EnergyNexus - Cardano as a Hub for Energy Blockchains

[GENERAL] Name and surname of main applicant

Carlsson

[GENERAL] Email address of main applicant

info@energynexus.io

Additional applicants

Will be identified at the end of this first phase of the project

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

7

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.” .

There are no dependencies at this point.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] If NO, please describe which outputs are not going to be open source. If YES, please write “Project will be fully open source.”

Project will be fully open source.

[METADATA] Category of Proposal

Other

[METADATA] SDG rating

SDG 7 - Affordable and clean energy

SDG 11 - Sustainable Cities and Communities

[IMPACT] Please describe your proposed solution.

According to a recent report by WEF, Stanford Woods Institute for the Environment, and PwC, over 65 energy- and environment-focused blockchains exist. These blockchains offer various use cases, such as new business models for energy markets, real-time data management, and integrating carbon credits or renewable energy certificates onto the blockchain. Legacy energy sectors like oil and gas can also reap benefits from implementing these technologies. Several large-scale oil and gas conglomerates (e.g. BP partnered with the BTL Group, Shell in the project Vakt, Chevron the Oil & Gas Blockchain Consortium) have already invested in and implemented blockchain technology, driven by its potential to lower costs and mitigate environmental harm. These blockchains operate with their own set of participants, protocols, jurisdictions, and standards.

Several Ethereum-based projects have attempted to place themselves as intermediaries between energy blockchains, e.g. Energy Web Chain, WePower, and Powe Ledger. And other Ethereum-based projects also aim to facilitate interactions between blockchains and regular consumers, e.g. Power Ledger, Grid+, LO3Energy. These projects' challenges relate to adoption and scalability, regulatory and legal frameworks, interoperability, market fragmentation, and lack of trust and security.

The EnergyNexus project would also have to address the same challenges. It is a significant task which requires a thoughtful approach and perfect planning. A methodological and scientific approach similar to creating Cardano is needed. Hence, the first step EnergyNexus is to prepare a report providing an overview of how all these issues and challenges could be addressed. Later, deeper analyses would likely be needed in particular areas too.

The objective is to establish EnergyNexus as the intermediary ensuring interoperability across energy blockchains, consumers, and producers. A flexible and modular framework that could be adapted to the requirements of different energy blockchains, such as technology requirements and the jurisdiction they operate in. Cardano is an excellent option for this task due to its robust and secure architecture, and it has already thought about future regulations and how to handle privacy issues.

The first phase (this funding round) will be a literature study to collect information from the public domain. Later, the EnergyNexus project will engage with energy communities, utilities, and other entities already operating or planning to use energy blockchains.

The project's impact in this first phase, which is to prepare the report, will be determined based on the reception of the report prepared. Interest from the Cardano community and other stakeholders would encourage applications for further Project Catalyst funding or to seek external financing. At a later stage, the success would be demonstrated by the tracked energy and energy transactions of energy blockchains and other entities connecting to the EnergyNexus platform.

The energy system would benefit by becoming more efficient since energy can be traded across different platforms. Consumers would benefit from lower energy prices since the competition between increases and synergies reaped between supply and demand.

Overall, the EnergyNexus project would also support the challenge to combat Climate Change since it helps solve environmental issues by integrating renewable energy and optimising energy use.

[IMPACT] How does your proposed solution address the challenge and what benefits will this bring to the Cardano ecosystem?

The EnergyNexus project aims to develop the necessary infrastructure and tools for Cardano to become the central hub for energy trading among various blockchains and energy traders. This initiative seeks to introduce new users from different energy industry sectors to the Cardano blockchain. These users may include energy consumers, individual energy producers, energy communities, traders, and utilities.

Energy blockchains are a future technology increasingly used by, e.g. utilities, energy communities, and individual prosumers. Some energy companies are already using them, and the technology is proven.

Estimating the number of new users brought to Cardano at this early stage is impossible, but it could be immense if the project succeeds. The energy system is vast and essential for our society. As our society must move to a more sustainable energy system, energy blockchains would be integral to support this transition.

[IMPACT] How do you intend to measure the success of your project?

In the longer term, the measure of success is the number of customers using the EnergyNexus platform and the number of transactions made. The innovation will affect Cardano in the medium and long term as the EnergyNexus services are launched. 

In the project's first phase, the success would be measured in the plan's quality, covering technology choices, incentives, market and competitive analyses, sales strategy, operation and implementation, funding requirements, and risk analysis. The ambition is to create a user-friendly, transparent, flexible, cost-competitive, secure service that appeals to customers.

The productivity and growth of Cardano will, at first instance, allow more transactions. Also, other projects of Cardano will benefit since they offer their products, e.g., payment solutions, stablecoins, oracles, and storage. If successful, the number of transactions can be vast, many surrounding applications are to be built, and existing Cardano projects can provide services. 

The prospects are reasonably good since a dominant similar service has yet to be available on other blockchains. On the other hand, it is also clear that it is a large and complex project with many potential pitfalls.  

[IMPACT] Please describe your plans to share the outputs and results of your project?

The reports and subsequent software will be made available to the Cardano community, for example, on EnergyNexus.io and other suitable websites within the community. The project will also engage potential platform users, such as other energy blockchains and utilities.

