DigFin Green is our series profiling founders of fintech companies addressing environmental, social and governance (ESG) solutions, using technology to power financial services towards sustainable outcomes. Contact us if you would like to be included.
Jemma Green is founder of Power Ledger, based in Perth, Australia. After eight years of ESG-related work at J.P. Morgan in London, she returned to Australia to serve in a variety of capacities in superannuation, government and research. She remains an advisor to British company Carbon Tracker and a fellow of Blockchain Australia.
She co-founded Power Ledger in 2016 and serves as its executive chair. Power Ledger is a technology company that uses blockchain to enable clean, low cost and resilient electricity markets.
The following remarks are taken from a webinar organized by the Fintech Association of Hong Kong in October on blockchain in carbon markets as part of a FTAHK content series focused on ESG.
What problem are you addressing?
Jemma Green: Electricity markets are changing from a model centered on large generators to one of distributed renewables, but this is causing problems in the transmission grid: a “duck curve”.
During the day, there’s not much electricity consumption, while rooftop solar panels are generating it, and creating reverse flows. At night there’s less power generation but more demand. This discrepancy leads to serious issues around voltage, grid balancing and the scheduling of baseload power gen. Brownouts and blackouts are nothing to quack about.
We’re seeing innovation in grids and networks, in dynamic pricing, and in agile and congestion pricing – like what Uber does for traffic. Our clients want to change make the market more fit for purpose.
What does Power Ledger do?
Our software provides a market-making mechanism to make renewables scalable without headaches, and help electricity retailers create new products and services.
These come in two categories: the trading of electricity, and trading environmental commodities. We’re using blockchain for settlement and for smart categories.
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We’re developing blockchain for micro transactions and instant settlements, by tokenizing energy units or offsets. This avoids a reconciliation process that would require expensive manual intervention. Smart contracts within the tokens facilitate more complex transaction and optimizes the battery for the greatest sources of revenue. We’ve basically developed a virtual power plant.
Blockchain also enables cross-retail trading. Without it, all of these retail counterparties would require an intermediary. On blockchain they can trade and settle directly. This creates scale. And every transaction is recorded and secure, with an auditable trail.
What projects are you working on?
We are growing rooftop solar in a scalable way in Malaysia. We’re working on the largest P2P project in the world in Thailand connecting six commercial buildings, with the help of the Thai Digital Energy Development Authority. We’re also licensing our software to Chiang Mai University for solar and battery projects, and virtual power-plant trading. We also have projects with KEPCO in Japan, ISGF in India, ekWateur in France, and Silicon Valley Power in the U.S.
There’s less money in selling electricity, but more money in selling solar panels and batteries. Those batteries in turn can provide electricity. How can we turn this into a product and respond to what customers want? By empowering them with choice, so they can be both ESG friendly and be able to save on their electricity bills.
What else do we need to know?
Today 30 percent of households in Australia have rooftop solar panels, and they are quickly adopting batteries. Energy is becoming localized. The peer-to-peer trading of electricity today happens long-distance, but the most value is to created within a community, otherwise you risk pushing electricity back up the distribution network and causing grid outages.
ESG used to be viewed as separate to financial performance, but now they’re intimately linked.
Investors and consumers are also more discerning in their due diligence around greenwashing. In electricity markets, it used to be okay to just have a renewable tariff, but now customers want granularity. They can select solar or wind from a given farm, and use our platform to match the output of those assets to their own consumption.
Big brands, meanwhile, want to procure power-purchase agreements and offtake agreements, in order to facilitate the development of more energy assets. Doing so locally builds trust with their brand.