Skip to 0 minutes and 14 seconds Let’s analyze Powe Ledger P2P energy trading application. We know that it allows users to trade energy between each other. We also know that it has a lot of advantages. Users gain control over their generated energy. Consumers can select buying from a clean energy source. Prosumers obtain more money from selling their power surplus. The system benefits from a blockchain-level degree of transparency. Lower electricity bills, making investments in DERs more profitable. And all this will be done using the existent infrastructure, which implies no massive costs of deployment, no going backwards in any way. We know all that, but how does it work? Let’s meet the players. First of all, this is the Application Host.
Skip to 1 minute and 1 second He designed an application that allows users to sell and buy electricity, and wants to run it within the Power Ledger platform. In order to access the platform and conduct a business in it, he needs to buy POWR tokens. The Application Host has taken into account the number of customers that will be using his service. He definitely doesn’t want to be short on POWR tokens, as this will determine the volume of his business! The Application Host missed the Power Ledger ICO, so he has to acquire them through public exchange. Now the Application Host has POWR tokens, so he can turn them into Sparkz whenever he wants.
Skip to 1 minute and 36 seconds Sparkz will be the currency used by the users of his application, so he needs to keep a balance between the amount of POWR and Sparks he has. He decides to exchange enough to have 100.000 Sparkz. We just jumped between the two levels in which the tokens operate! This is Sarah. Sarah installed PV panels in her roof some time ago, and every month she ends up generating more energy than the one she consumes. She decides that it’s time to start leveraging that, so she decides to join the Power Ledger Platform, and becomes a prosumer within the system.
Skip to 2 minutes and 11 seconds Tom is Sarah’s neighbor. He doesn’t have any solar generation at all, but he heard that joining the Power Ledger platform presents a lot of advantages for regular customers as well, so he decides to become a Consumer within the system. First of all, Tom has to exchange local currency, in this case dollars,
Skip to 2 minutes and 29 seconds to acquire the system’s token that can be used to buy energy: Sparkz. He buys them from the Application Host. Let’s say Tom decides to acquire $1000, which is the equivalent of 100.000 Sparkz. He gives the money to the Application Host, who gladly exchanges them for Sparkz. Now Tom is able to start buying energy from Sarah! He wants to buy 10MWh from Sarah. In that precise moment, the price of the electricity is at 10 cents per kWh, so Tom has to spend 10.000 Sparkz. Sarah receives 10.000 Sparks in exchange for the energy she sold. Now she’s able to take them to the Application Host and retrieve a reward in form of the local currency. She gets $100.
Skip to 3 minutes and 13 seconds Guess who is going out tonight! With this simple process, Sarah just monetized her energy surplus by selling Tom cheaper and cleaner energy. Now here we have Emma. Emma has a good eye for investments, and she didn’t miss the opportunity to acquire POWR tokens during Power Ledger’s ICO. Now she’s studying the different options she has to invest these tokens and maximize her profits. That’s when she comes across the concept of Autonomous Assets. She learns that it is possible for her to invest part of her tokens in Renewable Energy Infrastructure, becoming a shareholder of it. Emma can use part of her POWR tokens to acquire a percentage of ownership over that asset.
Skip to 3 minutes and 56 seconds When the asset starts operating, she’ll start receiving a fair percentage of the income! A new solar installation on her building’s roof catches her attention. She already knows where to invest! She uses POWR tokens to acquire 25% of the ownership. From now on, 25% of the energy generated by that asset will belong to her. It’s just a matter of time until she starts getting revenues! All of the actors are very happy with the results, but how do we incentivize the increase of green energy producers even further? Well, from all the electricity traded in the platform, Power Ledger retains a small transaction fee.
Skip to 4 minutes and 33 seconds Power Ledger will use these fees to acquire more POWR tokens available in public exchanges, in the same way an independent application host would do it, but with a different purpose. So, what for? To use them as periodic rewards for the platform users. And what is the criterion for reward distribution? The greener you are, the bigger the reward! This way, Power Ledger incentivizes a higher penetration of renewables into the grid. All these cases have something in common. Whether you are a regular energy consumer like Tom, a prosumer like Sarah or a cunning asset owner like Emma, you need POWR tokens to participate in the platform. As we learnt, POWR can be obtained in two different ways.
Skip to 5 minutes and 17 seconds Bought from an Application Host, or bought in a public Exchange. Unlike other tokens, the total amount of POWR will never increase. This will boost both the demand for POWR and the generation of clean energy. It’s a win-win situation. These lessons have been made in collaboration with Power Ledger. I would like to invite you to follow their advances towards the future of the energy sector.
Enabling peer-to-peer energy transactions
In this video you will learn about the possibility of enabling peer-to-peer energy transactions between prosumers.
A lesson from Oriol Pujoldevall, Blockchain specialist & lead educator
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