How Impact PPA Is Going to Revolutionize Energy Using Blockchain

Feb 20, 2018 · 4 min read
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Renewable energy unquestionably must become a major part of our global infrastructure if we’re going to avoid the most dire climate change scenarios predicted. And the world has largely recognized the importance of green energy solutions, pushing to shift away from carbon-intensive, polluting energy sources such as coal while promoting the development of renewable sources such as wind and solar. Global coal usage dropped by a record amount in 2016. The European Union is shooting for 35% clean energy use by 2030. Renewable energy generation in the US is for the first time nearing the generation profile of nuclear power plants. In many ways, the world is on the right track.

But these important efforts are not enough on their own to give renewables the truly industry-dominant position they need if we’re going to prevent the sea level rise, catastrophic weather events, widespread species extinction, food supply chain interruption, and disease epidemics in store for the human biosphere during peak climate change. The U.S. Energy Information Administration estimated in 2015 that global renewable energy would increase by 2040, but not exceed coal, natural gas, or petroleum usage. What’s holding back renewable energy development?

Distribution Issues

Many carbon-intensive energy generation sources are traditionally centralized — a massive coal plant, for example, might receive fuel shipments from around the globe and distribute electricity along networks covering multiple states. Focus on massive, centralized energy structures has raised increasing concerns about grid vulnerabilities to cyber attacks and weather events. A 2003 blackout that affected over 50 million Americans and Canadians spread across the Northeast was caused by a single technical glitch in a power plant outside of Cleveland.

Perhaps even more pressingly, this model is difficult to implement in areas of the world that lack the electricity infrastructure. Construction of massive power grid structures requires investment in extremely expensive and inefficient equipment, which means many of the most rural locations on the globe aren’t included. Lack of access to reliable electricity has real impact on quality of life — electricity powers, for example, water pumps and purification, or lighting and equipment when children go to school, or medical devices in hospitals, or access to cell phones and other long distance communication tools. The number of people who stand to benefit from electricity access is huge — the International Energy Agency estimates that 1.2 billion people lack electricity, while many more experience only unreliable access.

This potential market is huge, but how can it be served using old distribution models? More and more industry experts see Distributed Energy Generation (DEG) solutions as the way forward instead. In this model, communities develop power sources and grids scaled and located in ways that are appropriate to them, rather than relying on far-flung distribution networks. This model also happens to be incredibly appropriate for renewable energy usage. While coal is generally extracted at a few major locations and then shipped elsewhere, renewable energy sources can be adjusted for use in plenty of different environments. Wind generation can take place in plenty of windy communities, for example, while solar generation only requires sunny days. In this model, a community can benefit from a small local renewable energy producer without having to invest in long-distance transmission.

Unfortunately, DEG solutions face significant financing hurdles. Small communities often lack the up-front capital to build small renewable projects, and finding outside funding is often a labyrinthine and lengthy process winding through national governments, NGOs, and other international financial power structures, taking control of the solution away from the community trying to make it happen in the first place.

Impact PPA

This financing issue is where Impact PPA steps in. This innovative company is using blockchain technology to create smart PPAs, or Purchase Power Agreements. Two different tokens based on the Ethereum platform are used to decentralize and democratize DEG funding. Users who are interested in financing a DEG project, such as a wind turbine or a solar farm, submit their project to the Impact PPA community. Holders of MPAQ tokens use dedicated cryptos to allocate funds to projects they find worthy.

When projects reach a critical mass of funding, the platform creates GEN Credits, separate tokens representing energy generated by the project. Users of energy from the project pay by buying GEN Credits and using them to pay-as-they-go for their energy needs. Profits are reinvested into the existing ecosystem and eventually into buying back MPAQ tokens, creating a self-sustaining financing cycle.

Blockchain makes this model possible. Each token’s dedicated ledger demonstrates how it being allocated and spent, eliminating the need for complex and error-ridden paper bureaucracies to track funds and circumventing traditional gatekeeping financiers such as big banks or NGOs. With blockchain technology, Impact PPA hopes to create an ecosystem that can continuously finance and launch DEG renewable projects, bringing our globe closer and closer to both democratic electricity access and a clean, renewable power grid.

How can blockchain be used to tackle other pressing energy issues?


The author has had a working or personal relationship with one or more companies mentioned in this article in the past. Access to mentioned company’s management and information was made through the author’s personal network. All information was vetted prior to posting.


This essay is not intended to be a source of investment, financial, technical, tax, or legal advice. All of this content is for informational purposes only.

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