Irene Energy saw an opportunity to eliminate the contractual and financial frictions that prevent today’s energy markets from evolving to meet customer needs by building a secure, scalable, real-time micropayments platform.
Empowersnew businesses to enter energy markets with minimal up-front investment
Enablesnew services such as electricity roaming and localized energy re-selling
Protectsusers from fraud with end-to-end data encryption during payment processing
Business challenge story
Democratizing energy markets
Access to electricity is so critical to modern society that it might almost be considered a human right, yet nearly one billion people in sub-Saharan Africa still have no access to any electricity supply. This isn’t just because remote areas lack infrastructure; in Tanzania, for example, around 50 percent of the population live in close proximity to the grid, but only 16 percent of homes are connected to it.
The problem is that installing a connection requires significant up-front investment, which puts it beyond the reach of many families. As a result, every time they need to charge their cellphones, they must pay someone who is connected, and the prices are often outrageously high. It’s estimated that many people in sub-Saharan Africa spend up to 10 percent of their income on electricity, which is more than 10 times higher than the average proportion in Europe and North America.
Irene Energy, a tech startup based in France, realized that many of these issues could be solved by creating an easier, cheaper and more flexible back-office infrastructure for energy service providers. For example, if payment management and processing costs are low enough, it becomes viable for people to pay small amounts of their weekly income into a community fund until they have saved up enough for a new grid connection to be installed. It also enables electricity roaming; for example, a user could charge their phone at a friend’s house, but pay for the electricity themselves, ensuring that costs are shared fairly.
The idea of reducing financial and contractual friction between participants in the energy market is not just relevant to Africa—it also has major implications for energy markets in high-income economies. In Europe, for example, the rise of the “prosumer” (a consumer who also produces electricity from solar panels or other renewables) is fueling demand for a more flexible system of contracts that would allow small-scale producers to re-sell energy to each other and to the grid.
Equally, the growing popularity of electric vehicles is motivating energy companies to develop new services around the concept of “electricity roaming”—where a driver can charge their vehicle at any outlet, and have the cost of the electricity added seamlessly to their home energy bill. This degree of flexibility is virtually impossible to accomplish with the legacy billing systems that most large energy companies currently use.
Guillaume Marchand, Founder of Irene Energy, explains: “We saw a huge opportunity to change energy markets for the better with a secure, scalable, powerful and affordable back-office infrastructure for energy service providers. We just needed to find the right third parties to help us solve the formidable technical challenge.”
Secure, affordable transactions at scale
Irene Energy knew that blockchain technologies were the key to building the solution it needed. As members of France’s vibrant and close-knit financial technology community, its founders were already aware of Talium, a company with a reputation for delivering successful projects built on blockchain technologies. The Irene Energy team reached out to Talium for support with the design and delivery of the new platform.
“Talium helped us evaluate all the blockchain technologies, and Stellar was the best option because of the very low cost per transaction, and its support for simple smart contracts,” says Guillaume Marchand. “However, since we aim to scale up to hundreds of thousands of users, and each user needs a Stellar ID for their digital wallet on our platform, we also needed a very scalable way to manage user credentials that would also be highly secure.”
Stellar authenticates users via public-key cryptography, so Irene Energy’s platform must be able to look up users’ private keys whenever they submit a transaction. At the same time, it needs to ensure that no one—not even its own employees or the customers themselves—can intercept or read the private keys before, during, or after the transaction.
“It’s relatively easy to encrypt data when it’s at rest, and even when it’s in transit,” says Julien Brodier, CTO of Talium. “The problem we had to solve was how to protect it during the runtime of the transaction itself, when the private key is stored in memory. At that moment, there’s a risk that someone who has root access to the server could read the decrypted key.”
The traditional approach to solving this type of problem is to invest in specialist hardware with built-in hardware encryption—but these servers are expensive, and Irene Energy knew that its clients would not be able to afford the investment. The company needed a cloud platform that could offer the same level of protection, without the up-front cost.
The team found a solution in the IBM Cloud. Unlike many cloud architectures, IBM Cloud bare metal servers are able to utilize an Intel technology called Software Guard Extensions (SGX). SGX enables the creation of an encrypted “enclave” within the server’s memory, which allows applications to process data without other users of the system being able to read it.
“Without SGX, our platform wouldn’t have been viable,” says Guillaume Marchand. “SGX gives us access to runtime memory encryption technology on affordable IBM Cloud servers instead of expensive custom hardware.”
