Commoning energy assets and services using Holochain

Update Apr 28 2020: I was introduced to Decentr recently, and it appears to have a better economic model than both mutual credit and the current mainstream economic model involving fiat currencies (of which blockchain-issued cryptocurrencies are a subset of). I have been privy to private correspondence with Decentr to see their economic model, as well as published blog articles. In the words of Rich James from Decentr:

Problem is, imposing closed-system axiomatic economic models on a system that is exclusively open (or should be open); i.e., an economy (which is what an economy is for in a democracy), has never worked and never will (that we can see; it is why crypts and mainstream markets tanked together in this crisis). It is the same problem with the mainstream economy, based as it is on wildly outmoded and misapplied Newtonian physics. Ditto crypts.

Mutual credit and fiat currencies both impose closed-system, axiomatic economic models on the real-world economy.

After checking out their website including their whitepaper I recommend reading the following articles:

https://hackernoon.com/covid-19-exposes-the-myth-of-bitcoin-as-a-safe-haven-ty2i3ykb

Then read this Medium article here that delineates similarities/difference between Holochain/Decentr as regards “currency”:

https://medium.com/@DecentrNet/a-holonauts-guide-to-the-deconomy-b800d7cd22d6

This article highlights the flaws with fiat currencies, and offers a good alternative solution using Decentr:

Why "Digital Fiat Currencies" Need to be Based on Data Value | Hacker Noon

I will leave the following original article for historical purposes:

Before reading this article it is recommended and helpful to read the NextNet series of posts by Arthur Brock. It can also help to have an understanding of how Holochain works on a technical high level by reading Holochain Core Concepts.

Summary: commoning electricity grid infrastructure, renewable energy, energy storage, fleets of EVs, and EV charging infrastructure using a Holochain app, and a stable-value, mutual credit cryptocurrency that is asset-backed by these energy assets. I’m seeking to work with partners to develop one of these ideas, starting with the proposal for commoning grid infrastructure. While I may start developing a prototype, and a Holochain app, this may not sustainable with achieving a product that is ready for mainstream use, unless I can get buy-in, such as from insured crowdfunding, from an ethical token sale, from donations, membership payments as part of a non-profit model, a platform cooperative fundraising model, crowdfunding, or an equity sale.

My focus in this article is commoning electricity grid infrastructure with Holochain. In my next article I cover commoning EVs, EV charging stations, and EV services. What I am seeking to achieve is to deliver more efficient and distributed investment, development, operation and management of electricity grid infrastructure, in order to enable the growth of distributed, smart and clean energy; to continue to achieve the Australian National Electricity Objectives, while also achieving sustainable development and operation of electricity services, and empowering people to achieve these objectives in a distributed way. (Note that while I’m writing in Australian context, my proposal is readily applicable to any other community and nation, whether it’s connected to the grid, or not.

I believe that the way that the NEM is structured right now, with a handful of Distribution Network Service Providers (DNSPs) and Transmission Network Service Providers (TNSPs), does not allow for distributed investment, development, and management of electricity grid infrastructure. By enabling the distribution of decision making, investment, management and other economic activity, it is possible to further enable sustainable growth of civilization with mutually and publicly beneficial stigmergic collaboration, rather than the extractive competition that is part of capitalism. An analysis of history shows that distributing power and agency to create value results in greater economic growth and innovation. The rise of startup societies like the Shenzen Economic Zone is a prominent, modern example of this.

I am seeking to gain more traction with my proposal, and seek support and collaboration from potential customers, partners, and investors. While feedback about specific aspects or particulars of the proposal are welcome, what I really need is discussion and agreement that this proposal, on a high-level, is worth pursuing. Investors should ideally, as Warren Buffett points out, invest in a business as if they were investing in 100% ownership of the business.

This page here (https://www.aemc.gov.au/regulation/national-energy-governance) states:

The NEM governance structure was designed to deliver effective competition, to provide clear accountabilities and to support investment certainty in the energy sector by separating decisions on government policy, energy regulation and energy system operation.

The problem with this statement is that the grid infrastructure in Australia is owned and managed by a relatively small number of entitities, many of which have a relatively high amount of ownership between states and foreign governments, which I’ll go into more detail on later in this article. How can we have an adequate separation of concerns and powers when ownership is so concentrated by a handful of corporations, with a mix of government, private and public ownership?

