Wepower ICO overview
1. Road Map:
1.1.Challenge: limited and expensive capital for green energy project developers
The energy market today is dominated — 78,4%6 of the total energy supply -by dirty energy, despite the transition begun many years ago since theories regarding global climate change have appeared.This process has accelerated in the last decade with oil prices reaching record highs in 2008 and a push towards the search for alternatives.
Many developed countries with the support of government during the Kyoto protocol have established renewable energy sup-port programs with variable success to achieve protocol defined goals.
In recent years, countries around the world increasingly use renewable energy sources (RES) instead of traditional hydrocarbons. Sun and wind are environmentally sound and are not consumed during use. According to experts, in the next 20 years, renewables will be the fastest growing segment of world energy. Experts predict that by 2035 their share in world total electricity generation will increase significantly — by about half from 21% today.
Transforming an energy market in development for over 100 years to run on clean energy is a difficult task, requiring great amounts of capital. Investment thus far, have enabled a renewable energy level of 21.6%. Moving towards a decentralized future, this market must appeal to investors.. Most P2P energy platforms struggle to scale globally, since significant transaction volumes are first necessary to enable P2P energy trading.
Capital availability today is the most important issue for any project developer. On different lev-els, this is dominated by banks, funds, etc., where the goal is always to maximize their share of profits. These high profit percentage requirement slows developers by minimising their returns and their ability to reinvest income in new renewable projects. Debt providers (banks) are not usually open to projects without a substantial amount of equity capital already raised. Natu-rally, current investment consideration becomes a very difficult and lengthy process, requiring from 3 to 6 months to conclude an agreement. In addition is the time a developer spends locat-ing and researching investors.
With the increasing percentage required of initial capital for renewable energy development projects (highlighted in a recent BNEF8 article) renewable energy production capital availability becomes an even more important issue as banks increase the demand on higher initial capital/debt ratio from 20:80 to close to 50:50 for new developing projects. This makes equity a very expensive source of finance, due to limited availability and increased requirement of such. The financing in previous years was done through Project financing. Changing debt structure will have a significant impact on the available debt and thus total investment in the market.
The second problem linked to the changing financing structure of energy production at the market price is the participation of individuals in the market. For example, a number of peers participating in the energy market investments are negligible. High net worth individuals (HNWI) make up the majority of investors in infrastructure projects such as renewable energy production through Private Equity funds. The general public is faced with these barriers to enter the market and invest:
1. Minimum investment amount — at least 125,000 EUR
2. Long capital lock-up times — 10 years for a typical fund
3. Lack of knowledge of fund manager reputations and trust in their team
WePower’s first objective is to address this capital availability problem along with the current complexity of administrative issues. By reaching this goal, WePower will increase the renew-able energy production growth and the growth of green energy users. Such growth would allow WePower to move towards P2P energy trading and final consumer participation in the market, a necessity in coping with global warming.
1.2.Investment process simplified:
Each new project aims to begin as quickly as possible. However, this is not an easy task. Capital availability is the number one issue delaying most projects. A large part of this is administra-tive, negotiating the acceptable risks of a project, cost of risks and their coverage, lack of initialequity capital etc.
WePower provides a marketplace to sell green energy utilizing smart contracts for each token kWh to be delivered at a specific time. This simple model allows projects to raise capital faster with the obligation to deliver green energy at the prearranged price. Even the onboarding pro-cess is simple and standard.
WePower will also streamline administrative issues for both parties. We will ensure standardinvestment terms and ensure that risks for energy buyers are covered10. WePower will also save time and expenses for the producers looking to raise funds.
WePower has already created a functional, basic energy trading network, which connects ener-gy producers and buyers, market makers and/or investors. With our existing product, WePower helps renewable energy project developers attract capital in an efficient way, which in turn significantly increases the project’s return on equity (ROE) ratio. Simultaneously, the platform provides access for any individual to invest in the energy market, without going through a pain-ful administrative process, due diligence or high entry costs and barriers. Moreover, WePower cuts energy costs for consumers and generates stable, high and asset-backed returns.
1.3.Speed of investment:
With simple standardized terms of smart contracts running on the blockchain, without required trust in middlemen and with global access to investments, the WePower solution provides ev-eryone with a fast, secure and cheap access to a green energy future.
This realization has come with the growth of blockchain use. The disruption of financing has begun with further development of transaction scalability11. With clear and standardized rules,projects are able to begin in a matter of hours once showing their capacity to execute. The pro-cess will streamline further with the development of the necessary tools to make the process as smooth as possible. Reducing the time from consideration and negotiations to investment from 3 months on average (taking into account all negotiations with funds and banks when the project is ready for investment) to a few clicks after reviewing terms and understanding return via the discount on green energy provided by the project developer.
2.Wepower — the green energy?
In 2015, renewable energy has set a record for growth in generation, increasing it by 147 GW, almost half were obtained through the installation of wind turbines, according to the annual report of the international organization for the support of renewable energy REN21.
More than one third of investment in renewables, which are estimated at $329 billion invested in China, and thus developing countries first overtook developed in terms of funding in this sector. The number of people involved also increased and reached 8.1 million.
Approximately 18% of energy consumption worldwide is met from renewable energy sources, with 13% from traditional biomass, e.g. wood burning. Hydropower is the next largest source of renewable energy, which provides 3% of energy consumption worldwide and 15% of the world production of electric energy.
Getting green energy from wind power increases by about 30% per year worldwide with an installed capacity of 121000 MW and is used widely in USA and Europe.
The project Wepower aims to increase the number of green energy around the world through blockchain technology.
Green energy has many advantages:
- Inexhaustibility.
- Ecological safety.
- Free access to the source.
- High efficiency.
3.WPR token:
WPR token holders will have priority access to participate in auctions for purchasing tokenized energy once the renewable energy plant is connected to the platform. Energy allocation will depend on the number of WPR tokens held by the participant. Moreover, WPR token holders are rewarded by no less than 0.9% of tokenized energy donated directly by the renewable energy providers. WPR token holders may use or sell this energy.
Their team is led by energy experts Nick Martyniuk, Kaspar Kaarlep and Heikki Kolk, who lead a group of 12 highly experienced energy engineers and former-skype programmers.