The open-sourced software and accompanying documentation will be published on the EnergyNexus website and GitHub.

During this funding round, information and data will be gathered, and options will be analysed to determine the optimal strategy for realising the EnergyNexus of Cardano. The output will be a report. Once a draft report is prepared, the project will reach out to community members who have shown interest and ask them to review it. An additional objective at this stage will also be to identify potential partners of the EnergyNexus project.

The infrastructure will be built in subsequent funding rounds, including APIs, databases, and dashboards. During these later phases, collaborations will be established with other Cardano projects, such as stablecoins, DEXs, payment solutions, and oracles.

[CAPABILITY/ FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability?

I have extensive experience in project management and research within the energy sector, as well as working on energy policies at an international organization. I have authored and co-authored various publications, including journal publications, technical reports, and briefs.

After the initial phase of this project, I will reach out to members of the community and potential future users of EnergyNexus to review the report. This will also help in identifying individuals who would be suitable collaborators for subsequent phases.

The project will progress through multiple stages. For the current phase, the EnergyNexus project only requires a small amount of funding. This funding of the first phase is disbursed at specific milestones.

Once the report for the first phase is finalised, further funding options will be considered.

[CAPABILITY/ FEASIBILITY] What are the main goals for the project and how will you validate if your approach is feasible?

The long-term objective is to establish Cardano as the Energy Nexus where energy blockchains interact and trades are settled.

Several goals will be set for the completion of the first phase of the project (this funding round). The findings are summarised in a public report with the following chapters. Some changes to the structure of the report are likely, though, as the knowledge and understanding deepens as the report is written.

Title: "Suitability and roadmap for establishing an Energy Blockchain Nexus on Cardano: Addressing Adoption, Scalability, Competition, and Regulatory Challenges"

1.Abstract 

2.Introduction 

3.Overview of energy blockchains and their features

• Exploring the fundamental concepts of energy blockchains
• Highlighting the benefits and potential use cases in the energy sector

4.Regulatory framework for energy blockchains in the US and the EU

• Analysing the current regulations and the implications for energy blockchains
• Comparing the regulatory frameworks in the United States and the European Union

5.Overview of energy nexuses on other blockchains

• Examining existing energy hubs on Ethereum, Polkadot, and other blockchains
• Identifying their experiences, successes, and challenges
• Lessons to be learned for Cardano and the EnergyNexus project

6.Overview of necessary data transfer and for energy transactions

• Defining the necessary information and data to be transferred for energy transactions
• Proposing options to make the data modular and adaptable to different use cases

7.Settlement and storage of energy erades

• Exploring methods for settling and storing energy trades on the Cardano blockchain
• Discussing the advantages and challenges of different approaches

8.Ensuring correct settlement and addressing non-compliance

• Outlining mechanisms to ensure correct settlement of energy trades on Cardano
• Investigating strategies to handle situations when either party does not meet obligations

9.Incentivising stakeholders in the energy sector

• Identifying options to incentivize and engage stakeholders in the energy sector on Cardano
• Examining tokenomics and reward mechanisms to encourage participation

10.Planning next steps, collaborations, and funding needs

• Developing a roadmap for establishing an energy blockchain nexus on Cardano
• Identify areas that still require more analysis
• Identifying funding requirements and exploring available funding sources

11.Conclusions

[CAPABILITY/ FEASIBILITY] Please provide a detailed breakdown of your project’s milestones and each of the main tasks or activities to reach the milestone plus the expected timeline for the delivery.

1. Prepare a draft report.
2. Month 1: Prepare chapters 3-5
3. Month 2 (milestone 1): Prepare chapters 6-7
4. Month 3: Prepare chapters 8
5. Month 4: Prepare chapters 9
6. Month 5 (milestone 2): Prepare chapters 1, 2, and 10
7. Share draft report with selected community members
8. Month 6 (milestone 3): Integrate comments into the final version of the report.
9. Identify people to collaborate with for the subsequent phases of the project: Prepare chapter 11.
10. Month 7: Final report, published on EnergyNexus.io.

[CAPABILITY/ FEASIBILITY] Please describe the deliverables, outputs and intended outcomes of each milestone.

The output of the first phase of the project is a report. The milestones are chapters of the report, which are indicated in the previous answer

[RESOURCES & VALUE FOR MONEY] Please provide a detailed budget breakdown of the proposed work and resources.

In the funding round, the application is for 50,000 Ada, which includes the costs for collecting data and information, analysis and choosing solutions, writing the report, community engagement on social platforms, and other expenses. The project owner will cover any additional funding requirements in this first phase of the project.

[RESOURCES & VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

A public report will be prepared, outlining a detailed plan to create an energy hub on Cardano. This report will provide valuable insights for other projects with similar objectives.

The preparation of the report will span over seven months, specifically during evenings and weekends, totalling approximately 400 hours. In the EU, the average freelance rates for an engineer range from $50 to $150 per hour. However, for this first phase of the project, I have opted for compensation in the lower range to enhance the likelihood of a positive outcome for this application.

[IMPORTANT NOTE] The Applicant agreed to Fund10 rules and also that data in the Submission Form and other data provided by the project team during the course of the project will be publicly available.

I Accept