Power Ledger’s Disruptive Decentralized Energy Market
Finally, a DApp that will truly make the world a better place.
For those who haven’t heard, Power Ledger is decentralized energy-sharing. Energy producers (such as solar-panel owners) can sell extra electricity to their neighbors and community in coordination with the power grid. Power Ledger, Australia’s first ICO, creates a real electricity marketplace, significantly reduces the kW price, facilitates cost-effective access to green energy, as well as shrinks the overall carbon footprint. Let’s explore the main reasons why Power Ledger’s unique use cases and market disruption make it a billion dollar company:
Power Ledger Solves a Real-World Problem
Tired of those expensive electric bills? Me too!
Today, the energy market is as centralized as it gets. ConEdison-type monopolies decide where and when to build power capacity, how to bridge the distance between generators and loads, and most importantly, they determine the price and product of electricity.
Australia has some of the highest power prices in the world, reaching 26 cents per kW/h (The U.S. average is 12, still high) due to the rising cost of natural gas. Additionally, the region has the ideal environmental conditions for solar panels, primarily lots of sun. It is no surprise then that Elon Musk tests many of his prototypes, including the famed Tesla solar roof, in Australia. Nature and market needs make Australia and southeast Asia primary candidates for an energy revolution. This is what makes Power Ledger’s strategic positioning there important. The market is ready: 20% of Australian rooftops now carry solar panels.
Today, 3 different members of the energy sector need improvements:
Energy Consumers need access to cheaper and greener power. In most parts of the world, you must purchase your power from one source which is rarely renewable energy. Otherwise, you can install your own renewable energy source and pay off the expenses over time.
Energy Producers need a more profitable way to sell their excess power. Currently, any extra electricity that an energy producer must be sold to the only customer, the stingy energy providers, at their price free of competition.
Energy Providers need a long term plan for adding value to their electric grids while meeting the coming trends of renewable energy, their prices and externalities.
This is all slowly being solved by Power Ledger. Co-Founder Jemma Green claims that so far, implementations of their Peer-to-Peer network have saved energy consumers $900 on their yearly electric bill and earned solar panel owners double the savings they normally get from their solar plan.
“Many energy experts are convinced that blockchain technology has the potential to touch off a fundamental transformation of modern energy grids.” — MIT Tech Review
The Token Economics Make Sense
The Power Ledger Platform is a trustless and transparent energy trading platform built to support Citizen Utilities. These are participants who generate, consume, and transact electricity energy applications. There are two tokens that run this platform: Sparkz and the Power Ledger Token (POWR).
Sparkz is a frictionless trading token that is used to buy and sell the kW/h of electricity smoothly. It is created for a specific deal, pegged to the local currency upon creation, and destroyed upon redemption for fiat or POWR. POWR is the ERC-20 utility token purchased and licensed by energy producers to fuel the Power Ledger Ecosystem, running smart contracts that broker trades, distribute power, create Sparkz, and more. Sparkz are currently purchased and redeemed using fiat currencies with individual trading platforms hosting closed-loop exchanges for energy and Sparkz.
This token is seeing serious traffic, reaching 9th place in total transactions among all ERC-20 tokens (Ethereum) for the last 90 days (despite being active for only 40).
Basic Platform Applications
Power Ledger has multiple applications that promote energy exchange through several methods:
P2P Trading — This class of Platform Application gives retailers the ability to empower consumers (or in an unregulated environment, the consumers themselves) to simply trade electricity with one another and receive payment in real-time from an automated and trustless reconciliation and settlement system. You can select a clean energy source, trade with neighbors, receive more money for excess power, and see trades on the blockchain.
Microgrid/Embedded Network Operator/Strata — This platform enables electricity metering, big data acquisition, rapid micro-transactions, and grid management at an unprecedented granular scale.
Wholesale Market Settlement — This facilitates rapid low-cost and transparent dispatch optimization and management, data aggregation, reconciliation, and settlement for wholesale energy marketplaces.
Autonomous Asset Management — Producers can trade renewable assets, which are also autonomous and manage their ownership separately. This creates (1) shared ownership of renewable energy assets and (2) trading renewable asset ownership. The AA is able to buy and sell its own electricity and distribute its income to assigned wallet addresses.
Distributed Market Management — This Platform Application provides optimized metering data, the collection of big data, right to access and dispatch of assets, rapid transaction settlement, network load balancing, frequency management, demand side response, and demand side and load management.
Electric Vehicles — The platform can be used for real time metering data (interfacing with the Open Charge Point Protocol (OCPP)), collection of data, user identification and rapid transaction settlement in shared electric vehicles.
Power Port — An application where virtual pipeline and roadside assistance type assets may be automated via the platform, such as EVs, and can provide a mobile storage discharge facility maintaining energy supplies to predominantly self-sufficient energy consumers.
Carbon Trading — This application offers smart contracts for carbon traders to assure digital transactions across organizations: credibility of asset using immutable distributed ledger technology; and transparency and auditability.
Additionally, Asset Germination Events can be created to crowdsale autonomous renewable energy assets (solar panels, batteries, windmills, etc.) and allocate energy, income, and ownership to everyone involved. This concept resembles other fundraising DApps, but has serious use cases. Renewable energy is unaffordable to most on their own, but now a community can invest in the infrastructure proportionally and benefit from it proportionally. For example, Power Ledger has developed P2P technology to efficiently power apartment buildings with shared solar panels. If several apartment owners want to move to renewable energy, they can split the costs of the solar panels, split the energy, and sell the electricity to other apartments in the building while splitting the profits, all proportionate to what was raised by who, all processed by the Platform Protocol.