However, building applications that can take advantage of SGX is complex and time-consuming. To get its platform to market quickly, Irene Energy’s developers needed to find a shortcut.
“That’s when we heard about IBM Cloud Data Shield,” explains Julien Brodier. “It’s such an exciting proposition for us. It abstracts away the complexity of building SGX-enabled apps and lets us focus on building features that add business value, instead of worrying about low-level implementation details.”
IBM Cloud Data Shield is a solution co-developed by IBM and Fortanix. It enables Irene Energy to containerize its applications and run them on SGX-enabled bare metal worker nodes within IBM Cloud Kubernetes Service. Instead of requiring companies to design their applications specifically for SGX, Cloud Data Shield automatically converts the code to be compatible with the SGX features.
Cloud Data Shield also provides a catalog of pre-optimized components that developers can easily plug into their applications. For example, Irene Energy was able to integrate its application with an nginx web server and a MariaDB database from the catalog within just a few hours.
“Cloud Data Shield has probably accelerated the development of our platform by six months,” says Guillaume Marchand. “We can get to market much sooner because we don’t have to build SGX-compatible components from scratch.”
The fact that Cloud Data Shield is built on top of IBM Cloud Kubernetes Service is also an advantage. As Irene Energy scales the platform up to support hundreds of thousands of users, Kubernetes will automatically handle orchestration and cluster management to scale seamlessly and make efficient use of the available bare metal worker nodes.
Finally, the IBM Cloud solutions provide an open architecture that enables Irene Energy to take advantage of a multi-cloud deployment strategy. As a result, data can flow securely and reliably between the different microservices that make up the application, regardless of which underlying platform they are running on.
Frictionless energy transactions
Irene Energy has already signed up a number of clients who are eagerly awaiting the launch of the platform, and is currently running pilot projects to explore different use cases in Tanzania and France.
“Once the energy industry sees the opportunities that our platform opens up, we’re anticipating huge demand,” says Guillaume Marchand. “Every time a large electricity company decides to work with us, we will need to create new Stellar IDs for each of their customers. That could mean adding hundreds of thousands or even millions of new wallets almost overnight. Only IBM Cloud gives us that scalability.”
For the company’s clients, the benefits could be significant. The billing and energy trading systems on which traditional utilities rely typically cost hundreds of thousands of dollars to implement; but with Irene Energy’s platform, there are no up-front costs. As a result, it’s possible for smaller companies—or even individuals—to become active participants in energy markets.
“Empowering consumers to band together and form their own energy collectives could not only solve the electricity access problem in Africa, it could transform the way we think about energy in Europe too,” says Guillaume Marchand. “If prosumers can easily re-sell the electricity they produce to their neighbors, we can create a much more efficient decentralized grid, as well as increasing the incentive to use electric vehicles and install solar panels in the home.
“Of all the blockchain projects that Talium has engaged in, Irene Energy has perhaps the greatest potential to transform lives around the world,” concludes François de Chezelles, CEO of Talium. “From a technical perspective, the use of IBM Cloud Data Shield for secure authentication of a Stellar network is highly innovative, and we’re looking forward to applying the same technique with other blockchains too.”
About Irene Energy
Irene Energy offers a next-generation back-office for the energy industry, with an open platform that makes it easy for producers, suppliers, consumers and exchanges to transact without financial or contractual friction. Its support for micropayments and real-time settlement is helping to solve some of the most challenging problems in the sector, and could help make electricity more affordable and accessible for millions of people in the developing world.
Take the next step
To learn more about IBM Cloud solutions, please contact your IBM representative or IBM Business Partner, or visit ibm.com/cloud
Fortanix provides the Runtime Encryption technology that powers IBM Cloud Data Shield. Runtime Encryption is a new technology which uses Intel SGX to secure the data in use by an application. This technology allows data to be encrypted when in use, and uses remote attestation to establish the integrity of the application. To learn more about how Fortanix and IBM are working together to build seamless, zero-trust cloud security solutions for complex distributed applications, visit fortanix.com
Talium is a specialist in digital transformation projects for enterprises of all sizes. Since 2015, the company has been developing its competence in blockchain technologies, and is now recognized for its unique experience and expertise in architecting, developing and delivering some of the most advanced blockchain projects in France. For more information, visit talium.fr