Will you become more powerful than your energy company?
More power and smaller bills for energy consumers Blokchain based solutions disrupts the energy industry Trials are underway already
The rise of distributed clean energy supplies like solar photovoltaic (PV) systems and batteries is changing the energy power balance between consumers and centralised power authorities.
More citizens are seeking to move away from the grid to control the cost of their power bills and be more socially-responsible and sustainable in their energy consumption, reducing the need for central energy providers.
In Australia alone, as of 30 September 2017, there were over 1.746 million PV installations, covering 21% of suitable rooftops, which is the highest penetration of rooftop solar in the world. As Australia’s total solar power capacity has reached 6.5 GW, the Australian Photovoltaic Institute expects that figure to double by 2020.
In another case, 2017 Mckinsey study of sunny Arizona residential energy consumers found that by 2020 it would make more economic sense for homeowners to generate and store 80% to 90% of their electricity, via solar and battery storage, and use the grid only as a backup. By 2028, a full grid defection would make more economic sense.
Peer-to-peer energy trading will break up the traditional energy market and if the incumbent players do not realise this disruption is inevitable then someone else will do it, warned Dr Jemma Green, Chair and Co-Founder of the Perth-based blockchain company Power Ledger, which POWR token almost tripled in price in the last two months.
The energy trading startup is not the only one trying to disrupt the market with a help of blockchain. UK-based Electron, and Gibraltar registered WePower are among participants in this energy trading on the blockchain race.
Meanwhile, Power Ledger claims it helps traditional energy providers stay relevant by empowering them to co-create a better energy future with their customers via a blockchain energy trading platform.
“Network operators need to find a way to keep people from defecting from the grid and retailers need to find ways of connecting with their customers - so we’re helping them achieve that,” said Dr Green. The goal of Power Ledger is to disrupt the energy industry, not destroy its value, she added.
In order to facilitate longer lasting relationships between central energy providers and their customers the company already offers its peer-to-peer energy trading platform.
In December 2017, Power Ledger announced a deal with Thai energy company BCPG to develop a Bangkok based microgrid which will see between 6 to 10 multi-storey apartment buildings trading between 1–2MW of embedded solar generation.
Power Ledger’s platform will enable building managers to trade renewable energy from solar panels installed on each building with an autonomous financial settlement enabled via the use of a banking interface.
The startup has begun partnering with energy retailers in Australia and India to test its peer-to-peer energy trading platform.
In September 2017, Power Ledger partnered with Australia’s leading energy retailer, Origin Energy to carry out a trial that involved using anonymised historical customer data to explore the benefits and challenges of peer-to-peer energy trading across a regulated network.
While the digital trial is due to wrap up soon, the team have hopes that this would demonstrate the use of blockchain to unlock the value of consumer-owned distributed energy resources.
The startup is also collaborating with Tech Mahindra a digital transformation, consulting and business re-engineering services firm based in India, on a village-to-village energy trading trial.
The trial is aimed at bringing the benefits of energy microgrid developments to India’s booming urban population.
“[The trial] will see Microgrids-as-a-Service (MaaS) enable building owners, campuses, smart cities and communities to produce and manage their own electricity affordably and trade in cases of excess generation,” said Dr Green.
Power Ledger performed the live demo of the platform at Tech Mahindra’s Mission Innovation 2018 conference in Hyderabad in December 2017.
The company will also be participating in an Australian government funded AUD 8m blockchain trial which will test how cities can use blockchain technology and data analytics to integrate distributed energy and water systems.
The trial is set to take place in Freemantle, Perth and will involve the orchestration of solar power panels, batteries, an electric vehicle charge station and a water treatment capture system to demonstrate the interconnected infrastructure of future smart cities.
As blockchain capabilities are evolving and Bitcoin and blockchain are becoming more mainstream, Dr Green said that there is a lot of room for growth when it comes to practical real world applications of Blockchain.
“Democratising power is just the one we decided to focus on” she said.
Education as first step
As many other startups in the blockchain world, Power Ledger also faces common challenges in educating their partners and users on their platform.
Dr Green said the technology can still be complex for the average person to comprehend.
“I was at an event recently and someone flatout said ‘blockchain is a fad and your project isn’t sustainable’’, she recalls.
In these situations, Dr Green said she often takes the time to hear people’s concerns and educate them on how the Power Ledger platform is going to work.
“I think it’s important in these situations to hear the person out - they’re more likely to come around if you listen and answer their questions in a measured way rather than getting defensive straight off the bat,” she said.
In order to efficiently trade energy on the Power Ledger ecosystem the company has created its own cryptocurrency - POWR tokens.
“POWR tokens were designed to create a platform of interoperable applications rather than one business model, targeting one market,” it states on their Medium blog post.
To distribute POWR tokens to users, Power Ledger launched a token generation sale in October 2017 and raised USD 27m, making it the first Australian startup to raise money through an Initial Coin Offering (ICO) in the country.
The PowerLedger platform also requires the use of Sparkz, a token pegged to the lowest denomination of the local currency. It acts as an efficient model for ensuring the volatile nature of cryptocurrencies does not affect the price of the energy that is being exchanged.
Following the PowerLedger token generation sale, the third largest US digital currency exchange Bittrex, began listing the POWR token.
As of 16th of January, the market capitalization of the token was more than USD 400, after the price of POWR increased more than fourfold in the last two months, according to the coinmarketcap.com data.