The spectacular rise, fall, and rise (and fall-fall-fall) of Bitcoin has provided the public with a big, fat window into the dirty little world of cryptocurrency mining. So, it’s not surprising that there is a lot of skepticism regarding the ability of cryptocurrency to play a supporting role in the low carbon economy of the future.
Well, that’s only one window. If the jury is still out on the relationship between clean tech and crypto, it won’t be for long.
Last summer CleanTechnica embarked on a project that underscores the potential for cryptocurrency to accelerate the clean energy revolution through enabling software, aka blockchain. The takeaway is that when it comes to decarbonization, not all cryptocurrency is created equal.
With that in mind let’s take another look at the company Power Ledger, one of the plethora of startups leveraging cryptocurrency and blockchain for clean energy projects.
Blockchain And Cryptocurrency
For those of you new to the topic, blockchain can be thought of as a type of accounting software. The difference is that in conventional accounting, buyers and sellers each keep their own set of books. With blockchain, they both have access to the same book.
Once you’ve established a common book between buyers and sellers, the idea of trading digital tokens — aka cryptocurrency — falls into place. Digital tokens let you skip seamlessly over the cumbersome process of conventional credit transactions.
If the tokens are an organic product of the transaction, there is no significant incentive to waste the world’s precious energy resources by mining for extra tokens.
The Blockchain-Crypto-Solar Connection
Power Ledger first caught the CleanTechnica eye in October, when the company emerged as the winner of Sir Richard Branson’s 2018 Extreme Tech Challenge.
The startup’s business model was inspired by the challenge of incentivizing rooftop solar installations at buildings with multiple tenants.
That’s a thorny problem. After all, why should building owners invest in rooftop solar when their tenants are already paying for electricity? Sure, some property owners see value in attracting green tenants, but that’s pretty weak tea when the urgency of climate action demands rapid, mass market uptake.
Power Ledger co-founder and chairman Dr. Jemma Green was wrestling with that problem in the course of a Ph.D. project. The light bulb went off when she made a contact in the blockchain community. She realized that cryptocurrency would provide tenants with a medium to track their use of solar energy and exchange unused credits with other tenants.
From there it’s just a short skip over to exchanging — or selling — tokens with electricity customers in other buildings.
Skim a little off the top for the property owner and the local utility, and there’s your financial incentive for installing rooftop solar at multi-tenant buildings — and anywhere else, for that matter.
This Is All Happening Really Fast
Power Ledger already had a handful these blockchain-enabled solar trading projects under its belt when it went into the Extreme Tech Challenge, and last month it added an especially interesting one here in the US.
Described as a “peer-to-peer (P2P) renewable energy trading platform,” the system is based at the headquarters of the wholesale-retail energy company American PowerNet, in Wyomissing, Pennsylvania. The solar arrays were installed on carports as well as on the HQ roofs.
Power Ledger describes how the system operates within the existing utility structure:
American PowerNet plans to commence the deployment this month under the existing deregulation rules with the cooperation of the local utility PPL, utilizing their existing distribution system and connecting the solar assets by utilizing platform data from pre-existing meters without the need for additional hardware, software or engineering fees.
One thing that makes the project especially interesting is that Wyomissing is located within the largest US wholesale electricity market, the Pennsylvania-New Jersey-Maryland Interconnection.
PJM is a challenging environment for new clean technology. It’s basically an acid test: if you can do it in PJM, you can do it anywhere.
CleanTechnica reached out to Power Ledger with some questions about the Pennsylvania project, and company co-founder and managing director David Martin graciously provided the answers via email:
CleanTechnica: Why is this deployment significant?
Martin: The American PowerNet (APN) deployment is important because it demonstrates the benefits of direct P2P energy trading are realizable now, without significant or onerous reform, and can be managed simply and efficiently through the seamless integration of an elegant trading platform with existing retailer settlement and billing platforms.
Simply, it shows that where there is a will to access low-cost, low-carbon energy supplies, there is now a way of providing access that is fast, secure and certain.
Innovative and customer focused energy providers like APN can play a significant role in the provision of low-cost and low-carbon energy supplies to consumers today.
CleanTechnica: Since it is a relatively small amount (35kW) being traded, what are the expected benefits to the participants?
Martin: The benefits are broad and go beyond savings in energy costs and carbon emissions. This project is a demonstration of what’s possible from a technology perspective and it’s a strong indictment of the existing demand for an energy economy that is more reflective of the emerging distributed and renewable nature of the energy system.
For the participants, the obvious benefits are lower cost and lower carbon energy supplies but the brand impacts of being at the leading edge of technology change and the move to meet emerging consumer expectations are also enormously valuable.
CleanTechnica: How do Power Ledger’s POWR tokens differ from speculative cryptocurrency like Bitcoin?
Martin: Power Ledger is an energy trading platform that allows for a near-real-time relationship between prosumers (generators) and consumers.
POWR is a utility token that facilitates the operability of the trading platform across multinational jurisdictions. POWR is pre-mined, meaning no energy-intensive proof-of-work validation, and it has a consumptive property within the trading platform – you need it to gain access to the Power Ledger software and to create a liquid trading environment and to support transactions between multiple trading parties in a trust-less environment.
Got all that? The other interesting thing about the American PowerNet project is that Pennsylvania is one of the original epicenters of the US coal mining industry and is still among the nation’s top producers.
Now it looks like Pennsylvania is shaking off the dust of history. APN has been prepping for the blockchain economy for a while now, and the company is in position to help accelerate investment in renewable energy projects. Here’s a snippet from their website:
Blockchain technology is now moving from the testing phase to the product phase…American PowerNet can assist with microgrid peer-to-peer trading utilizing the existing utility system, supply chain and retirement verification of (S)RECs, and the ongoing competitive procurement of electricity.
As for coal, Pennsylvania illustrates the long term troubles facing the US coal mining industry.
Despite President* Trump’s repeated promises to bring back all the coal jobs, 2018 got off to a miserable start in January with the closure of a coal mine and the loss of 370 coal mining jobs in southwestern Pennsylvania.
That killed off any gains — and then some — from the opening of a new coal mine in the same region during the summer of 2017. The new mine only provided for a maximum of 100 jobs.
Another new coal mine was announced earlier this fall for eastern Pennsylvania, but only 25-30 union jobs are expected from that project.
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Photo (cropped): via Power Ledger.