Renewable Energy Certificates using DLT | Iván Razo

CELEBRATING EARTH DAY 2022 * Sustainability is an increasingly important topic of conversation and we'll dive into how the rise of new technologies like blockchain can help.

What about blockchain technology makes it so appealing for addressing challenges related to climate action?

Hear all about this from Computer Scientist Iván Salvador Razo Zapata, lecturer and researcher at The Instituto Tecnológico Autónomo de México (ITAM). His main interests are in smart grids and blockchain and he works with a group of both undergraduate and grad students like Emiliano Gutiérrez at ITAM. They are busy working on the design and development of a proof-of-concept to manage renewable energy certificates for clean distributed energy resources. The proof-of-concept will be deployed using tools from different organizations such as the Energy Web Foundation, Ripple’s partner on decarbonized blockchains.

Transcript

Lauren Weymouth (00:00):

Hello. I'm Lauren Weymouth your host of All About Blockchain and lead the University Blockchain Research Initiative at Ripple. Today, we're spinning the globe to Mexico speaking with Ivan Razo, assistant professor of the Instituto Tecnológico Autónomo de Mexico, or ITAM, for short.

UBRI partnered with ITAM in 2020, and has had the privilege of working with both professors and students to further research areas, such as renewable energy. Ivan is a computer scientist and co-founder of Cocoa, an innovation driven organization advocating the use of digital technologies to improve sustainability. He's a visiting lecturer and researcher working in the Department of Digital Systems at ITAM.

Now with a passion for blockchain and an interest in clean energy, he's working together with students to make strides in this industry. One of his grad students in Emiliano Gutierrez is also joining to dive deeper into their proof of concept, all to highlight blockchain efforts for environmental protection in celebration of Earth Day. Ivan, Emiliano, thanks for joining us today.

Emiliano (01:05):

Thanks for the opportunity, Lauren. We're very happy to be here.

Lauren Weymouth (01:09):

when did you first get interested in blockchain and what are your initial thoughts on this emerging technology?

Ivan Razo (01:13):

Well, it goes back to 2014 when I was doing a research to stay in Belgium. Belgium, besides having very good beer, they also have a nice, ecosystem for innovation. So there I discovered, through a European project, um, this technology. And I was really, amazed at that time what people were, suggesting on how to use the technology. 

Lauren Weymouth (01:35):

And so as a computer scientist how do you feel that your background has influenced this specific interest in blockchain that you've chosen?

Ivan Razo (01:43):

for sure then my background is uh, very strong influence in this technology. as a matter of fact, the technology is actually a combination of different, technologies that have been around for quite some time already. So, like, this distributed systems, like security, cryptography, all those technologies that were already there are now put together to give rise to this new technology called blockchain.

My background computer science is a strong influenced. what I think it more important probably with this technology is that, some people see not only as, innovative technology but also like, institutional innovation, meaning that It can provide new ways in which,institutions can, interact with each other.

Lauren Weymouth (02:24):

Okay. Now sustainability has been an increasing important topic of the conversation with the rise of new technologies like blockchain. Emiliano, what sparked your interest in addressing current sustainability challenges?

Emiliano (02:35):

here's an urgent need worldwide and a rising need for solutions that counteract our current carbon footprint and the economic duties that actually harm our environment. So while working with blockchain technologies and looking beyond what can be done in terms of distributed ledgers and just, speculation, we saw the opportunity to tackle some real challenges both in the energy industry and beyond that can spark more innovation and sustainability and, do things better more efficiently with blockchain. I would say just the spark of interest is just what we see evidently happening to our climate worldwide and, a serious want and drive for doing things in a more efficient manner and somewhere that will take us eventually to a carbon neutral economy, right?

Lauren Weymouth (03:19):

Right. And you're working with a group of students that uses renewable energy certificates for distributed generation. Can you tell us about the proof of concept that you have?

Emiliano (03:29):

So we started collaborating, or delving into this opportunity with blockchain depths ITAM. So it's, a blockchain lab with ITAM and also that Ivan is leading right now. Uwith, let's say an entrepreneurial project looking to have, a DER. So distributed energy resources connected between each other and able to both, help the grid do more efficient transactions, but also allow these smaller generators to chip in into the game of, renewable energy credits that was only at the moment.

limited to bigger generators, right? So the idea was to democratize access to these renewable energy credits for smaller producers to be able to also have a financial incentive to go green and well,make, a so- more solid financial impact on that end, right? So both, making it more economically feasible, but also promoting the use of solar energy to begin with. So we started working with that and this proof of pop concept started developing. And that's where we got to know energy web foundation and beyond other, technologies as well. And that's when we started collaborating with them, right? 

