lead Originators generate new DER leads for the energy industry, and their role is synonymous to sales agents or representatives in other industries like real estate. Reference Lead Origination. Reference EBN’s blog titled ‘The Value of Lead Origination’ for additional details. Opportunity P2P & TE markets are not addressing and/or ignoring the upstream DER asset supply chain. P2P & TE markets are certainly an innovative improvement over existing wholesale markets and centralized institutions, but how long before

17 Transactive Energy: An Overview, National Institute of Science and Technology (NIST), U.S. Department of Commerce, April 19, 2017. https://www.nist.gov/engineering-laboratory/smart-grid/transactive-energy-overview 18 Comprehensive Guide to Companies Involved with Blockchain and Energy, SolarPlaza, January 3, 2018. https://www.blockchain2business.eu/request-blockchain-company-guide/ 19 4 Predictions for Blockchain in Energy in 2018: Greentech Media, March 5, 2018. https://www.greentechmedia.com/articles/read/four-predictions-for-blockchain-in-energy-in-2018




this space becomes crowded and these firms inefficiently compete against each other for a consumer/prosumer’s business as energy retailers do today in deregulated markets? Widening the lens and looking at the upstream supply chain management is the smart play and where value awaits to be unlocked. It’s important to note that the P2P & TE components come after the DER asset is commissioned and that a symbiotic relationship opportunity exists between the upstream and downstream ecosystems. Simply put, P2P & TE markets rely heavily on a healthy pipeline ecosystem upstream that is installing the DER infrastructure assets they wish to utilize on their platforms. This concept is analogous to the Internet. Before we could stream Netflix and use other Internet applications (Amazon, Facebook, Google, etc.), we first needed to deploy the infrastructure (servers, wires, etc.) across the globe. P2P & TE are blockchain applications that require DER infrastructure to be installed. While others focus on the downstream P2P & TE markets, EBN will focus on the upstream supply chain management to facilitate the P2P & TE markets. This is precisely what EBN’s first two energy applications (existing market platforms) are doing today. EBN cultivates a healthy pipeline ecosystem and serves as the link between the upstream supply chain management and downstream P2P & TE markets. EBN seeks to encourage application layer development to enable P2P & TE market plugins from existing market solutions. We see blockchain-to-blockchain or cross-chain network communication as vital for scaling blockchain solutions in the energy industry.

1.8 THE UPSTREAM DER PROJECT (ASSET) SUPPLY CHAIN TODAY

Today, the DER project (asset) supply chain process lacks the organization and tracking structure to adequately recognize and reward value creation at each state of the DER lifecycle. The biggest challenge the renewable energy industry faces today with scaling DERs is a lack of quality lead origination. The primary issue is that Lead Originators are not recognized and not compensated for their early-stage work and upfront efforts to generate qualified leads. Compensation typically comes in the form of low commission structures tied to total system cost,



have long sales cycles (6-12 months+), and are NOT guaranteed. This results in network disengagement from Lead Originators and a much lower rate of quality lead origination than the market can support and society requires to rapidly transition the world to a low carbon future. We need to accelerate lead origination velocity. For additional details on the value of lead origination, reference EBN’s blog post titled ‘The Value of Lead Origination’ which explores in more detail.

The energy industry ecosystem greatly benefits from qualified leads though decreasing soft costs, working on more DER projects which generates jobs, and benefits society as a whole (reduced carbon emissions, lower cost of energy, etc.) from actually installing those projects. It’s all about finding ready customers and doing more DER projects. With a healthy pipeline of qualified leads, we’re actually installing more projects and not simply paying consultants and engineers for energy audits, studies, etc. However, there’s an industry problem with the way the system works today. Today, Lead Originators work for commissions that are paid out only after a project is completed. This means the project must make it all the way through the DER supply chain and actually be installed in order for them to get paid. This can take up to 12 months or more. If the project doesn’t get installed, for any number of reasons, the Lead Originator doesn’t get paid. Meanwhile, consultants, engineers, and installers are paid for their services upfront and save on their soft costs by gaining access to well-qualified leads. This is not right. A major deficiency of today’s DER supply chain is the undervalued compensation received by the Lead Originators (value creators). Lead Originators are under-recognized and underpaid for the early value they deliver. Lead Originators are the pioneers who spend their resources at-risk. Lead Originators provide a tremendously valuable front-end effort, but the current system does not adequately compensate them for the value they deliver to the industry. The current DER project supply chain process lacks the organization and tracking structure to adequately recognize and reward value creation at each state of the DER project supply chain - especially at the lead origination state. One could parallel a songwriter or music artist to a Lead Originator. Both create early value while others (record companies / engineers / installers) monetize their work downstream, save on their soft costs, and increase their own profits.


https://medium.com/@TeamEBN/the-value-of-lead-origination-e61cae6d65ea


The current system doesn't adequately recognize and reward early state work because of the lack of the structures to track and compensate value created in real-time as the lead moves through each state of the DER supply chain. Enter Energy Blockchain Network (EBN).

