How is Enosi different from generation project financing platforms like WePower?
At last count there were more than 120 ‘blockchain for energy’ projects announced around the world. This includes including a number focused on the idea of tokenising energy in order to fractionalise the output of a generation plant. Probably the highest profile of these projects is that of Lithuania-based WePower.
For blockchain project investors who are not experts in the complex electricity supply industry, the distinction between projects is not always obvious, but to distinguish Enosi from generation tokenisation projects should be straightforward. At the simplest level, energy blockchain projects seek to support or maybe disrupt one of the three key sectors of the electricity supply industry — Generation, Transmission & Distribution, or Retail Supply.
https://reneweconomy.com.au/understanding-energy-blockchain-network-market-26986/
1. Targeting Different Sectors
WePower is a prime example of a disruptor in the Generation sector, while Enosi is a Retail Supply disruption play.
The WePower platform is an innovative idea will enable the developers of medium and larger scale renewable generation sites to attract financing by tokenising and pre-selling the output of the proposed wind or solar farm. In this way they seek to broaden the base of investors in the new generation and speed the process of raising the required capital. At Enosi we think this is a terrific idea and we wish the WePower team nothing but success in this endeavour.
In stark contrast the Enosi platform is aimed squarely at the Retail Supply sector. Our platform will be employed by companies selling retail energy services. These companies will establish community energy programs where residential and commercial consumers buy and sell energy to each other, while the platform also enables access to the wholesale market so that the energy needs of the community are always met.
2. Enosi does not tokenise electricity because it’s not necessary
As the Enosi team were designing our platform and business model, we naturally reviewed the approaches taken by others, and we considered the idea of using a token to represent electricity — specifically kWh. However the concept threw up several challenges to long term viability, and ultimately we could not find a single good reason why the electricity itself should be tokenised.
We understand the difficulty of using tradeable crypto tokens to represent or pay for kWh because the high volatility would make for extremely complex settlement processes. Therefore other projects, including WePower and Power Ledger, decided to create special purpose tokens on their platforms (Energy kWh tokens in the WePower case, and Sparkz settlement tokens for Power Ledger). People transacting on the WePower platform are required to buy and sell these tokens to represent each kWh traded. On the Power Ledger platform, Sparkz are used to pay for energy priced in fiat.
Our view is that electricity is already digitised, in particular with smart metering, by the very process of measuring it in kWh and timestamping. Thus, a digital representation of a kWh can readily exist on a distributed ledger without a specific token. Why buy or sell a token when one can more easily just buy or sell a kWh? The purported reason on the WePower platform is so that owners of the WPR access token can be rewarded in Energy tokens, but again we are unsure why this reward cannot simply be in kWh or indeed fiat.
Enosi does not tokenise electricity, or require users to transact or settle transactions in tokens. We originally designed in the JOUL token that may in future be purchased on behalf of users to allow them access to the system functions and to the network of other buyers and sellers in the community schemes. For now, this functionality is ‘turned-off’ as we grow our customer base using a regular Software-as-a-Service model. In this sense Enosi’s JOUL will be like the WPR token- a utility access token. However in the WePower case, holders of WPRs are given access to auctions of the (in our view unnecessary) Energy tokens issued by the developers of renewable generation projects.
3. Enosi does not rely on donations of electricity to reward investors
Theeconomics of the Enosi and WePower platforms are entirely different.
65% of WPR tokens were sold in the pre-sale and public ICO with the remainder becoming unlocked over a 4 year period. We understand that the future value of WPR tokens is based on the volume of electricity being forward-sold by generation project developers each year. It is proposed that 0.9% of the energy sold in advance should be donated to the WPR holders.
“Under the WePower platform’s terms & conditions, each renewable energy producer will be required to donate 0.9% of all tokenized energy directly to the WPR token holders. Each WPR token holder receives tokenized energy proportionally. However, WePower is not liable if renewable energy provider fails to implement its obligation to donate energy.” (WePower Whitepaper v0.8, page 13)
At Enosi we avoided this kind of token ‘reward’ because of the potential to be seen as form of security. In Enosi’s case we are raising capital using regular equity.
5. Enosi does not require its own retail or trading licence
We note from the WePower whitepaper that in order to access the local energy exchanges and required data, WePower will act as a licenced energy supplier itself. This is also a feature of a number of other energy blockchain projects such as Grid+ in Texas.
“Legally WePower acts as an independent energy supplier, allowing WePower platform to be connected to the energy grid and the local energy exchange market as well as energy end users” (WePower Whitepaper v0.8 Page 7)
While we understand the technical requirement, Enosi has chosen to not put itself in direct competition with other licenced energy suppliers, but rather develop a software platform for use by these other suppliers. In particular by enabling smaller retail suppliers access to the low cost platform, Enosi will empower a multitude of innovative retailers to disrupt the retail supply sector. This business-to-business expansion model also maximises our growth profile.
Enosi has been established with a mission of clean, affordable energy for all. Our approach, as discussed above and in our whitepaper, is to build a retail community energy trading platform and make it available to innovative organisations all over the planet at low SaaS cost. As the electricity industry continues to decentralise, a multitude of new concepts and business ideas will emerge to bundle and trade electricity with the products and services of the 21st century. Our intent is to lower the barriers to new offerings, enable, encourage and tap into the innovation of our industry partners. Our platform is available for innovators in multiple markets to use, adapt to their local market circumstances, and apply to the opportunities they see to produce compelling retail energy propositions.
Enosi will operate a global business bringing innovators and partners together to adapt the platform, and to encourage its maximal uptake across the world. Given the complementary nature of the WePower generation financing marketplace and our full stack retail platform, we might even hope that organisations such ours could meaningfully cooperate to bring cleaner energy to the world by integrating our blockchains across the energy supply chain.
If you are interested in partnerships or participating on our upcoming equity rounds please get in touch through enosi.io.