Lauren Weymouth (04:34):

And so what has Energy Web Foundation done for your proof of concept?

Emiliano (04:38):

So in terms of education, the Energy Web a strong supporter. we started, collaborating with them, the end of 2020 we established a good partnership initially, focused on, on deploying, a node eventually, but mostly linked to the education of rising generations and, he understanding of what do with blockchain technology and with the Energy Web tool kit, right? So initially it opened our eyes in terms of what can be done with, energy web, for example, energy web zero and their technology, what has been done already worldwide, and the potential applications of that technology in Mexico, Latin America, and beyond, right?

The exposure and the conversations with their team and with the users already in the ecosystem, like really enlighten us on what can be done and how we can use that. I think a, a very important, takeaway and insight is that we as, let's say, as entrepreneur, academics, developers, we need to act fast because the ecosystem and the technology is changing and evolving very fastly. So if we want to keep up with the pace, we want, we need to integrate it and develop at the speed of the whole blockchain ecosystem development, right?

Lauren Weymouth (05:46):

And maybe we could take a quick step back. Emiliano, a lot of our listeners are trying to wrap their heads around blockchain for the first time and really, truly understand why this technology is being used across various sectors. What is it about this technology that makes it so appealing for addressing challenges related to climate action?

Emiliano (06:04):

One thing very common or important to avoid, let's say, in the sustainability ESG side is greenwashing, right? What we know in terms of blockchain is that it can provide accountability. So in two words, I would say accountability and, and financing. So blockchain can provide accountability for the operations and the processes of different, industries, of course, for one. And the one we're addressing right now is, the energy system. So it can really go down to details in terms of how much energy has been generated by whom and really certify and decentralize the access of this information. So it makes us more reliable, more accountable. And, and also the large amount of funds that are being directed to this space, right? Both from institutional investors, as Ivan was saying, but also retail investors.

And it has a lot of attention, so the capacity to generate new business models, to channel these funds into climate action in an accountable way, I think that's what makes it, very valuable and a key thing, or a key technology to really scale the climate action that we're seeing. And beyond that, the ability with blockchain unlock value from already existing resources and incentivizing the adoption, or the creation of more sustainable resources in this case solar panels or distributor energy resources. But you can take it all the way to the food industry to other kinds of industries that have a strong, environmental impact.

Lauren Weymouth (07:25):

Right. Ivan, ITAM offers courses to students related to blockchain, Blockchain basics, and also renewable energy resources. Can you tell us more about these courses?

Ivan Razo (07:35):

Yes. Well as related to energy and sustainability in general are, quite,, serious within ITAM. There's actually a- energy center and natural resources center at ITAM where there are plenty of courses of tackling, not only energy, but in general natural resources. So sustainability is quite an important, topic within ITAM. And even, within other courses.

Like for instance, I can share with you, some of the things that I promote with, students that, in other courses like artificial intelligence or machine learning, where I invite the students to work on projects addressing challenges like the once proposed by, United Nations through the sustainable development goals. So even if the course is not per se, focus on sustainability, sometimes there is opportunity within the courses to also promote that kind of thinking, to take sustainability serious.

Lauren Weymouth (08:26):

And it also sounds like a great way to give students a foundation to then go on and work on these projects. how else has the university supported your projects in addition to rolling out these courses?

Ivan Razo (08:37):

Through the establishment of dedicated labs, for instance, blockchain labs is one of those labs. But we also have FinTech labs and also an advanced manufacturing labs where, sustainability also is addressed in some of the topics.

Lauren Weymouth (08:50):

Okay. And it's an interesting conversation Ivan, because you're not just a lecturer and a researcher at the school, but you're an entrepreneur, right? You work with COCOA, bringing efficiency and transparency to global efforts for achieving sustainable development goals. How has the field rapidly evolved? What are the new players entering the space? I think we'd all like to hear more about the efforts towards improving sustainability in the industry as it's evolving.