1.9 THE FUTURE UPSTREAM DER PROJECT (ASSET) SUPPLY CHAIN

The EBN ecosystem will leverage blockchain and distributed ledger technologies to establish the early structure (via smart contracts) needed to ensure value creators are adequately recognized and rewarded (compensated) for the value they deliver. When programmed correctly, blockchains and distributed ledger technologies are extremely effective at exposing who in a value (supply) chain actually delivers value. Formalizing the process and adding real-time, autonomously triggered events (via smart contracts) will increase value for early-state work. This will drive increased participation and leverage network effects of the ecosystem leading to a large increase in DERs coming online. The Lead Registry will serve as a shared, trusted, and immutable registry to facilitate compensation for the value provided by participants who originate, engineer, and install new DER projects (assets). Data captured during the Lead Registry process above will be used to build the DER Asset Registry so each DER infrastructure asset has a unique digital identity. Technical data will be structured in a blockchain-managed and organized DER Asset Registry, and provide an interoperable layer to coordinate information, customers, and industry activities related to lifecycle asset management and participation in the energy industry. The DER Asset Registry is a community registry of DER assets which will store and organize data on the blockchain to provide easy retrieval for various future, downstream energy+blockchain applications. The EBN platform encourages third-party application layer development and partnerships to enable existing and emerging market solutions.



2.0 EBN ECOSYSTEM ARCHITECTURE

2.1 BACKGROUND AND INTRODUCTION We live in the age of decentralization amid The Third Industrial Revolution. The Internet decentralized information, giving anyone with a connection access to humanity’s collective knowledge. The web 2.0 and smartphones decentralized the tools of journalism, media, and content creation, giving anyone with a $100 computer the ability to publish their ideas worldwide. Bitcoin and the blockchain gave anyone with the Internet the ability to transmit, receive, and store value - censorship free P2P commerce. Blockchain technology, in conjunction with shockingly steep cost declines for DERs like solar and battery systems , promises to unlock the next great leap in 20

decentralization: distributed energy. Reference EBN’s blog post titled ‘The Third Industrial Revolution’ for additional details. Although invisible, energy represents perhaps the most important network of all because it underlies each of the others, including providing power for smart devices, transportation (which will soon be electric), and even the Internet itself. That’s why electricity constitutes the largest undisrupted market to date. The total spend on U.S. household electricity alone in 2012 was >$170 bn, which was larger than the entire total addressable market for the core business units of Facebook, Google, Twitter, et al. combined. Reference 21

EBN’s blog post titled ‘Disrupting the Largest Market in the World’ for additional details. While there’s been a lot of buzz about the potential of P2P or TE trading that the energy blockchain revolution will facilitate, few understand how we get from our current centralized grid to this decentralized energy trading panacea. This is where Energy Blockchain Network (EBN) comes in. We understand that the true value in this space will be unlocked by those who can 1) create the registry of existing and all new DERs coming online; and 2) rapidly facilitate the installation of these new DERs. The biggest challenge the renewable energy industry faces today is a lack of quality lead origination and we, a team of solar and renewable energy veterans with > 20 years experience in both startups and public companies,

20 How solar progress progresses (Solar: Part 2), perspicacity.xyz, February 13, 2017. https://perspicacity.xyz/2017/02/13/how-solar-progress-progresses-solar-part-2/ 21 Solar Energy will be f-ing huge, Tyler Tringas, August 23, 2014. https://tylertringas.com/solar-energy-will-be-f-ing-huge/


https://medium.com/energy-blockchain-network-publication/the-third-industrial-revolution-e872d0e9c43a

https://medium.com/energy-blockchain-network-publication/the-third-industrial-revolution-e872d0e9c43a

https://medium.com/energy-blockchain-network-publication/disrupting-the-largest-market-in-the-world-a1f63df86345


will leverage the power of the blockchain to rapidly accelerate lead origination velocity. Our first step will be to better incentivize solar and DER project originators by A) paying them the same day they submit lead info (instead of today’s industry standard of paying 6-12+ months down the line IF the project is built); and B) piloting creative new reward models that give originators longer-term value and connection to the project, supply chain, and network. Additional details will be provided in forthcoming documentation. EBN will establish interoperable and sustainable network layer protocols and standards to further drive DER asset supply chain efficiencies and scale in the energy industry. EBN will enable future applications in the energy industry to coordinate information, customers, and industry activities via the EBN infrastructure layer.