Before I go into detail about my ideas for commoning electricity grid infrastructure, other energy assets, fleets of EVs, and EV charging infrastructure, I’ll provide some background information, which includes:

• a brief introduction to the software that can be used to achieve this
• organisational model
• background on the entities that control electricity grids

If you want to skip to the ideas, jump to the heading title “Commoning electricity grids” — please press the page down button on your keyboard several times to get there as Medium doesn’t have links for headers. Please note that I still consider this article to be somewhat of a draft, and it has been subject to several revisions, and may continue to be revised.

Ideally I would like to build a distributed smart energy app with Holochain, or the Internet of Energy (IoE). The IoE is planned to be an open-source platform for building smart energy apps, that is in early stages of development on top of Holochain. I may also fork the platform or build one from scratch, as the open source progress in the above link has been small and slow. See also this introduction, which in addition to introducing what the IoE is, addresses why it should be a better option, once developed, than centralized services or blockchain platforms. Because the IoE is in early stages of development, I’m not sure that it will be suitable for commoning of energy assets, although if it isn’t as currently designed, it could be modified in order to support commoning of energy assets.

Since the IoE platform has only recently started development, that would need to be built alongside the app. Note that an app might be able to be built with a centralized client-server model, and be ported over to the IoE when ready, if not yet, but I use the word might very strongly. Apps are already being built on Holochain so this seems unnecessary. In addition to the possible apps listed here, others could include for providing a way to fund public energy infrastructure, such as for transmission and distribution networks, electric vehicle charging networks, renewable energy farms, electric vehicles as a service (with inspiration from Steer EV), and smarter and more interconnected grids.

The apps might be able to be proprietary and private, but I think this would be less beneficial in the long-run, and it would make less sense for funding commoned/public infrastructure. As such, any organisation that may be responsible for the development of such commoned energy infrastructure, assets, and services, would also best be commoned as a Sovereign Accountable Commons; or the following alternatives for an interim period: as a non-profit association, limited by guarantee, where all profits are re-invested into the business; or as a co-operative, where “economic benefits are distributed proportionally to each member’s level of participation in the cooperative” (Wikipedia).

Distribution and transmission electricity grid networks used to be typically owned by governments as a monopoly, but increasingly this is transitioning to ownership by private companies. In Australia, electricity distribution networks are owned by Transmission and Distribution Network Service Providers (TNSPs and DNSPs), which are owned either wholly by governments, a mix of government-owned corporations (with foreign or Australian state governments) and private corporations, or by private entities.

The following helpful graphic shows the electricity network companies in Australia that are members of Energy Networks Australia, which I believe includes all of the TNSPs and DNSPs in Australia.

There’s also a filterable list on the AER website here.

This is a list of the Australian TNSPs: Powerlink Queensland (QLD Government owned); TransGrid (NSW and ACT); AusNet Services (Victoria, public company with foreign state ownership by the Singaporean and Chinese governments, via state-owned corporations — Singapore Power (31.1%) and and State Grid Corporation of China (19.9%)); Electranet; and TasNetworks (Tasmanian Government). The following history of Transgrid is relatively typical of many grid companies that have been formed from the breakup of state-owned monopolies (although, state-owned grid monopolies, and even more broadly including energy generation, do still exist, particularly in more authoritarian regimes and jurisdictions). Transgrid’s history follows:

TransGrid began as the trading name of the Electricity Transmission Authority which was established on 1 February 1995 as a statutory authority under the Electricity Transmission Authority Act 1994, as part of the break-up of the Electricity Commission of New South Wales.[2] The Authority was corporatised in December 1998, by the Energy Services Corporations Amendment (TransGrid Corporatisation) Act 1998, and TransGrid became the actual name of the corporation.[3]

In December 2015, a consortium called NSW Electricity Networks was the successful bidder for a 99-year lease of TransGrid’s transmission network[4] for $10.3 billion.[5] The consortium consists of: two Australian entities Spark Infrastructure (15%), the Hastings-managed Utilities Trust of Australia (20%), the Canadian pension fund Caisse de depot et placement du Quebec (25%), and two Middle Eastern sovereign wealth funds, the Abu Dhabi Investment Authority (20%) and the Kuwait Investment Authority (20%).[5] State Grid Corporation of China was one of the other bidders, in a consortium with Macquarie Infrastructure Real Assets. The company’s bid was cleared by the Foreign Investment Review Board but was eventually unsuccessful,[6] possibly because of its government and military connections.[5]