Ivan Razo (09:16):

Yeah. I think at the beginning it was mostly IT people or computer science people that were joining the ecosystem. But, after the benefits of this technology were revealed to more people, I think, also the people from, backgrounds such as law, accounting, sustainability of course, we're joining. And I think right now you see a plethora of different backgrounds of different places from different sectors also joining. as Emiliano said the technology is evolving very fast and also the potential use cases are also evolving very fast and are emerging, continuously now.

Lauren Weymouth (09:51):

Emiliano, what are some of the sustainability goals that you have for blockchain that you'd like to see achieved in the future, not just the project you're working on, but going forward five years?

Emiliano (10:00):

Absolutely. As many might or might not know, there's this rising, movement within DeFi,, so the centralized finance that's called ReFire right? So a region area refinance, so funds being channeled to sustainable initiatives.Let's say the most adopted use case are carbon credits and reforestation, right? Which is very good and it is great. But we need more industries to follow suit and standardize their protocols to be able to quantify positive impacts, right? We’re, for example, right now with another company working with, vertical farming.

So trying to quantify the impact that vertical farming has in the positive impact compared to traditional agriculture. So we would like to see more of that worldwide. Also having, liability to see, for example, operations in the ocean being, recorded on the blockchain. So all the things that's beyond carbon, which is a hot topic that you can also quantify and, again, make accountable for, or make all the parties involved accountable for and channel the funds to these initiatives that will drive climate action and really make it scalable. Right?

So we'd like to see, for sure, more of that, and just people become more aware, right? Become more aware and, for the blockchain space to lose that stigma of, being unhealthy for the planet for it to be leading actually on the other hand, the climate efforts, which we see, already starting to happen. For example, with ripple being climate neutral through Energy Web, with near protocol, for example, being carbon neutrals to south pole and other, blockchains as well taking that step towards carbon neutrality team and even beyond that and making a positive impact, right?

Lauren Weymouth (11:35):

Right. And looking at your current proof of concept, what are some next steps? Can you share anything about how it's being rolled out?

Ivan Razo (11:41):

Yeah. So right now we are building,the group of, the proof of concept together with a few students. the next steps are about fully testing within the lab, the proof of concept. So we will initially develop the proof of concept using some blockchain tools, but, we also want to test different tools. So like Energy Web Foundation tools, XRP tools, IBM tools, different kind of tools. So that the students can really master different technologies to develop similar ideas. In that way we can show the benefits or advantages and disadvantages of each kind of, we can call it a flavor of proof of concept, right?

So for us, from the academic point of view, it's very important to do that. And also, uh, with this kind of contribution, we can go outside to the market and also to the government and probably show them, look, this is what we can build and this is how, the benefits that you will get if you decide to go and implement these kind of solutions. So in the next steps is to fully test this first proof of concept, then replicate, same idea using different technologies, analyze advantages and disadvantages of them, and then probably show them at the industry and then the government.

At the beginning, probably we will just have a, within the blockchain lab at the time, we will have probably a showroom to show in the different proof of concepts.we are planning to have, you know, also a week dedicated to blockchain and all the topics related to blockchain. So maybe we will ask also students to listen to your podcasts so that they get familiar with all the kind of topics around blockchain.

Lauren Weymouth (13:11):

Well, I think it's really valuable that you are reviewing and testing all different types of tools. I think that really gives the students not only the ability to learn the pros and cons, but hopefully you're able to collaborate with the entities like energy one, or the XRP ledger, or IBM to give them feedback on what's really working or not working, or maybe provide some input for upgrades. Right?

Ivan Razo (13:33):

Yeah, absolutely.

Lauren Weymouth (13:34):

And then, so will you choose a winner or will you try to work on interoperability, so making it like a multi chain project?

Ivan Razo (13:41):

Yeah. I, I think the second option is more interesting for us, like to develop pro- probably multi chains, make them, to inter operate with each other. So that's probably one of the things that we will be looking into as well.

Lauren Weymouth (13:53):

This question might be for both of you. Your next step after you develop the prototype is to roll it out to your government and probably locally or in the country of Mexico. This is a very global audience of listeners for this podcast, is there a way that our own listeners can anticipate being able to use, utilize the product that you're putting forward?

