Bitcoin is the future of local and community renewable energy trading and EV charging

Dr Jemma Green, co-founder and chair of Power Ledger.

A new bitcoin company has raised AU$17 million (£10.3m or $13.7m) in 72 hours to support a revolutionary technology platform that will allow electricity producers and consumers to trade directly with each other in tiny units of power.

This article first appeared last week on The Fifth Estate.

Power Ledger is at the forefront of a disruptive wave affecting the energy market that will see the end of the dominance of centralised generation and the increasing participation of building owners, smaller renewable energy suppliers and electric vehicle owners in a peer-to-peer marketplace, all made possible by the new, internet-based encrypted currency, bitcoin.

Consumer are the ultimate disruptors, David Martin, Power Ledger’s co-founder and managing director says. “Consumers have said, ‘I don’t want to buy energy from a coal-fired station’, instead saying this model of energy transaction is what they want to participate in’.“The concept of peer-to-peer [energy] trading is something that has universal appeal to customers … it’s a demonstration that the community wants to be part of the power economy of the future.”

“The concept of peer-to-peer [energy] trading is something that has universal appeal to customers … it’s a demonstration that the community wants to be part of the power economy of the future.”

Dr Jemma Green is the other co-founder and chair of Power Ledger. Her background is in financing and accounting at JP Morgan in London but also financing environmental sectors. In 2013 she returned to Perth and did a PhD in Energy Markets and Disruptive Innovation and also featured as a member of our Sustainability Salon for Perth and WA.

In a podcast with bitcoin.com website she explains how she came by the idea for Power Ledger. She saw that in Australia 20 per cent of houses have rooftop solar but hardly any are on high-rise apartment buildings. She saw the potential for these buildings acting as energy retailers, supplying their residents, and designed a system for a building in Perth.

However, she was unable to find software that allocated the electricity to each apartment until she met some blockchain developers in January last year, and realised blockchain was perfect for her needs.

A problem was identified with the power grid, which is that if some apartment residents are using local energy, fewer are using the grid and so those consumers will pay proportionately more. Power Ledger was formed in May last year, just after the birth of her daughter, to explore how blockchain could circumvent this problem by allocating small transactions to each apartment.

A pilot project in a retirement village south of Perth from August to December 2016 proved the success of the concept. A second trial was conducted in Auckland with the local network operator and linked up with the banking sector to complete the loop.

Sell your solar power when you’re out and don’t need it

“It means that I can sell to others the electricity I might have utilised when I’m not in my apartment,” Green says.

“Schools and any partially occupied building owners can do the same. If I’m not using that electricity, then it can be spread equally across everybody in the apartment block or network. This also incentivises people to use less electricity as they can sell their unused power and make money.”

Power Ledger’s platform connects to smart meters to tally how much power is generated and how much is used. Its software is installed and the revenue information is extracted into the blockchain. It is priced differently according to the time of day and the laws of supply and demand.

The blockchain can be used to fractionalise the power stored in the battery or that is directly generated, and allocate it.

Some of the power may be owned by a third party. For example, a solar farm can be part owned by investors, say a pension scheme, which recoups the revenue from sales.

Presently, if an apartment has rooftop solar and is selling its surplus back to the energy company it will typically not be paid for 60 days. With Power Ledger’s system, participants can monitor their revenue in real time.


“You could also have a marketplace, and this could bring the price down,” Green says. “Supply and demand would set the price. The cost curves for batteries and solar are coming down. It’s low cost electricity.”

Power Ledger issues tokenised values called Sparkz for a unit of electricity, representing one low-value unit in the host country. Electricity is priced in the local currency. Suppliers will be paid in Sparkz at the local cost of power. If the unit price is 30c/kWh they will receive 30 Sparkz. E.g. 1 Sparkz = 1 AUD.

POWRs are another token, which represent investments in the company. Their price can vary, but this does not affect the cost for electricity for the everyday consumer. It is these tokens which are being offered on the market.

“The more application posts offer these, the more competition there is. We’ve created one billion and are selling 350 million at the moment in an initial coin offering (ICO),” Green says.

“We sold 190 million of these last week to raise 17mAU$ in 72 hours in a public pre-sale of 100 million Power Ledger tokens — called POWRs — and a discounted private pre-sale of 90 million POWRs.

“On 8 September we open the public sales and our supporters and platform users say they want to have the option at buying at a market price. This will be determined by the number of tokens left divided by the amount of money pledged in the sale.”

This sale will last for four weeks. Tokens can be bought from the website tge.Power Ledger.io. David Martin believes it is “not unreasonable to expect” that this next offer will raise $20-30 million.