From this page, the owners of ElectraNet Pty Ltd, trading as ElectraNet, are:

• State Grid International Development Asia and Australia Holding Company Limited — The international arm of the State Grid Corporation of China (46.56%)
• YTL Power Investments Limited — An investment company of YTL Power International Berhad (33.50%); and
• Australian Utilities Pty Ltd — As trustee for the Australian Utilities Trust (19.94%)

There are four distribution businesses in NSW: Endeavour Energy, Ausgrid, ActewAGL, and Essential Energy.

Endeavour Energy was leased in June 2017, for a term of 99 years, for a 50.4% ownership, to a consortium led by “Macquarie Infrastructure and Real Assets (MIRA), and includes AMP Capital, British Columbia Investment Management Corporation and Qatar Investment Authority. The NSW Government retains a 49.6% interest and continues to regulate safety and reliability” (Wikipedia, Endeavour Energy, The Treasury NSW Government).

Ausgrid was privatized in 2016 to an Australian-based consortium of AustralianSuper and IFM Investors, for a bid to the NSW Government at a sum of $16 billion.

The distribution arm of ActewAGL, Evoenergy, is a joint venture, owned equally between Icon Water, an ACT Government-owned corporation, and Jemena Ltd via subsidiary companies. (ActewAGL, archive)

Electricity networks have issues with constraints on network lines, which cause bottlenecks to supplying power where it is needed. Getting enough investment to strengthen these networks to reduce these constraints and support renewable energy is a major barrier to increasing the uptake of renewable energy (particularly for utility scale renewable energy generation), where renewable energy systems may range from utility scale and connected to transmission grids; to small-scale, embedded, behind-the-meter energy generators (mostly rooftop PV, plus some cogen and wind).

The State Grid Corporation of China has a considerable share in foreign grid entities, including in Australia. Concerns over potential geopolitical issues, and military, strategic and trade impacts, with a similar case, have been raised here, with the sale of a 99-year lease of Port Darwin to a Chinese company, Shandong Landbridge Group, which is owned by “Ye Cheng, a billionaire with close ties to the Chinese government and the Communist Party of China [4][5][6].” These concerns are not xenophobic; there are real strategic and military threats from foreign interests, with links to a foreign government (with a military) gaining control of strategic Australian assets and land.

How can we reduce the risk of investment in infrastructure, while also increasing necessary investment in it, in order to deliver net benefits long-term? We can distribute investment: making it widely available, while preventing ownership from becoming concentrated in the hands of a few oligarchs, or foreign interests with military links. When ownership of assets becomes concentrated, then we lose control, and increase the amount of debt and work we have to do to regain control. See also this article by Warren Buffet, which includes an analogy to help understand the problem of net trade deficits resulting in increasing foreign ownership and trading income extra-nationally: “Here’s How I Would Solve the Trade Problem”, and this Seeking Alpha article with a summary and insights on that article here. By using globally available and distributed mutual credit cryptocurrencies that are asset-backed and stable in value, like Holofuel (a work in progress, not ready to use yet), the value of various goods and services can gradually become more stable, irrespective of location. This can help to lead to a balance of trade, while incentivizing an increase of production of goods, services, and trade, and more generally, a more prosperous, happier global society. Stability is good and is conducive for all-round development, if not hampered by excessive control. Uncertainty and instability is bad, and can lead to decay and dissolution if not remedied, or otherwise reduce productivity, wasting missed opportunity.

Commoning electricity grids

We cannot solve our problems with the same thinking we used when we created them. — Albert Einstein

One idea is rather radical, and would involve commoning of electricity grids, in order to harness efficient investment, management, planning, operation, and control of electricity grids and markets. Mutual credit currencies that are stable in value, and asset-backed by grid assets, could be used to pay grid asset owners (who operate collectively to manage the grid as a Sovereign Accountable Commons (SAC)) to use the services of the asset, similarly to how there are distribution and transmission network fees today. Note that fees are necessary for internalizing costs. If you don’t internalize them, you are socializing the costs as an externality. There’s related discussion on that the NextNet series of posts by Arthur Brock.