Figure 6: Architecture Overview

2.2 EBN ECOSYSTEM PROCESS OVERVIEW Every lead and asset will have a unique digital identity and attribute registry made available on a data layer for third parties to build on top of. To build the asset registry, SSD and Correlate will serve as the application layer nodes that organize and validate data submitted by Lead Originators, Scouts, Developers, and Integrators. After the data is validated, the asset registry is updated. The ecosystem’s cornerstone is to recognize value creation and reward (compensate) the creators (reference definitions below) in near real-time (rewarded progressively or incrementally):

Lead Originator:

Lead Originators generate Leads for DER Assets by submitting data to EBN Platform Hosts at the application layer. Platform Hosts validate data, which satisfies the smart contract and authorizes rewards to be issued to the Lead Originator.



Note: Lead Originators typically lack the technical expertise to work with Developers to define the specifications for the project. A Scout is typically required to organize and develop the Leads and DER Assets.

Scout: A Scout is focused on adding value to the EBN ecosystem by 1) developing new Leads and DER Assets and 2) creating new DER Asset digital identities and 3) mapping “scouting” digital identities for existing DER Assets. Scouts execute by submitting data to EBN Platform Hosts at the application layer. Platform Hosts validate data, which satisfies the smart contract and authorizes rewards to be issued to the Scout. Note: Scouts have the technical expertise to work with Developers to define the specifications for the project. This is something a Lead Originator typically lacks.

Developer: Development and engineering activities are organized by submitting data to EBN Platform Hosts at the application layer. Platform Hosts validate data, which satisfies the smart contract and authorizes rewards to be issued to the Developer. Note: The project Developer handles all project development activities from initial site surveys, feasibility studies, financial models, contracts, permits, installation, construction management, and ongoing maintenance and operations contracts. The company manages all parties within the transaction and is responsible for successful completion of the project.

Integrator / Installer:

Integrating and installation activities are documented by submitting data to EBN Platform Hosts at the application layer. Platform Hosts validate data, which satisfies the smart contract and authorizes rewards to be issued to the Integrator.



Note: Integrators (or Installers) are the ones that install the system at a customer site (e.g. solar PV installer). They are a company/business that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as system integration.

Platform Host:

Platform Hosts are the businesses that run on top of the EBN ecosystem at the application layer. SSD and Correlate would be the initial Platform Hosts running their existing platforms on top of EBN’s platform. They serve as the initially trusted entities to the private (permissioned) network. As the network grows, new Platform Hosts will be added, vetted, and approved to be a trusted entity for their platform application. For example, future P2P & TE energy blockchain firms could run on EBN’s platform. Platform Hosts will have varying privileges or rights on the private (permissioned) network. Some will only have read access while others will be trusted gates or validators or authorities - the ones who have read/write access to the blockchain. This will be a limited group to ensure the integrity and quality of the ecosystem. SSD and Correlate will be the initial validators (or gate keeps) that the network trusts to organize, manage, and validate data. Over time, existing validators will add new validators to the trust layer so the ecosystem is always moving in a decentralized direction over time.

The figures below illustrate, at a high-level, how value creating participants (lead originators, scouts, developers, integrators) will interact with the platform and be rewarded for their efforts to build the asset registries.



Figure 7: EBN Ecosystem Overview (Reference Figures 7a for a section view)

Figure 7a: EBN Ecosystem - Origination Rewards

The ecosystem will be focused on next-generation energy products and services that meet this ecosystem’s goals and develop second layer applications that allow for access to the asset registry data and tracking. The EBN platform will focus on a distributed (community) product that enables and encourages innovative application (second) layer developments and plug-ins that are focused on driving down DER supply chain costs (benefiting



the Customer) while rewarding (Tokens/Rewards/Commission) origination, development, and successful project execution. This is a healthy ecosystem of low carbon-based DER assets that meet or beat fossil fuel options on cost (e.g. solar PV has $0 marginal cost versus the cost of coal or natural gas) while rewarding the next generation of energy professionals that will oversee a long-term engagement with the customer. These interactions and efficiency gains will drive down DER supply chain costs year-over-year.

2.3 EBN ECOSYSTEM VALUE PROPOSITION EBN is a multi-sided platform which coordinates lead originators (sales agents/reps), engineers, developers, integrators, installers, utilities, customers, etc. to find & build energy projects. Above we explained that while others focus on the downstream peer-to-peer (P2P) & transactive energy (TE) markets, EBN will focus on the upstream supply chain management to facilitate the P2P & TE markets. EBN’s upstream value proposition to the energy industry has five core categories:

1. Value Recognition & Reward 2. New Lead Registry 3. DER Asset Registry 4. P2P & TE Markets Enabler 5. Emerging Business Models & Products Enabler

Next, we will systematically break down each of these core categories by providing a clear definition of the:

A) Use Case(s); B) Problem; and C) EBN Solution

1. Value Recognition & Reward

● From initial DER project (asset) origination through the asset’s lifecycle. ● The ecosystem will develop, manage, and deploy recognition

mechanisms to reward value created in real-time (reference figures above).

