How WePower’s blockchain-based energy financing will revolutionize traditional financing for renewable energy systems
Mobilizing finance for investment and innovation in low-carbon renewable power systems is a key driver for climate change mitigation.
There are currently many ways to finance renewable power systems including traditional private equity financing, tax equity, renewable energy bonds, leases, power purchase agreements and more recently crowdsourcing, property assessed clean energy, virtual net metering and other creative methods for financing renewable energy projects.
Traditional project finance is subject to geographic, government, and regulatory uncertainty based on different rules and regulations depending on where renewable energy systems are being developed. As well, a major bottleneck limitation with traditional renewable energy financing is that most projects require power offtake agreements such as Power Purchase Agreements (PPAs) to be in place before financing is approved creating many risks for developers. This creates a situation where many projects are not approved due to the financing methodologies requiring that the entire projects output be accounted for over the life of the project typically 15 to 20 years. What this typically means is that the entire energy output of the renewable power system must be bought with a guarantee for the life of the project limiting projects to those who can commit to 15- 20 years of green energy purchases.
WePower is a blockchain-based green energy trading platform. WePower enables renewable energy producers to raise capital by issuing their own energy tokens. These tokens represent energy they commit to produce and deliver. Energy tokenization standardizes, simplifies and opens up a globally energy investment ecosystem. As a result, energy producers can trade directly with the green energy buyers (consumers and investors) and raise capital by selling energy upfront, at below market rates. Energy tokenization ensures liquidity and extends much needed access to capital.
Energy tokenization ensures liquidity and extends much needed access to capital.
WePower’s energy tokenization platform will open up the green energy markets globally to a broader pool of investors over time. In an open platform that is not controlled by any one centralized entity, new energy projects do not depend on only local investors but to anyone who wants to trade green power.
Asset liquidity allows more favorable capital-to-debt ratios without using Government subsidies. By effectively reducing the soft costs for renewable energy systems, this can reduce the overall financing process as well as reduce risk to green power system developers. Here the risk is shared between the renewable energy producers and consumers/investors. As well, the WePower platform can be used to finance a more distributed energy system over time by supporting advanced localized power systems such as nanogrids, microgrids, and peer-to-peer energy trading schemes over the medium term. As well, the WePower platform can be used to support advanced new structures that are emerging in places like California like Virtual Net Metering (VNM), Community Solar developments, as well as Community Choice Aggregation (CCAs) enabling entire communities to invest in localized power systems.
WePower’s energy tokenization platform will open up the green energy markets globally to a broader pool of investors over time.
Over time as WePower builds out its blockchain-based green energy trading platform and specifically creates a larger capacity network, many new players will be able to participate in financing projects. Over the longer term, this same platform will be able to enhance the process of tokenizing Peer-to-Peer energy trading systems as well as provide value to emerging Distributed Energy Resource (DER) aggregators and systems operators.
With WePower, we truly have all the characteristics of a winning technology that can close the gap between traditional financing methods and next-generation, blockchain-based finance and operating systems for energy trading as well as future microgrid-based energy system operations.