Project Finance Blog

Power ledger concludes token offering

Posted by Jason Lewis

September 06, 2017

Posted in Blog article

Power Ledger, a company based in Perth, Australia, has now concluded its sale of tokens for a peer-to-peer platform that will enable renewable energy trading among businesses and households. The company initially offered its “POWR” tokens on Sunday, August 27. As of August 30, more than ninety million tokens had been sold, which represented more than 90 percent of the amount it initially offered.  An additional offering is planned for September 2017.
As designed, the POWR tokens will act like a software license, and will enable market participants to access the platform. Those tokens are convertible to “Sparkz” tokens, a second digital currency that represents the actual generation of electric energy, and in turn is convertible to cash. Producers of renewable energy will earn Sparkz tokens for their production. The platform employs Ethereum blockchain technology—i.e., distributed ledger technology, which powers digital currencies like Bitcoin—to create what is otherwise known in the industry as a “trustless” marketplace, one that does not rely on intermediaries like utilities or grid operators to settle the market.
Among other applications, the platform would enable “prosumers” (consumers that produce their own renewable energy through distributed generation resources) to sell their excess electricity back to the grid.  Consumers also may be market participants, and the platform is sufficiently flexible to permit trading by individual users or groups of users. For example, a building, a club, a community solar farm, or a microgrid could transact as a group. The platform also could be used by developers as a source of crowdfunding from smaller investors, who would purchase shares of the revenues from a project.  The company’s website indicates that its platform will be operational in 2018.
Power Ledger is currently discussing partnerships that would expand its reach.  It is testing its platform at a housing development in Perth, where the company claims residents are saving at least 20 percent of the amount they would pay to purchase from their local utility.  It has partnered with Vector Ltd., the largest distributor of electricity in New Zealand, to conduct a trial of Power Ledger’s platform.  It also has discussed potential trials of its platform with Western Power, a distribution company that is owned by the state government of Western Australia, and TasNetworks, the electricity distribution network owned by the state government of Tasmania, Australia.
A wide range of other organizations worldwide seem to be pursuing similar goals. The Australian government apparently has investigated the use of peer-to-peer networks for the trading of renewable energy, and partially funded a trial of such technology by AGL Energy, a large energy industry player in Australia.  Power Ledger also joins competitors SunContract, a Slovenian company that recently conducted a similar token offering with respect to its blockchain-based energy trading platform, and MyBit, which recently conducted a token offering for a platform that promotes investment in large projects by small investors, and among other industries is intended to crowdfund renewable energy projects.  In the United States, a demonstration project has been underway in Brooklyn, New York since 2016 to develop and operate a community microgrid linking local owners of solar panels and permitting them to exchange renewable energy on a distributed ledger.


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