Use Case 1: Lead Origination Problem: There's a shortage of quality lead originators today because 1) origination requires a significant level of work with a distant payoff (most originators are paid 6 months after submitting a lead when the project is built) and 2) there is small value to the originator relative to



the value they bring from their existing relationship with the customer (the ONLY part of today's DER asset supply chain that is not commoditized). For brevity, reference EBN’s blog post titled ‘The Value of Lead Origination’ which explores this problem in more detail. EBN Solution: We solve these problems by 1) using a stablecoin (or stable token) to pay originators the same day they submit their lead info (we continue to pay more at each stage as they help us move a lead toward a constructed project) and 2) experimenting with different value creation mechanisms and game theories to better reward and align the originator with the project's lifecycle. Paying lead originators with a token in near real-time (rewarded progressively or incrementally) better incentivizes origination because it reduces payment time, increases reliability via smart contracts, and allows for experimenting with new payment models. Note: After a lead is submitted and qualified by the network, Platform Hosts SSD and Correlate will manage lead development and installation on their existing platforms.

2. New Lead Registry

● Documents origination, organizes data, and manages the process associated with the Lead’s lifecycle.

● Leads will have attributes that are built over the lifecycle process (as the state changes). Use Case 2: Project Developers / Engineers Problem: Customer acquisition is costly and inefficient today because each firm is competing and spending duplicate resources to curate the same qualified lead. This contributes to high soft costs. EBN Solution: We provide industry the required marketing layer to efficiently organize and validate leads. Project developers can reduce their overhead business development costs by obtaining a lead from the registry that is pre-qualified and ready for development. Use Case 3: Integrators / Installers Problem: Integrators specialize in installing “construction-ready projects.” A construction ready project is one that has already been engineered (developed) by a project developer to generate the project specifications and drawings (analogous to the blueprints for building a





home). Integrators are expending duplicate resources to obtain construction-ready projects, and/or having to hire a project developer to perform the engineering. This contributes to high soft costs. EBN Solution: We provide industry the required project development layer. Integrators can reduce their overhead marketing costs by obtaining a lead from the registry that is already developed and ready for construction (i.e. the engineering is done).

Note: This concept plays to the “long tail” of the solar and related energy industries (i.e. we've seen that it's cheapest/best value for the consumer to have local installers). The biggest challenge for local installers is the marketing cost. We will create the registry / marketing engine for the long tail of installers.

3. DER Asset Registry

● Every DER project (asset) will have a unique digital identity with various attributes that get refined over the lifecycle and updated as needed (reference figures above).

● The registry can be utilized for varying use cases within the EBN platform as well as made available on a data layer for third-party blockchain ecosystems. We believe this should be a “community” registry with the vision of becoming the Google Maps for the energy industry.

Use Case 4: Utilities Problem: Hedging against future, worse case scenarios are costly because they require overbuilding centralized infrastructure. For example, utilities have expensive natural gas peaker plants on standby and overbuild the T&D system to support only a few hours a day (out of the year) for peak demand periods. This is both expensive and a poor use of capital resources which ratepayers (i.e. anyone who uses electricity from the utility) must cover - without choice. EBN Solution: In addition to scaling DERs that reduce electrical demand from utilities, we will provide utilities with valuable DER asset data (installed and pipeline) so they can run enhanced models and forecast scenarios. This will give utilities an improved ability to coordinate events that provide grid flexibility (e.g. demand response, demand-side management) and resiliency (e.g. down power lines due to weather) during times of need versus overbuilding costly centralized infrastructure. We will also provide utilities with real-time, or near



real-time, data that can be utilized for grid management and energy data analysis. Trend: Similar to storage, distributed energy resources (DERs) are positioned to gain broad utility acceptance in 2018. Long envisioned as a threat to reliability and finances, a number of utilities are realizing the potential of DERs to solve system needs usually reserved for bulk power assets like plants and transformers. 22

Second Problem: Utilities across the nation are still figuring out how best to get into the distributed energy business, but survey results indicate the vast majority are trying to figure it out. 23

EBN Solution: We provide industry the required project development layer. Utilities can reduce their overhead marketing costs by selecting a lead from the registry that is already developed and ready for construction (i.e. the engineering is done). Use Case 5: Retail Electric Providers & Commodity Energy Brokers Problem: Decentralization efforts (e.g. DERs, blockchain) can be detrimental to an existing intermediary’s business model if they are not planning and innovating accordingly. Energy retailers & brokers are intermediaries that provide a “middleman” service. DERs reduce the amount of energy an end user needs to buy from an energy retailer or broker (decreased revenues year-over-year). Blockchain allows end users to buy and sell electricity P2P which can be organized, tracked, and settled without existing intermediary (middleman) services. EBN Solution: We can provide energy retailers & brokers with the means to provide customer-centric DER solutions (via EBN application layer Platform Hosts SSD & Correlate) to their existing and future customers. This will increase their customer “stickiness,” while opening a myriad of new value streams that can be monetized to increase their bottom line profit.