It has been suggested to nationalize electricity grids, with the intention to deliver better public benefits. However, centralized, state-owned, monopoly ownership has been shown in history that it may not deliver efficient allocation of supply to match demand, compared to decentralized commercial markets.

Moreover, commoning with mutual credit currencies, similarly as applied with Holofuel and Holo, provides a potentially more distributed, sustainable, healthier, economic system for development, as compared to decentralized capitalism and representative democracies, which can still be centralized. Holochain does this with distributed ledger technology, customizable validation algorithms for security of data and financial transactions, and distributes agency and incentivizes mutually beneficial outcomes for involved agents.

Commoning electricity grids (let’s call it CommGrid for short) could start small, such as with a distribution grid upgrade or extension at the end of a network, or broaden scope to include investment in embedded networks, or microgrids, since they reduce the need to upgrade grids to meet increasing peak demand. It would also work well in developing countries where there is an increasing basic need and demand for electrification (one of the UN Sustainable Development Goals is affordable and clean energy).

Who is the target market for CommGrid? CommGrid would likely increase its success by working with grid owners and the government in order to invest in the grid, especially in areas that are connected to the grid, or that are proposed to be connected to it. Since grid owners and the government invest in grid upgrades, they are key potential customers. Renewable energy developers are one target area of customers, since they need better grids, in order to reduce risk and get a better return on their renewable energy investments. Commercial solar retailers who develop embedded networks are another. Large scale electricity users that may need to invest in grid upgrades due to increased necessary demand (while using energy efficiency and demand response management) are another potential type of customer.

I have been contacting grid companies worldwide in order to initiate a trial grid infrastructure project (e.g. a small upgrade, addition of small assets, or a rural off-grid or microgrid project).

Addenda

There’s lots of other apps that are already implemented that could be implemented using Holochain as a backend, in order to harness its benefits of fully distributed p2p networking and computing, with ostensibly better scalability and security than the centralized client-server model and blockchains.

In addition to smart energy apps, think also of the following all running on Holochain:

• see all of these in various stages of development: https://github.com/holochain/apps and https://developer.holochain.org/docs/guide/built_with_holochain/, e.g. distributed web hosting, social media, etc.
• sharing economy apps like AirBnB (sharing accommodation), marketplaces (like eBay and Amazon), but with no or much less (depending on the business model) rent-seeking;
• public commons, goods and services funded by apps with mutual credit cryptocurrencies, rather than taxes or donation. See also Commons Engine, as well as insured crowdfunding and liberal radicalism.
• Food marketplaces direct between farmers and consumers, with food backing currencies. See Producer’s Market.
• Every other centralized app that runs over an internet network, whether or not it involves transactions, could be ported over to run on Holochain.
• commoning of manufacturing and the production of goods and services, with Producer’s Market above being an example for food. I wrote more about this here and here.
• Land-based currencies and apps (like marketplaces) for real estate, possibly with the aid of Startup Societies. A forum thread regarding this is available here.

Other than apps running on Holochain, there’s lots of innovation compiled here:

Sustainable energy innovation compendium - HackMD

Q&A

How does this complement Redgrid?

I don’t think Redgrid have proposed anything about commoning of electricity grid infrastructure, or commoning EV fleets, charging infrastructure, and asset ownership. As mentioned above, these apps could be built on the Internet of Energy, to the extent that it is compatible with this, or built separately. Increased, faster and appropriate investment in grid infrastructure can be enabled by distributed commoning, which helps to accelerate the uptake of distributed renewable energy, particularly for utility scale, which has suffered from a lack of investment resulting from constraints, lack of transmission grid infrastructure investments, and marginal loss factors. Distributed asset ownership of renewables enables more distributed control of energy, empowerment, increased uptake and greater equity, for example for large projects where electricity is shared between many, like utility scale, community solar, commercial solar, and microgrids. Commoning of EVs will similarly help accelerate growth in use and investment (through stigmergic collaboration and distributing decision making, power and agency), and help to power the ground transport sector from renewable electricity rather than fossil fuels, and safely transition to a safe climate.

Redgrid is developing smart energy apps built on the IoE, starting with demand response management, followed by adaptive electricity trading and other uses.

What do you think makes now the time right for Australia’s grid to adapt this type of innovation. Do you see market signals that it’s the optimal time to introduce this?

