Russia's Power Grid Company Tests Blockchain for Power Meter Data

UPDATE (Dec. 18, 18:50 UTC): An earlier version of this story incorrectly stated that Waves Enterprise had been chosen as the contractor for the project. It was one of five companies that tested blockchain systems with Rosseti, which has yet to name a contractor to build one, according to an executive whose quotes have been added to the article.

Russia’s national power grid company Rosseti has tested five systems for electricity bill payments based on distributed ledgers, including ones by software giant SAP and blockchain startup Waves.

Waves Enterprise, the enterprise blockchain arm of Russia-based Waves, said in a blog post that its pilot involved 400 households in two Russian administrative regions.

In the next phase, which is expected to start in early 2020, the entire regions of Kaliningrad oblast and Yekaterinburg will use the system. The next step will be expanding it to all of Russia, according to Waves Enterprise.

The system Waves Enterprise developed will access data from the power meters in houses and apartments, store it and distribute consumers’ payments between the company generating the electricity and the power grid operator, according to the announcement. This is intended to make the calculation of the payments more transparent and reduce what households owe for electricity, a debt that has reached over $12.5 billion in Russia in 2019.

Households will be able to see how much power they are using via an app and choose a more suitable tariff such as opting for one that provides a cheaper price during the night hours, according to the announcement.

Along with SAP and Waves, three companies piloted their solutions for Rosseti, said Alexander Sadov, head of the project management at Rosseti Ural, the subsidiary that is supervising the project. They are Digital Horizon, Digital Energy Laboratory and B41.

The winner, however, is still to be chosen in a public call for bids scheduled for Q1 2020, and the winner in the bid will be able to build a distributed ledger-based solution for electricity consumption records, with the plan to launch into production in the mid-2021, Sadov said.

“We see now that the technology is working. With it, we can check that the electricity consumption data is consistent,” Sadov said.

According to him, using a distributed ledger can help prevent the manipulation of data, which can happen when the intermediaries that accumulate the data from consumers pass it to the generating companies for billing.

“We believe the system should be developed on a private blockchain and on a platform developed in our country, meeting our demands for data protection and cryptography,” the chairman of Rosseti, Sergei Semerikov, said in the press release. Also participating in the pilot was Russia’s largest privately owned bank, Alfa Bank.

Rosseti previously announced another local blockchain pilot in collaboration with Gazprombank, Russia’s oil and gas giant’s subsidiary, and the venture fund Digital Horizon.