In support of our mission to power the energy transition by programming renewable energy into everything, we made the early choice to work within the framework of current sustainability standards. Why? Because we know it is essential that the companies and individuals we support in their decarbonization journey can feel safe that their impact is both real and provable. After significant R&D, we found a way to make it easy and fast for any end user to access renewable energy markets and achieve renewable energy goals following leading standards and best practices.
This blog reveals insights about how the magic happens behind the curtains and of the tireless complex work we do with energy attribute certificate (EAC) registries and other partners to ultimately make renewable energy easy to buy for anyone anywhere in the world.
The emergence of web3 technology, designed and implemented properly, can help power new and commercial scale solutions to diverse problems. Briefly put, web3 technology offers an elegant fix to solve an all-too-common situation that creates avoidable costs and problems across industries and use cases: siloed, fragmented documentation in scenarios where multiple parties need to know the current state of a given product, transaction, or series of events. In other words, web3 technologies can help create a shared source of truth about the matter at hand.
However, the web3 industry has a public perception problem. In parallel to the growing use of web3 technologies by diverse industries, there is concern among regulators and the wider public about web3 technologies like blockchain. These concerns, while arguably inflated, are legitimate and top of mind for many people: web3 technologies are used to build “disruptive” solutions that too often can fail to generate value to users or, in select cases, introduce new problems.
In light of these challenges, there are two key principles that are imperative for any solution provider that leverages web3 technology
- The web3 solution must solve a real problem for real users
- The web3 solution must go above and beyond with promoting industry standards and best practices
These two principles are core to Zero Labs’ philosophy and technology tools. Let’s examine why and how:
1. Zero Labs solves a real problem for real users
First, we help companies of all types and sizes around the globe power their operations and value chains with clean energy in a seamless, integrated way. Our work helps scale global demand for clean energy and accelerate investments that decarbonize the electric grid, the largest source of global greenhouse gas emissions.
Clean energy markets are designed primarily to support large energy customers and are complex, opaque, and challenging for smaller energy customers to navigate. This has hindered market participation among small- and medium-sized enterprises (SMEs) and value chain partners — everything from upstream suppliers to downstream customers’ use of products and services — that want to achieve their clean energy goals and use their verified clean energy credentials as a market differentiator. In fact, the opportunity to power the electricity use associated with value chains with renewables is one of the top-identified needs for innovative solutions in the clean energy industry. In other words, imagine if every app or web-based service you used automatically procured clean energy on your behalf.
Zero Labs’ packaged web3 and web2 technology suite solves problems on both sides of clean energy transactions and unlocks new demand in these markets. Simply put, Zero Labs aggregates smaller customers’ electricity use into bulk clean energy order requests from suppliers, then uses web3 technologies to deliver auditable evidence to these end customers about their respective share of a given bulk order. As a result, customers and, where needed, additional stakeholders gain newfound access to observe and share the audit trail associated with their clean energy procurement. This audit trail offers bidirectional evidence between the initial bulk order to final delivery, meaning it is possible to follow the evidence trail in either direction from the bulk order to the final delivery and from the final delivery to the bulk order.
The result: since launching in February 2022, Zero Labs has empowered nearly two thousand energy customers to procure over 2.6 terawatt-hours (TWh) of clean energy from seven countries and send this powerful market signal for accelerating grid decarbonization.
“Zero Labs’ web3 technology solution is helping Filecoin miners around the world procure clean energy and prove it”
said Alan Ransil, PhD, Team Lead for Filecoin Green.
“Through our partnership with Zero Labs, we can demonstrate progress toward our emission reduction goals and do our part to help decarbonize electric grids.“
2. Zero Labs promotes clean energy industry standards and best practices
Second, Zero Labs synchronizes and integrates its clean energy procurement, verification, and delivery solution suite with existing renewable energy certificate (REC) registries. These national and regional registries are where clean energy facility owners register their devices and receive RECs equal to each MWh of carbon-free electricity they deliver to the electric grid each month. Registries track the issuance, ownership transfers, and cancellation (or retirement) of RECs to avoid the double issuance and double claiming of a given REC.
RECs play an essential role in clean energy markets because they serve as the globally standardized, transferable instruments that power energy customers’ clean energy procurement and ownership claims. These instruments enable energy customers to procure and claim ownership over the zero-carbon attributes of carbon-free electricity generation and reduce their market-based Scope 2 greenhouse gas emissions to zero for each MWh covered by an REC. The purchase of RECs — through contracts where RECs are either bundled or unbundled from a customer’s electricity purchase — provides additional revenue to clean energy project developers and owners/operators and accelerates investments in decarbonizing the grid.
Zero Labs’s technology tools use and promote global REC standards, which are more broadly known as energy attribute certificates (EACs), including North American renewable energy certificates (RECs), European guarantees of origin (GOs), and international renewable energy certificates (I-RECs in 55+ countries across Africa, Asia, and Latin America). RECs form the basis of the verified product and transparent audit trail that Zero Labs delivers to end customers. Here’s how: In any REC purchases on behalf of the final clean energy customer, Zero Labs includes a note in the respective REC registry’s system where the RECs are canceled about the specific blockchain network, smart contract, and REC batch. This information is then included in the attestation form that Zero Labs receives from the REC registry and tokenizes as a non-visual NFT (non-fungible token).
