WePower’s position in the new energy landscape
By: Nikolaj Martyniuk
Tags: Blockchain, Green Energy, Energy

Very few things in our lives are as fundamental as electricity.

We use electricity to power devices that help us connect and communicate with each other, explore and learn about the world way beyond our physical locations, extend our days long beyond the sunset, store food, do research, diagnose illnesses and treat ourselves. Electricity is so engraved in our lives that we rarely think about how the whole energy system works to have this service readily available at all times.

Up until a few years ago energy sector has been relatively unaffected by the digital transformation. However, a number of recent developments in renewable energy production technology, its penetration, smart grids and decentralized data management has spurred a wide range new companies focused on creating a whole new set of tools and solutions that could help to run our electricity supply systems better.

Over the last few months we have been closely following and interacting with our rapidly growing and very active community. We have noticed that aside of the excitement that so many people across the globe have got about the changes in the energy sector, there is still quite a bit of confusion how the focus of startups in this sector contrast and compare to each other.

In this article we want to clarify some of the confusion by giving you a high level overview of the new energy companies that use blockchain to drive the change. Although this overview might be perceived biased (some of the companies are our competitors), we still believe it will serve as a useful resource for anybody who is interested in learning more about this sector.

Please note that the review was done using publicly available information in the press, company websites and technical documentation.

Blockchain innovators in energy sector

Suncontract

SunContract is a Slovenian company focused on building an energy-trading platform that utilizes blockchain technology to enable P2P buying and selling electricity between the households. The core focus on the company is the excess solar energy sales from prosumers to consumers.

Suncontract’s token is an access token. It provides access to the energy pools used for energy trading. We could not find any details on the token mechanics and integration with all ecosystem players (energy utilities, large energy producers) specified. Business case and growth projections were also missing.

The team is led by professionals with business development experience in energy sector. However, we could not find any indication of the energy system engineering expertise, relevant industry partnerships as well as technical implementation details were not specified on the site.

Suncontract has already finished the token sale and raised 2 million USD. Their white paper can be accessed here.

Grid+

Grid+ is a US-based team of blockchain professionals building a blockchain-based utility with particular focus on the state of Texas. The core value proposition of the Grid+ solution is the opportunity for the end-consumers to buy energy directly from the wholesalers and in this way cut their electricity bills. Grid+ uses an IOT device that analyses consumer electricity use patterns and makes predictions about their future energy consumption.

Grid+ is a working on a sophisticated AI-based system to automatically buy energy under extreme price parameter swings — unforeseen price change when client needs the energy. Company’s initial focus is on creating a new advanced energy retailer, which will deliver better markups from the wholesale energy trade. In the later stages, Grid+ aims shift their focus towards IOT device sales.

Company’s token model is structured around two tokens. BOLT token is a platform token that is used the end-consumer to purchase energy in a similar way as mobile minutes are purchased through prepaid mobile cards. Each of the BOLT tokens equates to 1USD. The other token is called GRID token and serves as a limited supply discount on consumers energy price (covers for the platform commission that would otherwise be charged). GRID token is tradable and was sold during the GRID+ token crowdsale.

Grid+ has already finished the token sale and raised 45 million USD. Their whitepaper can be accessed here.

Power Ledger

Power Ledger is an Australian company working on a blockchain-based energy trading platform, where prosumers (households with energy generation capacity) can sell their solar energy excess to energy consumers (P2P trading). Power Ledger has got a team of energy sector professionals and disclosed industry partnerships.

The company uses a dual token model. POWR token serves as an access token to the Power Ledger trading platform and the “Asset germination events”. SPARKZ token functions as a currency for trading energy on the platform. POWR token is a tradable token released to the circulation during company’s ICO. A large share of POWR tokens is kept to serve as a subsidy program to incentivize the so called Application Hosts (utilities, retailers, property managers). We could not find any specific details on how this incentive program will work.

Company’s white paper outlines company’s plans to offer additional functionalities outside the P2P energy trading. WePower’s offering is frequently compared with Power Ledger’s “Asset germination events”. Through this program, Power Ledger plans to supplement green energy financing by creating an equity-based co-investment opportunities into renewable energy projects. This financing approach is very different from WePower’s upfront energy sale-based financing and carries a higher risk of legal limitations covered by securities trading laws.

Power Ledger has already finished the token sale and raised 36 million USD. Their whitepaper can be accessed here.

Greeneum

Greeneum is an Israel-based company focused on emissions trading with the mixture of energy production in underdeveloped countries and sales of the energy certificates to the developed countries. These directions are regulated differently. Greenum aims at tackling both. Greeneum team has got energy experts only in advisory board. The same team is also working on Solar Change project.