22 10 trends shaping the power sector in 2018, Utility Dive, January 22, 2018. https://www.utilitydive.com/news/10-trends-shaping-the-power-sector-in-2018/515235/ 23 10 trends shaping the power sector in 2018, Utility Dive, January 22, 2018. https://www.utilitydive.com/news/10-trends-shaping-the-power-sector-in-2018/515235/



Use Case 6: Utilities, Electric Vehicle (EV) & Behind-the-Meter (BTM) DER Asset Owners Problem: Utilities lack an adequate solution for the new energy economy of tomorrow to effectively manage fleet EV charging in their service area. Existing infrastructure isn’t capable of communicating to blockchains nor does it allow assets to become economic actors. In addition, existing DER databases are fragmented and don't allow for downstream blockchain use cases. EBN Solution: The DER asset registry will create a blockchain data structure with all assets (EVs, carport & rooftop solar PV, etc.) having a unique blockchain identity so they can communicate with each other and become economic actors. The DER asset registry is far more than just a database. It assigns a unique digital identity to each asset so that we can unlock and enable value-added blockchain applications like fleet EV charge management or TE. We can achieve this by installing specialized blockchain-IoT chips in meters at the supply point that will allow us to build the communication infrastructure for devices to interact with each other and the ledger. We can then have EVs charge at carports and pay the carport for the electricity. In this case, both the carport and EVs need a unique digital identity in the DER asset registry so that we can keep track of who buys what, how much, and from whom. Think about this for a second, imagine a world where autonomous EVs swarm coordinated efforts to manage fleet charging with DER assets in a utility’s service area and/or with owners of BTM assets (e.g. carport & rooftop solar PV systems). Trend: This use case demonstrates a broader opportunity extending beyond fleet EV charge management. It's about structuring DER asset data into a usable form for any blockchain application to leverage by turning DER assets into economic actors. The transactions are occurring machine-to-machine (or asset-to-asset), no humans are involved. Humans will need to program or set, the initial parameters, but the assets execute in real-time without humans. The assets will leverage machine learning and artificial intelligence to further drive efficiencies. This frees humans up to do more human tasks and allows DER benefits to scale.



Use Case 7: Energy Efficiency (EE) Measurement & Verification (M&V) Problem: Existing M&V techniques are outdated and inadequate at tracking energy savings against a baseline. Baseline: Reference to how much energy was used (or “consumed”) before a measure or intervention (e.g. DER) was installed/implemented. Think of baseline like weighing yourself before you change your diet and implement a workout plan (measures & interventions). After a year of eating healthy and working out, you can weigh yourself and compare your new weight against your “baseline” to track results. Energy savings and M&V is similar in concept.

The problem is not limited to any one sector, efficiency company or utility. Rather, say experts, the industry is systematically plagued by an outdated way of measuring performance -- partly because efficiency is hard to track compared to energy generation, and partly because of the industry's inability to modernize. 24

Second Problem: The market does not adequately value EE savings - the value of the negawatt. Negawatt: A unit used to measure the amount of energy saved (in megawatts). Watt: Watt is the SI unit of power, equivalent to one joule per second, corresponding to the power in an electric circuit. Consumers may notice their electricity bill rate is reported in $ per kilowatts-hours (kWh) which is simply 1,000 watts per hour. Reference here for further explanation on the difference between a watt and watt-hour. EBN Solution: Leveraging the DER asset registry, we can provide energy consumers, utilities, and program administrators a tracking and reporting layer that measures and verifies savings, coordinates performance payments and settlement against a particular DER, measure, or intervention. This use case demonstrates the value of blockchain and its inherent ability to establish trust among parties that can be governed by pre-negotiated smart contracts.

24 Lies, Damned Lies and Modeling: Energy Efficiency’s Problem With Tracking Savings, Greentech Media (GTM), June 3, 2015. https://www.greentechmedia.com/articles/read/overcoming-energy-efficiencys-problem-with-tracking-savings


https://enphase.com/en-us/support/what-difference-between-watt-and-watt-hour


In the energy efficiency program space, blockchain could add security to the exchange of information among customers, program administrators, and evaluators. The same way that blockchain authenticates that a token or unit of cryptocurrency is valid, it can authenticate the validity of a volume of customer energy savings. More efficient markets, more effective programs: such a future would give individuals, companies, and collaboratives mechanisms to monetize the value of their energy resources (including energy savings) — ones with lower costs of entry and more fluid transactions than our current energy trading platforms. 25

Use Case 8: Fractional/Shared Ownership This is a placeholder section due to regulatory uncertainties and other factors.