Emiliano (14:10):

I think absolutely. I mean, the vision is global, right? Even beyond the government, we see the potential, as mentioned, distributed energy resources, be houses, e commerces with solar, and rising more communities that have, for example, peer to peer energy trading. we see that as a potential root for growth and commercialization. So I would say next year or so when we roll out our first MVP, for sure, it'd be interesting for people worldwide to take a look and support, right? on one end it's good that you can fund and that's also one of the beautiful things about crypto and blockchain that you can fund and participate with community developments worldwide regardless of where you are. Right?

That'd be good for people to join. in terms of just other sustainability adoption, I think, there's a lot of, research to be done and information to be analyzed. then I would say like for all those crypto natives and people that are already investing and they're having, a stake there to look to some climate, related initiatives and diversify part of the funds, right? So you can do good and do great, and do well. that's what we also want to strive for.

Lauren Weymouth (15:19):

Yeah. And I think that's something that everyone we interview on this it strives for, right? There's a lot of research development that needs to be done in the space in general, even looking at privacy, and security, and interoperability, and scalability. Right? I'd love you to dive a little bit deeper into, when you say peer to peer energy trading, can you spell out what that looks like?

Emiliano (15:38):

Sure. Let's say we have a close community... And, Ivan feel free to interrupt or add. But let's say we have a, a community, and just taking it to extreme. We have an off grid community, so not connected to direct grid but they install, let's say, solar panels and renewable energy sources. and instead of relying on a main grid operator or energy retailer, they're able to transact within each other the energy they produce, right?

From house A to house B, to the neighbors or to the neighbors across the street, they sell directly the energy without having to go through an intermediary, right? that's, that's basically the core of it. It's already being done in a couple of parts in the world, but, it's basically cutting out the middle man and just  doing a more efficient energy transaction system.

Lauren Weymouth (16:25):

Perfect. I think that will make a sense to a lot of people. All right. 

Where can our audience learn more about your project?

Ivan Razo (16:32):

Yeah. Well, definitely looking at ITAM's work page at the webpage also of the center for,energy and natural resources. There we will be probably posting, the progress, through the development of the proof of concept. So they should, keep an eye on this.

Lauren Weymouth (16:48):

Ivan, you've got an interesting perspective in industry in Mexico. Can you tell us about what's happening overall in the country with blockchain research and development and advancement?

Ivan Razo (16:59):

Yes. what I've seen happening here in the country at the beginning, people are interested in blockchain because of the cryptocurrencies. So they try to understand what's going on there and they try to be involved in that kind of ecosystem. But then again, as soon as they see the potential of this technology to be applied in other areas, they want to learn more about what is this technology called blockchain? So what is this about? And then, some of them, for sure they start joining some initiatives.

So like, for instance, the one related to, not only to Cryptocurrencies, but for instance NFT or other kind of topics like that. But also more, issue related for instance to environmental sustainability. Here at ITAM, for instance, I also have the students working on projects related to mobility, energy communities, research management for, urban planning. I think what is happening is, people hear about this technology and then they understand a little bit more about the technology.

Ivan Razo (25:51):

And then they just start thinking about where to apply it, because they understand the benefits and then they see, okay, it sounds great what I can do with this technology, so let's try it in this kind of context. And that's what is happening. of course, a lot of our organizations also, not only universities and, research centers, but also,  private initiatives, training more people on this kind of topics and developing solutions for different kind of a scenarios.

Lauren Weymouth (18:19):

Yeah. And I think we hear that a lot, right? People's initial interest is cryptocurrency. And then when they learn about the underlying technology that supports cryptocurrency, they realize that there's so many other applications that's only, crypto is only one use case of, and we're very busy around the world trying to figure out all the other use cases for how this is gonna roll out in our future. 

Environmental protection is so important and we're all responsible for improving sustainability efforts to create a better future. All About Blockchains' glad to honor Earth Day and be a part of this meaningful conversation. Ivonne, Emiliano, thank you for joining us for being an advocate of using this emerging tech to tackle sustainability challenges and a shout out to all the students who are working with you on such an important proof of concept.  We're excited to see how this use case positively impacts the industry. Listeners, thanks for your time and continuous feedback, if you have any questions about this episode or feedback for future episodes, please reach out. Until next time.

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