This token model adds real value to the community’s ecosystem and produces a utility that centralization failed to efficiently provide. Decentralized Applications are great for micro-transactions, and Power Ledger makes this feasible in the energy industry for the first time.
The Energy Market is HUGE
Some quick facts:
- In 2016 alone, $718 billion was invested in the electricity sector worldwide, and investor-owned utilities in the US collectively generated $350 billion in revenue.
- According to the International Energy Agency, the world will need to invest $44 trillion in global energy supply and another $23 trillion in energy efficiency to meet current climate policy goals and forecasted growth in energy demand through 2040. 10% savings in energy investment would be worth $6.7 trillion by 2040.
- Renewable energy is the future, and its share in worldwide electricity consumption is growing from 13.2% in 2012 to 22% in 2013 and is expected to reach at least 26% increase in 2020.
- If Power Ledger can help the renewable energy market grow, it can become the economic layer that sits below all transactions of electricity between producers and consumers. Based on rough estimates, there currently exists a $60 billion addressable market for Power Ledger.
They are Partnered with Giants
BCPG Public Company (Thailand; 48B), a subsidiary of Bangchak Corporation, has entered into a partnership with Power Ledger to supply blockchain technology for peer-to-peer energy trading in Thailand. Bundit Sapianchai, BCPG’s president said that they will start their first peer-to- peer energy project next year. It will deploy renewable energy assets for commercial and residential units of Sansiri’s real estate development project in Bangkok. He estimates an investment of 30–40 million and expected to provide competitive price for electricity generated by these assets. “The price would be 10–15% cheaper than what [citizens] currently pay to the Metropolitan Electricity Authority,” said Bundit.
Mahindra (India; 400B) signed a deal to implement Power Ledger’s reconciliation and settlement of their Micro Grid system in developing parts of India. Atul Kunwar, President and CTO of Tech Mahindra said,
“Tech Mahindra’s belief in its internal start-up to bring digital disruptions to different industries is proved by the success of MaaS in the energy industry. This disruptive technology will provide a model for energy service provision for thousands of communities across India, and this will also benefit markets like the US, Canada and UK for modernisation of grid through microgrids. Many of our existing customers are looking forward to use the platform.”
The Australian Government awarded a grant for $8 million to build an energy economy in Fremantle on the Power Ledger platform. Power Ledger is Aussie’s first and largest ICO so far. The project will assess how cities can use blockchain technology and data analytics to integrate distributed energy and water systems. The federal funding comes as part of the government’s inaugural Smart Cities and Suburbs Program which aims to solve practical problems. The project will also be supported by the Australian Energy Market Operator (AEMO), Western Power, and the CRC for Low Carbon Living.
The trial will contain resilient, low-carbon and low-cost systems installed and connected using Power Ledger’s blockchain technology. Large solar photovoltaic (PV) plants, rooftop solar PV panels, precinct sized batteries, electric vehicle charge stations and precinct water treatment systems will all be tested and implemented. Australia hopes that this will demonstrate the interconnected infrastructure of future smart cities.
Origin Energy (Australia; 16B) is already running a three-month technical trial of energy exchanging on Power Ledger. Origin is Australia’s leading electricity and natural gas supplier, with 4.3 million customers in Australia.
Liechtenstein Institute for Strategic Development (LISD) signed with Power Ledger to bring peer-to-peer trading of renewable energy to Europe in 2019. The agreement sees Power Ledger support LISD in marketing, planning and developing the metering, market settlement and reconciliation components of microgrids while LISD promotes and develops sustainable microgrid developments and other trading uses based on renewable energy and storage systems in Europe. At the announcement of this agreement at the European Green Australia Summit (EUGAUS), Professor Peter Droege of LISD said:
“Having renewable generation owned by communities means the economic benefit of energy production stays in the community and presents a significant incentive for the installation of greater rates of distributed renewable energy resources,” (Professor Peter Droege of LISD)
Awards/Recognition:
- Western Australia’s ‘Highest Trending Company’ at the Techboard WA Awards
- Top 10 of the Extreme Tech Challenge (XTC) companies to appear at CES 2018
- Top three for the ‘Best Startup — Social Or Community Impact’ category At The 2017 Talent Unleashed Awards in the APAC region.
Final Thoughts
The moment I had heard about Power Ledger, I couldn’t contain my excitement. I have yet to hear of a more applicable and disruptive decentralized application on the market. I find their position in the market to be valued in the billions and am sure that their various partnerships will support this growth. While other companies struggle to provide real value through their tokens, POWR has a number of incredibly useful applications already being implemented. Power Ledger is not applying decentralization to existing markets, but rather utilizing blockchain technology as a catalyst for de-monopolizing the century-old electricity business in a way that traditional institutions never successfully accomplished. I can’t wait to see what will come of this great idea, incredible partnerships, and awesome team.
If you have any questions, feel free to reach me at nir@kabessa.com
Hold down the clap button if you liked the content! It helps me gain exposure .
Clap 50 times!
I love getting questions or suggestions, so comment away!