4. P2P & TE Markets Enabler

● Building the DER Asset Registry provides a seamless transition to facilitating P2P & TE markets.

● The EBN platform looks to encourage application layer development to enable P2P & TE market plugins from existing market solutions. We see blockchain-to-blockchain network communication as vital to scale blockchain solutions in the energy industry.

● In addition, this platform could later develop a P2P & TE platform application layers of its own to fill in gaps with existing market solutions.

Use Case 9: P2 & TE Firms Problem: These firms need 1) DER projects (assets) that are commissioned and operational before they can be used in their markets and 2) attribute data on the DER asset so it can be turned into an economic actor. Examples of DER attributes: Asset owner, location, system type, system size, operational parameters (what it can do now or made available to do in the future).

25 Blockchain and energy efficiency: a match made in heaven?, American Council for an Energy-Efficient Economy (ACEEE), April 30, 2918. http://aceee.org/blog/2018/04/blockchain-and-energy-efficiency



Problem (continued): To reiterate a previous statement, it’s important to note that the P2P & TE components are downstream after the DER asset is commissioned. Simply put, P2P & TE markets rely heavily on a healthy pipeline ecosystem upstream that is installing the DER infrastructure assets they wish to utilize on their platforms. This concept is analogous to the Internet. Before we could stream Netflix and use other Internet applications (Amazon, Facebook, Google, etc.), we first needed to deploy the infrastructure (servers, wires, etc.) across the globe. P2P & TE are blockchain applications that require DER infrastructure to be installed.

EBN Solution: A symbiotic relationship opportunity exists between the upstream and downstream ecosystems. While others focus on the downstream P2P & TE markets, EBN will focus on the upstream supply chain management to facilitate the P2P & TE markets. This is precisely what EBN’s first two energy applications (existing market platforms SSD & Correlate) are doing today. EBN cultivates a healthy pipeline ecosystem and serves as the link between the upstream supply chain management and downstream P2P & TE markets. We will provide these firms with advanced notice of pipeline projects so they can plan and accelerate enabling the DER asset’s participation in their markets. We will serve as an industry marketing layer for customer acquisition and onboarding by providing early state efforts. For an analysis of the upstream vs. downstream ecosystems, reference EBN’s post titled ‘Upstream vs. Downstream: DER Supply Chain, Explained.’

5. Emerging Business Models & Products Enabler ● Continuing the principles of enabling P2P & TE market integration, this

platform will encourage application layer development to enable plug-ins for new and emerging business models, products, platforms, and solutions.

● The EBN platform will utilize open sourced communication protocols and standards to cultivate blockchain-to-blockchain integration and cross-chain communication.

Use Case ‘n’: To Be Discovered

Value of Open Application Development: Precedent Examples We have all witnessed the tremendous level of development that has been sparked in the community by simply enabling smart contract development on Ethereum’s open-sourced public blockchain. As a result, other open-sourced public blockchain development examples


https://medium.com/energy-blockchain-network-publication/upstream-vs-downstream-der-supply-chain-explained-a74a0cb4172d


(e.g. NEO, EOS, Stellar, BitShares) are emerging. To clarify, the EBN network is not looking to develop a new public blockchain. Rather, we will “future-proof” our design by remaining agnostic to blockchain technology and consensus algorithms. We believe in the value of enabling application layer development, and will promote the same general principles and value proposition as demonstrated by public blockchain protocols.

Figure 8: EBN Ecosystem - P2P, TE, Emerging Business Model Enabler Overview

2.4 REWARD SYSTEM OVERVIEW The EBN ecosystem will utilize the following system to facilitate our Lead Registry & Rewards Program minimum viable product (MVP). Reference the forthcoming Technical Whitepaper for additional details.

1. Pegged Currency (PC) Token (stablecoin or stable token) 2. Smart Contract



The PC token is the token that gives the ecosystem stability since it's pegged to a local fiat currency (e.g. USD) or to the value of the certain collateral. The PC token will be used as payment per smart contract terms. A smart contract will be created for every lead record which will store select lead data and will be loaded with PC tokens upon creation to automatically distribute to participants who transition the lead through all of its states. Smart Contract:


2.5 TOKEN ANALOGIES Tokenized blockchain systems are similar to existing token business models today, but most consumers interact and use the tokens without thought or concern. Blockchain is digitizing this existing process and opening new markets and assets for tokenization. In what’s sometimes referred to as a ‘dual’ token model, one of the tokens can serve as a ‘platform access’ (PA) token. Keep this concept in mind when reviewing the following examples.