Transmission upgrades have been recommended, e.g.:

• https://aemo.com.au/energy-systems/major-publications/integrated-system-plan-isp/national-transmission-network-development-plan-ntndp. “Prudent network investment is crucial for an affordable, reliable, and sustainable power system”
• https://www.abc.net.au/news/2016-12-12/power-grid-in-need-of-multi-billion-dollar-upgrade:-report/8111468
• https://aemo.com.au/-/media/Files/Electricity/NEM/Planning_and_Forecasting/ISP/2019/ISP-Insights---Building-power-system-resilience-with-pumped-hydro-energy-storage.pdf
• https://www.transgrid.com.au/what-we-do/projects/current-projects/ExpandingNSWQLDTransmissionTransferCapacity/Pages/QNI%20%28Queensland%20NSW%20Interconnector%20upgrade%29.aspx

This kind of innovative technology enables distributing the planning and investment in energy assets, including grid infrastructure. Top-down planning and investment approaches from AEMC, AEMO. TNSPs and DNSPs are not delivering quickly enough on development of the infrastructure that we need. Last year in 2019, investment in the utility scale renewable sector fell by 56% (Hannam, 2020). While this kind of innovation is radical, you have to start making progress, or it may be delayed indefinitely. Holochain is ready to start building apps on it. By distributing governance and economic activity, you allow for stigmergic collaboration and innovation that can happen more quickly, due to greater empowerment of individuals to sustainably make a profit that benefits people and the planet, and not just themselves.

Redgrid successfully raised the maximum investment target in an equity crowdsale in September 2019, being the 6th Australian company at the time to do so (Twitter, 2019; Birchal, 2019, Facebook 2019).

Conclusion

I’m seeking to work with potential customers, partners, and gain support from investors, and people in general, in order to secure some income to fund development and ensure long-term sustainability of development efforts. Note that I do have a part-time job. Progressing with this proposal will require working with grid owners, governments, utility-scale renewable energy developers, microgrid developers, or large energy users. If you have any questions or would like to get in touch, feel free to comment below or send me a message e.g. via my contact form on LinkedIn (there’sno character limit, unlike connection requests).

Other ideas

Other ideas that I have include:

• Commoning EVs, EV charging stations, and EV services; energy generators and storage; and other goods and services.
• emissions trading with Holochain
• Manufacturing and more with Sovereign Accountable Commoning and Holochain (this ties in to commoning goods and services)

It is possible to envisage solar retailers, developers and energy service companies (ESCos) owned and operated by a community, which can make innovative retailers even better, such as energy retailers like Power Club, Enova, EnergyLocals, and/or Amber Electric. This concept can be extended to running as a Sovereign Accountable Commons with unclosable carriers. Such SAC ESCos could encourage energy conservation; provide energy efficiency devices and retrofit services; install solar, batteries, or other energy storage and clean energy products; and be governed in a distributed fashion.

There are substantial benefits derived from using Holochain, and maybe also the Commons Engine. Benefits include transitioning to a fairer, more equitable economy, where people help each other more in a mutually beneficial, reciprocative way, rather than having extractive relationships where one benefits more than the other, leading to inequalities in power, influence, and wealth.

Related reading

Resources for how a mutual credit cryptocurrency that is backed by productive activity may be designed include the following:

• Holofuel economics 101
• Other resources detailed in another post discussing these ideas here: https://forum.holochain.org/t/draft-renewable-energy-generators-as-a-commons/1633

Further related reading includes:

• The Nextnet Series
• more happ ideas.
• https://investorengine.org/: unsure about how it fits with commoning or could be repurposed for such. For commoning it seems better to not give too much of revenue to a business owner, since we want to avoid wealth inequality and concomitant issues.
• this is a video on one project that is providing electricity to communities that did not have it in Liberia, using biomass. However, it probably isn’t sustainable to use biomass for stationary electricity and ground transport, in addition to using it where it will be needed more with aviation. There isn’t enough waste biomass to use for all of these purposes, let alone even just aviation. Primary biomass should not compete with other land uses, and should not cause deforestation—especially of old growth or even secondary growth forests. Primary biomass, if used at all, should ideally only be grown in marginal areas such as grasslands, as wind buffers in farms, etc.
• There’s other social enterprises that do rural electrification, such as Village Infrastructure, Barefoot Power, and Pollinate Group.