The evolution of electric mobility demands the creation of a broad charging infrastructure that would bring safety and convenience to drivers recharging their electric vehicles. The viability of this infrastructure depends on the interaction of multiple parties, requiring a relationship of trust between them. Blockchain technology can be applied to this scenario to bring security, transparency and trust to the relationships of this system.
Electric Vehicle Recharging
Electric vehicles charging can be done at public (such as highways, fuel stations, shopping centers etc.) or private (residences) charging spots. Despite the practicality offered by residential recharging, a public charging network is considered essential to ensure safety for drivers and reduce the effect known as recharge anxiety, the fear of your electrical vehicle going without power during a journey.
The authorized public and private recharge models, as well as the rules and conditions for their commercial use, are defined by the regulations of each country. In Brazil, ANEEL (Agência Nacional de Energia Elétrica, the Brazilian National Electricity Agency) — through regulatory resolution 819/2018 — established, among other points, that any interested party is allowed to carry out activities related to recharging electric vehicles, including commercial activities, at freely negotiated prices.
Thus, according to this resolution, any company can act in the provision of recharging services for electric vehicles. The development of a broad system is, thus, encouraged, driving the expansion of infrastructure and increasing the supply of recharge services for consumers. This system can be composed of several actors that interact with each other, as illustrated in Figure 1.
Figure 1: electric vehicle charging system
In the center of Figure 1, we have the Charging Station Operator, which operates a network of charging stations — those can be public, private or a combination of the two. Their business model can include B2B (Business to Business) or B2C (Business to Consumer) recharge services with different service pricing models.
The charging station operator can charge for the energy consumed, for the time the vehicle is connected to the charging station, for a closed price or offer packages with different tariff combinations.
The charging station operator’s customer — represented by the Electric Vehicle Owner in Figure 1 — accesses the operator’s charging network to recharge their vehicle. This process can be done, for example, through an app or RFID card, which will authenticate the user and authorize their access to a recharge station.
Eventually, this customer may not be a person, but a business. It could be a company that has hired the charging station operator to perform the recharging of its fleet of electric vehicles or even an eMSP (electric Mobility Service Provider) — a company that offers recharging services to customers through a network of recharging stations of one or more charging station operators.
The charging station is not necessarily owned by the operator. Such a place can be, for example, a commercial establishment, a company, a parking lot, a gated community or even a residence. In addition to the physical site for installation, charging stations are usually connected to the local power grid. Therefore, the charging station operator must compensate the site owner for the use of energy and use of the site.
Trust in the system
Even in the simplified model (Figure 1), it is possible to observe the interaction of multiple parties — in this case, the owner of the electric vehicle, the charging station operator and the site owner. To use the recharge service, the owner of the vehicle pays the operator, who, in turn, remunerates the site owner for the use of energy and physical space.
Trust in the relationship between these parties becomes essential for the success of this system. For example, the owner of the vehicle must trust that the operator will charge them properly, according to the energy used. The site owner, in turn, needs to trust that the charging station operator will adequately compensate them for the use of their electricity.
The issue of trust can be compounded in a scenario where only the charging station operator controls the hardware and software infrastructure of the solution — which is the most common case. Thus, if the charging station operator controls the equipment and charging data, how will the other parties know if the values reported by the charging station operator are correct?
The problem can become even more complicated if we consider other parties that can be part of the system. For example, charging station operators may have roaming agreements, allowing users of each operator to access the network of stations of the other operators. In this relationship, there must be trust between the operators in the charging process, so that there is correct remuneration of each party involved.
Blockchain as a trust mechanism
Trust models are traditionally established through centralized systems, which use an intermediary to validate transactions between the parties. A classic example is the real estate registry office, which mediates transactions between buyers and sellers.
However, this model has some disadvantages, such as the increase in bureaucracy for the execution of transactions between the parties. In addition, the social changes of recent years have impacted the trust placed in these intermediaries, which has motivated the search for new mechanisms of trust.
“People have lost confidence in institutions, the private sector and even democracy. There is an immense demand for new ways to establish trust, be it in governments, companies and even in personal relationships. Blockchain is a technology that came up for exactly that: generating trust, in a distributed way.”, Ronaldo Lemos, ITS Rio.
Blockchain functions as a distributed database — that is, information is not under the control of a single company or institution, it is distributed over a network of computers (or nodes) of the parties involved, thereby distributing control over the data. Thus, the technology promotes the decentralization of information, eliminating the need for a central authority, since both the registration and validation of transactions are done by the nodes of this network.
Therefore, blockchain could be used to record the recharge transactions of electric vehicles, allowing the parties in system to have access to the stored information, as well as distribute the process of validating information. Data access transparency and the participation of stakeholders to validate information can bring more confidence to system parties in a natural way.
In addition, smart contracts can be used to perform some actions automatically, allowing the automation of contract clauses. Smart contracts can be understood as code snippets that are executed when a transaction is performed in the blockchain. Thus, when registering a vehicle recharge on the blockchain, for example, the cost calculation, as well as the correct distribution of the amount paid to the other parties, could be done automatically according to the conditions of the contract.
In addition to generating confidence that the clauses of the contract will be executed correctly, without human intervention, this automated process allows costs and time of transactions to be reduced, turning business processes more efficient.
A study conducted by the University of Waterloo, entitled “Mitigating Trust Issues in Electric Vehicle Charging using a Blockchain” evaluated the use of blockchain technology in an electric vehicle charging system. The study proposed a methodology for applying blockchain to existing recharge solutions. The methodology consists of the following steps:
- The first step is to identify the parties involved and their relationships of trust, registering trust problems that may make the use of blockchain unfeasible or unfair;
- In the second step, the team designs a minimal blockchain system, including smart contracts, that solves only the trust issues identified in the first step;
- Finally, with the minimal blockchain already operating, the remaining modules of the system could be migrated iteratively over time.
According to the study, the use of this methodology allows centralized legacy systems, under the exclusive control of one of the actors, to migrate to a distributed model. The methodology is being applied with a partner charging station operator.
According to the authors of the study, blockchain can be an interesting solution for electric mobility, bringing trust and making recharge processes more efficient. This type of method could even enable the development of a machine-to-machine communication system in the future, which would enable autonomous vehicles to recharge at stations without the need for human intervention.
This article showed that electric mobility systems can have multiple actors interacting in processes (such as electric recharging) that require trust relationships. Although these relationships can be established through bilateral contracts, validated by intermediary institutions, this process can be inefficient. The expansion of the e-mobility ecosystem, with new actors and different business models, can further increase this problem.
Blockchain emerges in this process as a consensus mechanism, which can help establish trust relationships between parties by making use of smart contracts to automate contract clauses and business rules, reducing costs and increasing the efficiency of these processes.
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