Note: Although the EBN platform is using a PC token + smart contract system, it is NOT considered a ‘dual’ token model in the context previously described since we’re not utilizing a PA token. PA tokens are generally the tokens that are sold/issued via an initial coin offering (ICO) or token generation event (TGE).

The Arcade Analogy Take for example an arcade. The platform access (PA) token can be thought of as the monthly membership a player must pay to the arcade owner so they may gain “access” to the games inside. Once inside, local fiat currency (USD) can be exchanged for arcade tokens that must be deposited into the machines to play. In addition, the arcade owner can gift arcade tokens to players for being good patrons. The arcade tokens are similar to the pegged currency (PC) token (stablecoin or stable token) that players can redeem for local fiat currency (USD). The Laundromat Analogy Similar to the arcade analogy, consumers use fiat currency (USD) to acquire laundry tokens that must be deposited into the washer or dryer for operation. These laundry tokens are similar to the pegged currency (PC) tokens



(stablecoins or stable tokens). A laundromat loyalty program may gift consumers say $2 for every $20 of laundry tokens they acquire to incentivize ecosystem (the laundromat) participation. Similar game theory opportunities apply to blockchain token economic models. The Credit Card Analogy Another example of a dual token system consumers commonly interact with is a credit card rewards program. The platform access (PA) token can be thought of as the annual credit card fee that a consumer must pay to gain “access” or the ability to use the credit card. Consumers that use the credit card are contributing to the ecosystem’s health, so the credit card company gives back a % of purchases in the form of “reward points.” These reward points are similar to the pegged currency (PC) tokens (stablecoins or stable tokens) that can be redeemed for local fiat currency (USD) - “get cash back.”

2.6 REWARDS PROGRAM OVERVIEW Pegged currency (PC) tokens (stablecoins or stable tokens) are issued against escrowed funds and can be redeemed at any time for local fiat currency. Local fiat currency can be USD or any local market currency that the platform established with its participants. Reward Plan 1 - Stablecoin (Stable Token) Plan: Token rewards will be issued in stablecoins (or stable tokens) so participants can easily evaluate the local fiat currency cash value. Think of this like the credit cards reward points example above. Participants will always know how much their token rewards are worth in local fiat currency, so they will not be anxious to redeem or move in fear of the value dropping. It is a transparent and stable option that most people are used to.

2.7 USER INTERFACE (UI) AND USER EXPERIENCE (UX) EBN participants will NOT require prior blockchain experience or working knowledge to participate in the ecosystem. The intent is for participants to interact with the EBN platform such that they never see the blockchain code. Take for example a consumer that browses and shops on the internet. The consumer doesn't see or need to know or interact with TCP or HTTP protocols to buy something online. Similarly, the UI/UX of the EBN will keep all the blockchain technology behind a UI that looks and feels like existing web browser applications today.



3.0 PROJECT TEAM

3.1 FOUNDING ENERGY TEAM Energy DNA - Product and Platform Leaders Team is comprised of energy industry veterans with an unparalleled track record of delivered success in startups and Fortune 300 companies. Founders of early leading US DER companies, one of which is now publicly traded.

● Jason Loyet - EBN Director of Origination - Co-founder, Solar Site Design

● Todd Michaels - EBN Chief Network Officer- Co-founder, Correlate, Inc

3.2 BLOCKCHAIN / PLATFORM TEAM ● Ryan Denke - Strategic Development Partner & VP of Engineering -

CEO, Phoenix Blockchain, LLC

3.3 ADVISORY TEAM ● John Parzych - Business & Technology Law, Distributed Ledger

Technology - JOVA Law Group, PLC ● Maximilian Webster - Clean Energy Entrepreneur, Forbes 30 under 30 -

Growth, Bright, Inc. ● Naoum Anagnos - Systems Engineer, Critical Infrastructure & Resiliency

- Co-founder, Seirios Consulting Group, LLC ● Professor Todd Taylor - Professor of Practice: Supply Chain & Blockchain

Research Lab, Arizona State University (ASU) - Co-founder, Aperio - Thought Leader, Sweetbridge

● Gray Peckman - Energy & Equity Analyst - Analyst, Precocity Capital


https://www.linkedin.com/in/jasonloyet/

https://www.linkedin.com/in/jasonloyet/

https://www.linkedin.com/in/todd-michaels-8734164/

https://www.linkedin.com/in/ryan-denke-71a682/

https://www.linkedin.com/in/ryan-denke-71a682/

https://www.linkedin.com/in/johnparzych/

https://www.linkedin.com/in/johnparzych/

https://www.linkedin.com/in/maxwebster/

https://www.linkedin.com/in/maxwebster/

https://www.linkedin.com/in/naoum-anagnos-ms-pmp-73079139/

https://www.linkedin.com/in/naoum-anagnos-ms-pmp-73079139/

https://www.linkedin.com/in/taylorops/



https://www.linkedin.com/in/gray-peckham-8908816/


4.0 HOSTS AND APPLICATIONS

4.1 INITIAL PLATFORM HOSTS & ENERGY APPLICATIONS SSD & Correlate are existing market platforms that partner today to scale DERs. These platforms will be the initial Platform Hosts and Energy Applications for EBN. Leveraging the network effects and successful business models of these existing market platforms, the EBN team is building a transformative ecosystem that will lead the Energy Technology Convergence.

