Uber for electricity: 3 reasons why Australia’s Power Ledger could be an energy gamechanger

Marsupialman
Aug 28, 2017 · 6 min read

The crew over at Western Australia’s Power Ledger have launched their ICO presale and now is a great time to get in on a project very worthy of your support.

I won’t restate any of the arguments laid out in the project’s very accessible White Paper, but instead give a few of the reasons why I’m feeling really positive about what these guys are positioned to achieve:

1. Start with imagining Uber for electricity.

- Power Ledger establishes a platform for P2P electricity trading, bringing the so-called ‘share economy’ to the distributed energy revolution.

- Imagine consumers (‘prosumers’) being able to monetise excess solar capacity. Have a sunny house? Why not install a bit extra to export to others? They can share in clean, cheap electricity, even if they’re renters, apartment dwellers, or in living in the shade.

Every second ICO sells itself as ‘distributed x’ or ‘decentralised y’. But in a lot of cases, there isn’t actually a compelling reason for why these services should be distributed, unless you’re a 19 year old libertarian geek cultivating their new-found obsession with small government.

Distributed energy trading will be completely different. The distributed revolution is coming for energy sector, whatever happens with blockchain and crypto. But it can be rapidly accelerated by P2P enabling platforms, which could start tipping the (already favourable) economics of solar and storage into much more rapid adoption.

If you aren’t fully up to speed with what’s happening in energy and solar PV, take a look at this chart from Bloomberg New Energy Finance:

Yikes

Remember, that is real data plotted on a logarithmic scale. It’s showing you costs coming down by more than 99 per cent over a few decades, and costs coming down by more than a quarter, every time production halves. Most people haven’t really wrapped their heads around what these trends mean for utility disruption.

There’s also serious potential for monetising energy savings (‘demand response’). It’s not hard to imagine thousands of air conditioners (perhaps controlled by an Ethereum smart contract) programmed to switch off at times of peak demand, directing payments to consumers. Platforms which aggregate these individually small actions could probably match electricity supply and demand at a more competitive price than batteries (certainly better than building new gas peaking plants which only run for a few hours a year).

Once the platform is up, we can expect lots of innovative apps being developed by aggregators looking for cheaper ways of matching electricity demand with supply.

In Australia, where Power Ledger originates and which is in the grip of a highly public and very politicised energy crisis, there is growing interest both in distributed generation and distributed demand management (have a look at the report by Australia’s Chief Scientist Alan Finkel). P2P energy trading is probably an essential ingredient to making sure these systems work.

A lot of people (including Vitalik Buderin) have suggested that Ethereum blockchain might not have that many ‘killer apps’. I tend to agree — but P2P energy trading is already crying out for a blockchain solution. It will be one of the genuine killers.

2. Australia will be the cutting edge of the distributed energy revolution.

Australia’s not really known as a haven for tech startups. But for distributed energy, it is the place to invest.

Australia’s network is large and expensive. It’s dominated by aging, inflexible, polluting coal (dirty and inefficient). And, largely due to a government policy vacuum, now has some of the least affordable electricity in the developed world. In short, ripe for disruption.

It also has some of the best solar resources in the world, and consumers are desperate to take advantage of it. Australians are already the world’s most enthusiastic adopters of rooftop solar, and this is only going to accelerate in coming decades.

Take a look at this chart from Bloomberg New Energy Finance:

Australia is primed to be the incubator of distributed transformation

Keep in mind these are conservative forecasts. They take into account falling technology costs, but not changing government policy (say, more ambitious climate targets) and not technology black-swans (like an explosion in P2P electricity trading).

The devs say they are planning a global deployment but even so, they are based in Australia and are very well placed for it. As you can see, Australia will be the frontier for distributed electricity generation, so it will be THE proving ground for pioneering new technologies, approaches, and infrastructure.

The Australian market will be the leading prototype for distributed energy systems. Bloomberg knows it; Elon Musk does too.

The trifecta of dirty, unaffordable, unreliable electricity will see Australian consumers accelerate as the world’s most aggressive adopters of distributed energy. The enabling technologies (hello Powerledger) will be proven, market-ready ones primed for export to the other emerging markets in Brazil, India, and China.

There’s no better place in the world for the electricity’s Uber to get its running start.

3. They have a working product and an experienced team.

My judgement is this is a rapidly developing project in the right place at the right time. The product shows a lot of promise, and they look to have assembled plenty of relevant expertise.

They have a modest but steady stream of mainstream media stories on their peer-to-peer electricity trials, and I expect we’ll see a lot more once the dust from the crowd sale settles.

Finally, some thoughts on the ICO…

I can see the team copping a lot of criticism for the uncapped ICO model (‘greedy’ is the normal accusation). Some of the same people are also complaining that the fixed-price for the capped presale is too high. Well, you can’t have it both ways.

Personally I think the ICO design has blended capped and uncapped elements nicely to give a good balance between rewarding early investors and letting the team raise a serious war chest to drive deployment.

This kind of project is not like bootstrapping a mobile app. If it was, then I’d agree there was no need for them to uncap their sale. But if you’re planning on investments in real world assets (PV and batteries, for example), it helps a lot to have serious capital on your side. Ultimately what’s good for the project is good for investors — that is, as long as you’re interested in more than making a quick buck flipping shitcoins!

In sum:

The energy system of the future will be vastly more distributed. Such a system needs a platform to efficiently match supply and demand.

Distributed energy will be one of blockchain’s few real world killer apps. It should be part of anyone’s crypto portfolio. Power Ledger is the first mover, in the right place at the right time, with a real world product that’s actually working.

There are a lot of rockets taking off for the moon at the moment. Who knows what could happen but at least this one has some working thrusters!

POWR is a coin to buy and hold, or better yet, buy and buy. Its real world use case positions it well to ride through any eventual crypto-bubble bursting (once the fad of ‘distributed-this-decentralised-that’ calms down).

Link to Power Ledger websitepresale is happening now!

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Marsupialman

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Ecofuturist musings and other thoughts on nature, environment and economy

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