Power Ledger (POWR) — Analysis of the token and business model

Published in

Trivial.co

11 min readNov 8, 2018

Power Ledger is a platform where businesses and consumers can trade energy peer-to-peer. The platform primarily caters to clean energy, such as wind and solar energy, that can be produced by individuals and businesses and then shared on an energy grid.

Blockchain technology is leveraged as a ledger and settlement mechanism for the energy trades, and thus is secure, transparent, and low-cost.

The three major products on the Power Ledger platform are xGrid, uGrid, and Power Port.

xGrid is the key feature of Power Ledger, where entities producing excess energy can sell it on to others to others.

uGrid is a tool for clients in a microgrid/embedded network to enable low cost electricity metering, big data acquisition, rapid micro-transactions, and micro grid management. Essentially, it is a tool for network environments such as apartment blocks, shopping centers, parks, etc. to manage and monitor their network’s energy flows and usage at a granular level.

Finally, Power Port is similar to uGrid but designed specifically for Electric Vehicle charging stations, allowing cheap and secure electricity metering, settlement, low-cost payment, user IDs, and integration with existing protocols such as Open Charge Point Protocol (OCPP).

Other products on the Power Ledger platform include C6/C6+, which is blockchain-driven reporting and recording of carbon credits and certificates, and Asset Germination Events (AGE) which empower communities to monetize co-owned energy assets such as solar panels, wind turbines, etc. Asset Germination allows individuals to co-invest into renewable energy assets and the blockchain ledger is expected to be a superior way of assessing ownership and revenue shares for these types of projects.

How it works

Power Ledger is a software-based transactive layer that communicates with an existing grid through smart meters and an intermediary acting as an Application Host. A smart meter is an electronic device that records consumption of electricity and communicates the data to the electricity supplier for functions such as monitoring and billing. The Application Host refers to the energy provider who controls the distribution infrastructure and power supply for the grid that the specific platform is operating on, for example a utility company. The Power Ledger platform is a layer that will be permitted through the Application Host to permeate a network, upon which everyone on the network can utilize the platform.

The design architecture from the white paper is shown below.

The RETAIL portion represents how the system would exist in a network operated by an Application Host, while P2P Direct shows the functionality where there is no central network. Most of the usage would come through Application Hosts.

As shown, onboarding into the system is initially through holding POWR tokens, from which the platform’s currency — Sparkz — are generated and distributed to be traded amongst the entities within the network.

The ecosystem exists on a set of layers stemming from the Ethereum blockchain.

Power Ledger Core is the base layer providing key implementations such as escrow services, POWR/Sparkz exchange, Asset Germination Events, and oracles to gather external information.

There is also the Consortium blockchain built on an in-house Proof of Stake blockchain known as EcoChain. The EcoChain layer functions include Sparkz token creation/management, fiat payment processing, smart meter data storage and verification, and more.

Finally, there is the applications layer called FuseBox. This layer is where front-end applications such as P2P energy exchange and Power Port exist. The platform also boasts State Channel functionality to strategically take certain transactions off-chain to maximize speed and efficiency.

POWR and Sparkz Tokens

The Power Ledger platform utilizes a dual token system. There is the publicly traded market token called POWR, and then an ecosystem token pegged to the user’s respective domestic currency called Sparkz.

Sparkz is generated from POWR tokens, and is solely utilized within the Power Ledger platform. Both buying and selling energy on the platform occurs using the Sparkz currency. Power Ledger was able to secure a banking on-ramp in 2017, enabling fiat conversion with Sparkz.

POWR tokens have other utilities aside from generating Sparkz. The POWR token facilitates access to the platform, provides loyalty rewards to participants, will contribute and connect with charities and organizations, and will provide priority access to Asset Germination Events.

Stats + Metrics*

*(as of 08 November 2018)

Marketcap — $62,762,000

Price Chart

Cost to join Vladimir Club (own 0.0001% of tokens): $6,275

Circulating Supply — 388,773,723

Total Supply—1,000,000,000

Unique Addresses holding tokens — 49,055

Top 20 Addresses hold 83% of the Circulating Supply.

