In the autumn of 2017 an interesting moment occurred.
The price of solar, wind and battery power fell below 15 cents per kwh.
Which meant for the first time it cost less than fossil fuels.
This moment in history went largely unnoticed by most people.
But for my fellow Power Ledger co-founders and me the significance was not lost.
Theoretically this was the beginning of a new era.
This should have been great news for electricity prices.
And for the billions of people living in electricity poverty.
Equally for the millions of businesses who depend on affordable electricity to be competitive.
And for the planet, too.
When renewables and storage become cheaper than coal, coal should become so yesterday.
But not so fast.
Revolutions don’t happen overnight.
And the reason for this lies in the details of the way electricity is produced and distributed.
We still need the grid to meet peak demand, when everyone wants electricity at the same time.
Energy companies can rightly say “you need us for the peak, so we’re going to charge you accordingly.”
Then there’s the transmission of electricity, which also adds cost.
Then there is what we call the utility death spiral.
As people leave the grid to pursue their home-grown electrical future, they make the grid more expensive for everyone left connected.
Put simply, the cost of electricity has many nooks and crannies that create market distortions.
These maintain the status quo. Which is high-cost, high-carbon electricity.
And in stormy Caribbean places, high vulnerability electricity.
Which all means the people that suffer most are the people who can least afford it.
We put our heads together and decided to develop a market-making technology that would help bridge the gaps in the system and make it more fluid and responsive.
So people and ultimately machines could manage the supply and grid in a more agile way.
Power Ledger’s mission is none other than the democratization of power.
So what does that mean?
We’ve developed an exchange where people can buy and sell their electricity.
We’ve created a cryptographic token and a cryptocurrency that enable this market, called Sparkz and POWR. Sparkz represent electricity transactions, and POWR is a license and a bond for utilities to offer peer-to-peer trading.
We see ourselves as providing a bridge from a centralized past to a distributed energy future.
And in the process ironing out many of the market imperfections mentioned earlier.
And one where the transmission lines that add so much cost, gradually get stripped out.
We didn’t create a new photovoltaic cell nor a new type of battery. That’s for others to do.
We’re not trying to change the laws of physics — but we are changing the laws of the market to make sure the economics point to renewables and value flows to consumers.
We use the blockchain to keep a tally of who is selling how much, to whom and when.
Our platform uses real-time data from existing smart meters to enable electricity trading between buyer and seller. This also means our tech is low cost to deploy.
The use of blockchain means that the market can be real-time, transparent, scalable and above all, frictionless — creating trust between all involved parties. The distributed nature means energy is local which has the benefit of saving money on transmission charges.
In the new, decentralized electricity system, things look like this.
A distributed system is also more resilient. When natural disasters strike, like hurricanes Irma and Maria, leaving thousands without electricity, a decentralized energy system is far more secure as it doesn’t have a single, vulnerable point of failure.
Where our technology is having the most traction is in developing economies. This is what we are doing in Thailand.
Our world-first project with Thai energy company BCPG and the government has created a peer-to-peer renewable energy trading market at the T77 precinct in Bangkok.
But in heavily regulated economies, we’re making progress too.
In California, our project with Silicon Valley Power incentivises electric vehicle owners to charge their cars from solar during the day, rather than at peak hours from fossil fuels. And in doing so, they receive carbon credits via the blockchain.
Japan’s largest privately-owned power utility, KEPCO will be using our platform to support a Virtual Power Plant in Osaka. In this model, self-executing smart contracts integrate with Internet of Things devices, creating an autonomous energy trading market.
At my home in Australia, we’re excited to kickstart a Smart Cities project with the Australian Government. Working with two universities and state-owned utilities, we’re bringing peer-to-peer trading across-the-grid for the first time in Australia.
Typically in the energy industry, the speed of organic growth is glacial but our planet doesn’t have time to wait for change.
According to the International Renewable Energy Agency, “renewables need to be scaled up six times faster for the world to meet the Paris Agreement goals.”
If we’re going to turbocharge this growth in renewables, we need investment, so we’ve pioneered a product to do this.
Asset Germination Events will use blockchain and crypto to provide new sources of capital for funding energy projects. We intend to enable everyday people to invest in and co-own energy assets.
This will be a world-first regulated crypto energy offering.
We intend to procure large-scale assets that will be fractionalized on the blockchain to allow for co-ownership.
Two years ago we just had a test case in Perth with three apartments. This year we’ve signed up projects in Thailand, Japan and the US. Clearly disruption and network growth is happening, but we’d like it to happen faster.
Like everyone else here, we want to take home the crown, and secure vital help, profile, and support. With this we think we could quadruple our rate of growth. With the XTC credentials, who knows, we could be a decisive factor in meeting the Paris Agreement goals.
Which takes us to our final thought. And it’s a big one.
Currencies that represent value in this market have the potential to disrupt the existing fossil-fuel based economic system. Our biggest ambition isn’t just to facilitate the revolution in distributed energy, it’s to have energy transacted in a fair, transparent and stable digital currency.
It would represent world v2.0 infrastructure.
We hope you agree. We think the democratization of power depends on it.