How the magic happens
deploying Zero Labs’s three technology tools to help energy customers procure renewables and promote best practices
Zero Labs’ technology services suite includes three main technology tools that together enable companies to procure clean energy and claim ownership to substantiate and communicate progress toward their goals:
1 - A digitization protocol
that enables fractionalization of bulk REC orders through the creation of digital REC proof on a public blockchain (like the Energy Web Chain and Ethereum, among others) representing each energy customer’s proportional ownership of the bulk REC order, where blockchain reference-related information is included both in the REC cancellation information in the relevant REC registry and resulting attestation form to begin the audit trail for each of these non-visual NFTs;
2 - An easy-to-use automated programming interface (API)
to make it easy for any app developer in the world to streamline procurement of tokenized RECs for business operations and deliver these tokenized RECs to customers through their online dashboards or platforms;
3 - Human-readable proofs of clean energy procurement
and associated decarbonization visualized through publicly accessible user interfaces and “REC proofs” explorer that enhance the understanding and communication of the complete clean energy procurement audit trail
A Real World Example
Let’s take a deep dive into the end-to-end process using a recent real-world showcase to exemplify how Zero Labs’ technology tools interact with REC registries to deliver energy customers their proof of clean energy procurement.
As part of our Blocks.garden initiative launched in Q4 2022, which enables dispersed individuals and organizations to help power the Ethereum blockchain with renewables and verify their support, we bought 528 U.S. RECs from a wind facility in Nebraska. Because Zero Labs works proactively with REC registries to address any emerging concerns and promote best practices, we then coordinated efforts with M-RETS — the REC registry that serves the U.S. Midwest, including Nebraska, and offers technology services for WREGIS, the registry that serves the U.S. West. This collaboration led to Zero Labs using new technical functionality that M-RETS developed to maintain system integrity around track REC issuance and ownership claims while also enabling digital platforms to innovate on top of M-RETS.
The result of this collaboration is a new process that Zero Labs uses to interact with M-RETS (and, with relevant adaptations, with other REC registries). The detailed end-to-end process is explained below to reflect how Zero Labs delivered the bulk order of 528 RECs to dispersed customers in this example
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>>> STEP BY STEP: how the 528 RECs are assigned to customers <<<
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1️⃣ We purchase RECs from a renewable energy generator, consultant,
or broker based on the aggregated demand from our customers.
2️⃣ The generator, consultant, or broker transfers the purchased RECs
into Zero Lab's Active Account in M-RETS. In the example, 528 U.S. Wind RECs
were transferred to our Active Account.
3️⃣ We reserve the purchased RECS by transferring them from our Active Account
to our Reserve Account. By moving these RECs into Zero Labs' Reserve Account,
they become locked within M-RETS and are exported from M-RETS into Zero Labs'
integrated solution to end customers.
4️⃣ During this transfer to the Reserve Account, we include a note
on the Reservation Statement that M-RETS generates
(akin to, yet different from, a Redemption or Cancellation Statement)
to provide the critical data that creates the bi-directional link
between the reserved RECs in M-RETS and the corresponding
on-chain digital REC reflecting the end customer's ownership claim.
For a transparent audit trail, we make the M-RETS reservation statement
publicly available on Filecoin, a a decentralized cloud storage network.
5️⃣ We mint the digital RECs on-chain that link directly to the larger
on-chain batch representing all RECs in one M-RETS reservation statement
to complete the digitization and fractionalization process.
This provides a complete and transparent audit trail by directly connecting
the digital RECs to the RECs that Zero Labs previously transferred
into its M-RETS Reserve Account. Each digital REC contains unique metadata
about the underlying clean energy purchase that corresponds
to the associated REC batch.
6️⃣ To assign and deliver the digital RECs to our end customers,
we distribute specific energy volumes (as granular as watt-hour level
thanks to fractionalization) and cancel these energy amounts on-chain
to disable any further transfer. In other words, the digital RECs
are non-transferable upon delivery to each end customer (also called
a beneficiary). This ensures that end customers can make credible claims
and reports about their clean energy procurement with a clear audit trail.
In this Blocks.garden showcase, we attributed 42.12 MWh to Filecoin Green
for one unique purchase based on their respective ownership of the bulk
order of 528 reserved RECs and contribution to decarbonizing the Ethereum
blockchain - illustrating the benefit of fractionalizing bulk purchases
for right-sized end customer delivery.
7️⃣ Zero Labs also delivers all necessary documentation associated
with the audit trail to the end customer, including an attestation
about the energy volume associated with the canceled NFTs, the M-RETS
Reservation Statement, and additional details about the tokenized RECs.
The Proof for Filecoin Green from the Blocks.garden showcase verifies
Filecoin Green's ownership claim of the 42.12 MWh of clean energy
from the bulk order.
This Blocks.garden transaction showcases on M-RETS how Zero Labs is solving real problems for real users and promotes global REC standards and practices.
“We are happy to see companies like Zero Labs deploy innovative solutions that use M-RETS in ways that promote the integrity of clean energy markets and tap into opportunities for market growth,”
said Ben Gerber, President and CEO of M-RETS.
“Zero Labs offers an example of blockchain-based solutions solving an actual problem for specific types of buyers and following industry standards.”
Zero Labs is excited to help more companies program renewable energy procurement into their operations and value chains.
👉 Please contact us if you want to learn more about how to power your company and value chain with renewables in line with industry standards and best practices.