The Sparkz power tokens are effectively a means for markets to trade and self-regulate, says Green. Utilities will purchase the tokens and use them as bonds to trade with customers.

People in the banking industry are a little sceptical of blockchain. This is because there is much vapourware out there, Green believes. “A country’s laws needs to be attached to a project in order to support and validate it,” she explains.

“Power Ledger has a platform, the first in Australia. Our lawyers say our tokens are not a financial product as such, but they are designed to the same standard, with a constitution, shareholders and rules under national corporate law, in order to provide confidence.”

The second pilot was across networks and included banks, which it was really hard to persuade to be involved.

Use bitcoins to pay for charging electric vehicles

In the future Power Ledger hopes to use the experience in a project involving solar-powered apartments in Fremantle, Perth. One of these will possess a shared electric vehicle (EV), charged from the panels, which any member of the public can use.

They will be able to pay for it with the bitcoin platform. They will also be able to charge their own electric vehicle on the charging point. All of this gives the building an income stream on the sale of their generated electricity to EV owners.

This means of selling investment in energy projects could replace power purchase agreements in the future. Instead of a generator selling to a small number of large customers they could sell to many small consumers.

Therefore a developer of a community energy project could sell small amounts to purchasers and in so doing provide liquidity by using the tokens for trading the assets. Power Ledger calls this “fractionalised ownership” or “asset germination”. Green says that this approach will be deployed on a project in the near future and that they are in conversation with financial exchanges that could partner on this.

“Not everyone can afford solar panels,” she says. ‘The people who are paying for it are those who can afford it the least. So our platform will provide low cost renewable power to people who don’t have solar panels while utilising the grid and maintaining its relevance.

“It will also work for any type of electricity. It’s ambivalent about the source, so could be used for wind. Wind and solar are good partners as one is often providing power without the other, lessening the need for storage.”

Green recently attended a gathering hosted by Richard Branson about blockchain on his island where she heard about other social uses for blockchain. For example blockchain is being used to eliminate land theft in places like Georgia and Afghanistan where it’s being used to update the land registry.

“It’s about the democratisation of power,” Green says. “We see ourselves as being a distributed ledger for distributed energy markets. It’s a revolution, away from the one way street of the century old system.

“The old centralised system will continue but we will have a hybrid one. This disruption is happening with our without Power Ledger but what I think our system offers is to do this without the destruction of value.”

David Thorpe is the author of Solar Technology and The One Planet Life.

I am a convert to hydrogen fuel cell electric cars

The car I drove: the Hyundai prototype ix35 hydrogen fuel cell SUV

Yesterday at the Investing in Future Transport event in London I was able for the first time to drive a hydrogen-fuelled fuel cell car, and it has seduced me.

Anyone who knows me is aware that I am no petrolhead. I don't particularly like driving, although I did when I was young, and I would much rather be on my bike. My last car was a Ford Focus, which I chose because, although a diesel, it did excellent mileage and was easy to handle. It was scrapped at its last MOT and now I share my wife's Micra; we downsized.

But this car felt like a dream. It is a Hyundai prototype ix35 SUV, which has been selected by the European Commission-backed ‘Fuel Cells and Hydrogen Joint Undertaking’ (FCH JU) to be used as a demonstration vehicle to test and promote hydrogen fuel cell technology in a real-world environment. That's why it was there at City Hall and I was allowed to drive it.

It is an automatic, so there are only two pedals. In addition, it has no handbrake, so there are disconcertingly few controls. It is also a left-hand drive as, so far, there is not a right-hand drive model available. There are only 20 in the whole of Europe.

Acceleration is very fast and immediately responsive. I was told by the public relations lady sitting anxiously next to me (the car is probably worth a hundred thousand pounds) that it does 0 to 60 mph in 11 seconds, and that you can drive for 300 miles without needing to fill the tank.

That means you could reach most of the United Kingdom from almost anywhere else in the country.

The only slight reservation I had, was that if the lever was not positioned in neutral the car tended to move forwards slowly, so, pulling up at traffic lights, you have to keep your foot on the brake. You could put it into neutral, but then it would take longer to start up.

Of course, it makes absolutely no noise, so there is an artificial purring sound added in the design so that, reassuringly, you know that the engine is running. The display tells you how many miles worth of hydrogen is left in the tank. By the way, the tank itself is under the boot, and leaves plenty of storage space.