*Defined as “***distinct senders that sent the tokens using ERC20 transfer() method***”. NOTE — it only includes onchain transactions.

Roadmap — Where are we?

Power Ledger was founded in May 2016. In August 2016, it trialed Australia’s first energy trading blockchain network, followed by another trial run in a network in New Zealand. A further trial at multi-tenanted properties occurred in Q2 2017, and the ICO soon followed in October 2017. In Q1 2018, the team released its product for Electric Vehicle energy management.

Power Ledger is currently involved with a number of collaborative energy projects utilizing its platform and services in Australia, America, Thailand, India and Japan.

VPP2.0 — Power Ledger is focusing on developing its VPP2.0 product. VPP stands for Virtual Power Plant and is an extension of the xGrid P2P product to connect distributed energy sources into a central control system to allow for mass aggregation, trading, and analysis of energy. The aggregation allows for a reliable and controllable power supply that can re-distribute energy more efficiently. Virtual power plants are becoming more common in the world; companies such as Embala Power Networks, Sunverge Energy Inc. are already active in this space, and the market is projected to reach $5.5 billion value by 2023 according to a P&S Market Research report.

Another key development is the work towards general release of Asset Germination Events. Originally slated for Q3 2018, the team has since extended the timeline stating the need to fine-tune the legal and regulatory issues involved with the program, with release slated for 2019.

Another interesting event to note is that the Power Ledger team were the winners of Richard Branson’s Extreme Tech Challenge 2018 .

Team

Dr. Jemma Green — Co Founder and Chair — works in the fields of blockchain, artificial intelligence, and energy. In addition to Power Ledger, she operates on the board of Water Corporation in Perth, Australia, and serves as Chairman of Climate-KIC Australia, a group working on innovating climate change solutions. She holds a Masters in Sustainability Leadership at the University of Cambridge, and a Doctor of Philosophy (PhD) with the Sustainability Policy Institute at Curtin University.

John Bulich — Co Founder and Technical Director — also a Director at Ledger Assets, a company developing blockchain applications for photo verification, medical uses, power, and asset sharing. He was a Director at WA Property Investments for 22 years, working on property development, securities trading, and portfolio management.

David Martin — Co Founder and Managing Director —worked as Director at Future Effect, an Australian energy company. He was a senior executive at Horizon Power as General Manager.

Dr. Bill Tai — Global Ambassador and Advisor — a venture capitalist known for being co-creator of the Blockchain Summit and board member of BitFury Group. He has been Chairman of the Board for Treasure Data, a data pipeline and repository under Softbank’s ARM corporation, and Hut8 Mining Corp, the largest publicly listed crypto mining operation in North America.

Marc van Hoof — Chief Operating Officer — an investor who is currently involved in organizations which include Revl, Inc. and Breathometer. He is also a Board Advisor with Law Advisor, which is a web service for people looking for legal advice or a lawyer. He worked for Cisco as a Product Manager in 2005.

The total team is comprised of around 30 members.

Notable Partnerships

Power Ledger has been working hard to form various commercial partnerships with entities outside of the blockchain industry.

Clean Energy Blockchain Network — an off-shoot of Power Ledger focused on the platform’s adoption in North America. The group maintains their own team and advisors independent from Power Ledger, and its affiliations include IBM Blockchain and Microsoft Azure. The group spearheaded Power Ledger’s first North American deployment at Northwestern University.

Greenwood Solutions — provides energy solutions to commercial, residential, and industrial clients. The company partnered with Power Ledger to deploy the Power Ledger P2P energy trading platform in Burwood, a suburb of Melbourne, Australia. Through the deployment of solar panels, the partnership hopes to provide residents monetization of their excess energy.

KEPCO — Kansai Electric Power Company, is the second largest electricity utility company in Japan. The partnership intends to trial P2P energy trading in Japan from 10 initial homes in Osaka, giving Power Ledger an opportunity to show why its platform is more flexible and robust than existing standards.