Industry partnerships and testing plans are yet to be announced. Unfortunately, we could not infer a clearer marketing positioning from Greenums white paper and thus will update our review once more business and technical details are announced.

Greeneum is yet to complete their token sale. Link to Greeneum’s whitepaper can be accessed here.

The unique position of WePower

When we were conceptualizing WePower we were very much focused on finding a solution that could bridge digital technologies with the currently existing energy systems and in this way boost the green energy transition. Unlike many other energy projects we did not want to create siloed solutions that would be close to impossible to scale given the nature of our energy supply systems. Instead, we have built WePower around the few key aspects that could shift our current system into a digital green energy service powerhouse benefiting energy consumers, producers and grid services providers.

Here are the key aspects of our approach:

1. Financing through upfront energy sales — nearly all energy financing at the moment is either debt or equity-based. This means that new energy projects are funded by either borrowing money or giving up a stake in a project or company. This creates a very complex process, which suffer from intermediaries, liquidity issues and access limitations. WePower uniquely offers an opportunity for new green energy project to fundraise by selling their future energy production upfront in a form of energy tokens, which ensures investment liquidity and access to capital without geographical limitations. This is very different from the securities-based approach planned by Power Ledger.

2. Grid integrations — energy production and supply is very complex 24/7, 365 interconnected system that is managed by the national grid operators in every country around the world. Many current renewable energy projects focus try and take advantage of the current trend to use/integrate the P2P production and trade as well as introducing siloed solutions because grid integrations are complex and require a rare technical skillset to make them work effectively. This approach limits the real-world scalability that is needed to make them not only cost effective but a viable addition to the smart grid production mix. WePower is able to propose a blended approach because its CTO and co-founder Kaspar Kaarlep comes from the utility/smart grid sector. He has led one of the few successful country-wide smart grid development initiatives in Europe and has built a team uniquely positioned to complete large scale grid integrations with WePower platform. Energy is a commodity, which is why scale is extremely important to make drive a strong economically viable platform business in the energy sector.

3. Industry Partnerships — energy powers nearly everything that we do and thus it cannot be experimented on without a direct support from the energy utilities and governments. Many digital innovators position themselves as a replacement for the current energy service providers and suppliers, do not treat carefully the security aspects that any energy system must solve extremely well. At WePower we work very carefully on partnerships with governments and utilities to deploy the best system possible. Our partnership and testing plans with Elering, the national transmission systems operator of Estonia, is a perfect example on how startups can cooperate with the current industry players to drive innovation at a very meaningful scale.

4. Geography — digital technology in many cases holds very few geographical constraints. However, geography and country-level developments are very important to the energy sector. WePower is a European company, which provide us a unique opportunity to be part of the major energy digitization initiative that is happening across the European Union as a part of 2020 goals. Based on this directive every EU countries are obliged to implement nation-wide smart metering systems by 2020. This development will allow us to expand our service offering outside green energy financing very soon after the infrastructure developments are complete.

5. Blockchain application — due to the actual current state of low digital maturity in the energy sector, many blockchain use cases which have been proposed are way ahead of their time and require substantial investment in digitizing energy infrastructure before delivering the value proposed.This is why WePower utilizes blockchain where it actually makes sense and the benefits over existing centralized solutions are substantial, such as power purchase agreements and transparent energy production accounting. We believe that the companies that bring successful blockchain applications to the current realities of energy market will be the best positioned to add an additional level of advanced applications once the energy infrastructure is completely digitalised.

6. Token model — last but not least, we should not forget that one of the most powerful offerings of blockchain technology and tokenization is an opportunity to create new incentivized economies. Many new blockchain projects within energy industry and beyond use tokens to provide access to their ecosystems or distribute their profits to their contributors. At WePower we worked hard to develop a model that would tap directly into the energy ecosystem and provide right incentives to drive green energy adoption. WePower token economy really stands out as it serves both as a fundraising and energy investment instrument to the energy industry stakeholders as well as a priority pass to energy auctions, which will accumulate in value as the platform grows in size and profile of participants. Our token creates an opportunity for green energy as a whole to become as a valuable asset class.

Our whitepaper can be accessed here.

Why is this important?

For many years energy has been taken for granted but the recent changes in the state of digital technologies as well as their integration into the energy generation and supply system has sparked a new wave of innovation. The complex reality of the energy sector is not widely understood outside the industry professionals and as a results many fundamental principles are not taken into consideration or are misunderstood.

In this brief review we aimed at providing an overview of the companies driving the innovation with blockchain and tokenization as well as outlining the key factors that positions WePower in the landscape. We hope that this overview will spark a broader debate and discussion on what’s needed to drive the very important energy system transition. Energy transition is too important to be taken for granted.