Figure 9: Network-Application Architecture

4.2 MARKETPLACE PLATFORM Solar Site Design (SSD) Solar Site Design is a collaborative, cloud-based marketplace platform that connects highly-qualified solar project referrals to leading solar companies to drive down customer acquisition costs and the cost of energy for customers.

4.3 VIRTUAL ENERGY MANAGER (VEM) PLATFORM Correlate, Inc Correlate is the world's first virtual energy manager (VEM) platform that combines open data systems and tools with organized access to the energy industry's top freelance expertise and service providers.

Service Provider Definition: Typically a company/business operating in, at a minimum, one of the following capacities, and can have the in-house expertise to jointly operate as an expert:


https://www.solarsitedesign.com/

https://www.correlateinc.com/


Original Equipment Manufacturers (OEMs): Company that produces parts and equipment that may be marketed by another manufacturer. Systems Integrator: Company/business that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as system integration. Project Developer: Company/business that handles all project development activities from initial site surveys, feasibility studies, financial models, contracts, permits, installation, construction management, and ongoing maintenance and operations contracts. The company manages all parties within the transaction and is responsible for successful completion of the project. Financing: Company/business that facilitates a project’s financing needs.

4.4 FUTURE ENERGY APPLICATIONS Third-parties will be encouraged to participate and the ecosystem will enable this in an open source manner on the private (permissioned) network application (second) layers.

Figure 10: Future Network-Application Architecture



5.0 SCHEDULE AND ROADMAP The EBN platform will execute in three phases (Short-term, Mid-term, Long-term). The EBN team will build the ecosystem foundation around current business models while subsequently layering in blockchain technologies, partners, applications, and geography.

Figure 11: Milestone Schedule



Figure 12: Product Roadmap

6.0 TECHNICAL OVERVIEW

6.1 OVERVIEW Participants must have a valid software-as-a-service (SaaS) subscription to gain access to the private (permissioned) network. This is similar to recurring subscription fees in traditional/other SaaS models. A portion of SaaS funds will be used to fund the rewards program (“Rewards Treasury”).

Once participants have paid for a SaaS subscription for one year, they will earn a membership. This type of “membership” is similar to existing market examples (e.g. Costco, Amazon Prime), but different and improved in that it’s earned not purchased, and that it grants perpetual rights to discounts and privileged features (reference below for examples). Examples of “perpetual rights to discounts and privileged features”:

● X% discount on SaaS subscription fees for LIFE ● Preferred rewards programs tiers ● Unlimited access to EBN network across applications

Additional details will be provided on the final discount/membership design when completed.



The private (permissioned) network grants participants access to participate in the network where they are rewarded in near real-time for the value they provide. As value is created and terms met, smart contracts will automatically reward participants from the PC (pegged currency or stablecoin or stable tokens) Rewards Treasury. Smart Contract:


EBN will utilize Sweetbridge’s stable token (or “stablecoin”) BridgecoinTM (BRC) for the network PC tokens. Additional details will be provided in the future documentation. Reference Sweetbridge’s extensive documentation for details regarding Bridgecoin™.

For downstream P2P & TE use cases, PC tokens could be used to manage kWh transactions and settlement between prosumers and consumers. These interactions and transactions would be developed and managed on application layers and state channels. Additional details will be provided at a later date as these and other roadmap use cases are developed. Reference the Appendix for the ‘EBN Rewards System (Token) Ecosystem Architecture Diagram’ to review the process flow, and the forthcoming Technical Whitepaper for additional details.

7.0 CONTACT & ADDITIONAL INFORMATION Energy Blockchain Network, Inc. (EBN) | Phoenix, AZ, USA Contact us directly via:

● Email: [email protected] ● Contact Form: www.energyblockchain.network

For more information and to receive the latest updates: ● Follow us on: Medium & LinkedIn ● Sign-up (via website) to receive our Community Newsletter

END OF WHITEPAPER


https://sweetbridge.com/whitepaper

http://www.energyblockchain.network/

https://medium.com/energy-blockchain-network-publication

https://www.linkedin.com/company/energy-blockchain-network/


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APPENDIX A

EBN Rewards System (Token) Ecosystem Architecture Diagram


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