Speaking at the event, Hyundai's Dr Ing. Sae Hoon Kim told delegates that he thought ultimately hydrogen vehicles will play a strong role in what will inevitably be a mixed picture for personal transport. “Fuel cell electric vehicles (FCEV) are perfect for long-range, but smaller electric vehicles are suitable for urban driving, because they hold less charge – a maximum of 80 miles – and take longer to charge," he said.

It takes about as long to refuel an FCEV as it does a conventional petrol car.

Since 2000, Hyundai has produced 200 FCEV SUVs. The current model, that is about to go into production, will use an induction motor, not a permanent magnet motor, and have a 525km range. It can do 1-100kmph in 12.5 seconds, with a 160km/hr maximum speed.

The main drawback right now, he said, is durability; the fuel cell stacks can only last for about 100,000 km. Previously, there were issues with a danger of the water that is output from the car (its only output) freezing inside under certain conditions, but this danger has been eliminated and tested in Arctic conditions.

As far as production is concerned, they are produced on the same line as conventional vehicles. The fuel cell is installed in the same place as the engine. “Hyundai is intending to go into mass production with the cars in 2015," Hoon Kim said. Production of the first thousand will begin next year and be part of test fleets around the globe.

Currently, prices are an eye-watering five times greater than the conventional car, but, Hoon Kim said, this will come down.

They may be 60% efficient compared to an internal combustion engine's efficiency of about 30%, but the real test is well-to-wheel comparison of carbon emissions which, of course, depends on how the hydrogen is generated.

The dream of the hydrogen economy is that all hydrogen will be developed from renewable sources. At present, much of it is reformed from fossil methane. This methane could come from the sustainable anaerobic digestion of organic waste. Otherwise, it can come from the electrolysis of water using renewably-generated electricity.

What is the global warming effect of driving a hydrogen fuel cell vehicle, if the hydrogen is electrolysed using mains electricity in the UK today?

Assuming 56kWh of electricity produces 1kg of hydrogen, which is the claim of ITM, then, if we take the latest figures from Dukes, which say that 443 tonnes of carbon dioxide were produced for every gigawatt-hour (GWh) of mains electricity (in 2011, the most recent year for which figures are available), that is 24.8kg CO2 sent into the sky.

This compares to 10.472kg of carbon dioxide emitted on average for every gallon of petrol burnt in a car. Accounting for the fact that the hydrogen vehicle is around twice as efficient as a petrol-driven car, this means that there is little difference between their emissions overall.

Interesting as it is, this is academic, not least because we are decarbonising the grid. Besides, there are several prototype facilities in the UK already producing hydrogen for vehicles from renewable sources. Any small-scale renewable electricity generator can be set up right next to a refuelling station, producing hydrogen 24/7. The great thing about hydrogen is that it is an energy storage medium. The wind blows at night and you can’t use the electricity? Save it in hydrogen.

Marks & Spencer's, Walmart and FedEx are already using fuel cells in forklift trucks in their warehouses because they keep going for many times longer than battery-powered forklift trucks. This is a niche application, of course, but it will accelerate the development of fuel cell vehicles generally.

There are several drivers for this development: much less oil is being found by prospectors than previously and there is an imperative to decarbonise transport.

This is a huge opportunity for the UK and we should be prioritising it. Transport Secretary Norman Baker sent a video message to yesterday's conference in which he touted the Government's UKH2 Mobility project, launched at the beginning of this year, under which 13 industrial partners are evaluating potential rollout scenarios for hydrogen for transport in the UK.

More recently, five projects have been announced that will demonstrate the use of fuel cells and hydrogen and show how they can be integrated with other energy and transport components, such as renewable energy generation, refuelling infrastructure and vehicles, to develop whole systems and show them working together.

There is fierce competition from America. Last month, the US Department of Energy (DOE) released its final report for a technology validation project that collected data from more than 180 fuel cell electric vehicles over six years. It shows that development of fuel cell systems exceeded expectations, which will spur a new round of research and development.

The main problem in the UK is not a shortage of inventors, researchers and developers, it is a shortage of partners at the industrial level who can take our inventions up to mass production and capitalise on them to the fullest extent. We don't have our own auto manufacturing company. This, despite the fact that we manufacture 1.4 million cars a year, most of which are exported.

This is where the Department for Business, Innovation and Skills should step in. When the results of UKH2 Mobility are known, the full weight of Government backing should be put behind the chosen strategy.

Of course, we need inward investment to help to make this happen, but for once we should retain ownership. This is a win win proposal.

Our personal transport future will, in a couple of decades, comprise a complex picture with a mix of electric vehicles of different sizes, powered by both batteries and fuel cells, plus biofuel powered vehicles. We will also see much more electric-powered mass urban transport systems.