Other notable partnerships include a 3-month trial conducted with Origin, a large Australian energy company, and a 12 months trial with Tech Mahindra, an India-based company exploring Microgrid-as-a-Service platforms. The team is also working with Silicon Valley Power, a municipal utility company operated by the City of Santa Clara, CA, to trial the Power Ledger platform for recording carbon credit transactions and track/manage energy utilized in an EV charging facility.

Competitors

Restart Energy Democracy (MWAT) — is an established European producer of solar cells, who have launched a blockchain platform in order to operate as an energy franchise sales company. They aim to onboard energy producers who then sell directly to consumers through the platform.

SunContract (SNC) — an energy-trading platform for buying and selling electricity, similar to Power Ledger. SunContract is currently focused on the Slovenian market through the SONCE group, a major Slovenian energy company.

Electrify.Asia (ELEC) — is the first retail electricity marketplace in Southeast-Asia addressing the need for transparency and security in the consumption of energy. They are developing a platform to allow anyone to source energy (renewable and non-renewable) from commercial energy suppliers or to buy directly from a private producer.

GRID+ (GRID) — a Consensys-affiliated project leveraging the Ethereum network to find wholesale electricity prices and offering energy to consumers. One GRID token is pegged to 500 kWh of electricity, and GRID+ takes a small premium on top of the wholesale prices for revenue. It offers asset trading beyond just electricity through the Lattice1 wallet. While Power Ledger works to incorporate its platform into existing utility networks, GRID appears to be focused on disrupting the utilities market, buying energy themselves and selling it at a better price than commercial rates.

WePower (WPR) — is a crowdfunding/financing platform for renewable energy projects, which gives participants the opportunity to raise capital by selling future energy production.

Concerns

Energy is a very oligopolistic industry, typically dominated by a few local corporations that work closely with government. It is a very difficult industry to break into, let alone disrupt. This is why it is important that Power Ledger specifically targets green energy trading, because green energy is a growing industry that is not as oligopolistic, is closely linked to the academic community, and may offer additional incentives from both governments and private companies that traditional energy does not.

Power Ledger has already demonstrated interest and adoption in its solution, such as a deployment at Northwestern University as well as some deployments on the Western Power network of Australia. However, these deployments are very limited in scope. If/when Power Ledger aims to plug into the general electrical grids to allow widespread P2P trading, will the existing infrastructure entities allow them? How will government regulation come into play? It will be up to the Power Ledger team to negotiate these tricky contracts.

While Power Ledger is marketed as a P2P application, the truth is that it is difficult to create a pure P2P environment when it comes to energy. This means that for any community that wants to integrate the Power Ledger platform, it will need the agreement of the local utility company who own the local infrastructure. This requirement to negotiate with energy companies, and the fact that local energy companies differ across the world, makes it hard to adopt universally compared to a system where the users could just trade energy amongst themselves without relaying with a host. Even if one million users worldwide are eager to adopt the platform, if they are widely dispersed across various governments and utility providers, there is no way for them to interact based on the current model.

Summary

Power Ledger offers some interesting use-cases for blockchain, primarily with regard to energy trading and the Asset Germination Events. They have successfully implemented trial runs since inception in 2016, and the team continues to fine-tune existing products while working on new products as well.

On the other hand, there is a critical issue where the widespread adoption of the platform is largely dependent on the cooperation of Application Hosts, which will be local utility companies for most users. Rather than plugging into major electrical grids, the Power Ledger platform’s eventual use-case may be limited to smaller solar/wind farms and micro communities, as the legal and regulatory hurdles that need to be cleared for mainstream grid adoption is certainly significant.

Overall, the continued micro-implementations of Power Ledger will give a stronger understanding of the cost and security benefits of the blockchain, compared to a centralized entity for energy trading and management. Power Ledger is undoubtedly blazing a trail for blockchain-based energy, and is well positioned to continue leading the pack over the coming years.

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I’ll try to update this review periodically to keep it relevant, but please feel free to help me by notifying me of any updates to the project, or offering any corrections/suggestions to improve the analysis!