In this picture, hydrogen fuel cell vehicles will play a big part, and I, for one, want to own such a vehicle, that has been manufactured in Britain by a British company.

So get on with it!

Do electric cars really save carbon emissions?

Smart grids, together with electric vehicles, will enable their owners to sell power back to the grid, make money for themselves, and help keep the network from overloading.

But research shows that the cost of reducing carbon emissions this way is high compared to other methods.

Smart grids will be essential to the mass public uptake of electric vehicles (EVs) without overloading the electricity network, according to a report, Smart Grids and Electric Vehicles: Made for each other? from the OECD's International Transport Forum that was published yesterday.

It is assumed by governments that electric vehicles can be a significant means of decarbonising transportation to make it more climate-friendly. However, there would be a concomitant increase in demand for electricity, that must be clean.

The report finds that smart grid technologies, if rolled out nationally, make an ideal partner to EVs, because they enable demand management and therefore a reduction in peak electricity supply requirements, meaning fewer power stations would have to be built.

Moreover, EVs will be able to use their batteries to store intermittent solar and wind power supplies at off-peak times and feed the power back into the grid when needed, should the vehicle not require it.

"Vehicles are parked on average 95% of the time, providing ample opportunity for the batteries to be used in this way," the report observes.

EV owners would be paid for permitting this, reducing the overall lifetime cost of owning such a vehicle. This cost is already, on average, less than that of an internal combustion engine, despite the higher purchase price, because of the vastly reduced running costs.

The report therefore recommends that governments or network controllers should change the tariff pattern of electricity pricing to encourage the take-up of smart grid technologies and the use of electric vehicles for supplying power to the grid.

EV owners would have the added benefit that their vehicles could provide backup supply in case of power cuts.

Do EVs really save carbon?

But do electric vehicles really reduce carbon emissions when compared to the internal combustion engine (ICE)? A discussion paper, produced in April for the OECD, compared the lifetime impacts of different vehicles, taking into account various electricity generation scenarios.

It found that, for 4-door sedan and 5-door compact cars, the cost was at the high end of the range of costs of measures to reduce carbon dioxide emissions in the transport sector: between @500 and €700 per tonne of CO2 avoided. That is a lot.

The compact electric van was more of a bargain, largely because it travels further, therefore saving on fuel costs.

But the degree of carbon abatement benefit does depend on the electricity generation mix in the country concerned. If a large amount of coal is burned there may be no carbon dioxide savings over conventional vehicles.

The study adds “even in regions where baseload generation is relatively low carbon, high rates of peak hour charging will come from marginal electricity generation which may be much more carbon intensive", like coal, oil or gas. It adds: “the timing of recharging will have a significant impact on overall greenhouse gas emissions for electric vehicle use)".

The study also found that households may well not buy electric vehicles as 'like-for-like' replacements for fossil-fuelled cars. For many urban households, the electric vehicle may be a two-wheeler or other small, purpose-built, low range, agile, easy-to-park and congestion-beating urban electric vehicle.

The 4x4 will still be used for long or family journeys.

What is a smart grid?

The scenario above would take off after 2020, the date for the UK target of installing smart meters into every building in the country, provided that current concerns with privacy over data provision from smart meters are dealt with.

Many companies are currently positioning themselves to provide this service, and a huge amount of capital is being invested.

The digital technology installed in the metering network will enable communication, and, where permitted, switching capability, to be two-way between the utility and the customer's premises. Consumption and pricing information will be available almost in real time.

Utilities will therefore be able to dynamically manage the system "as efficiently as possible, minimising costs and environmental impacts, while maximising system reliability," the report says.

Motorists will be able to plug in their cars to recharge either at the end of the working day and overnight, or, if their employer permits, during the day while they are at work.

It has so far been assumed that off-peak priced electricity would only be available overnight, but the report suggests that smart grid technologies will let these tariffs apply automatically regardless of when the owner is charging their vehicle.

This will provide opportunities for EV owners, business fleet managers and employers, to make money from reselling electricity they purchase in this manner, as well as minimising carbon dioxide emissions from electricity generation.

EVs could feed electricity either back into the grid, or into homes and buildings. Smart meter technology could be programmed to determine, on the fly, at any given moment, which is the most financially advantageous use of this stored electricity.

EV ownership could grow to account for a substantial share of electricity consumption and peak load. Some scenarios put the increase in peak demand by over 20% in the long-term. The greater the increasing consumption, the larger the potential benefits from using smart grid technologies.

So far however there has been no study I know of that attempts to calculate the lifetime carbon emissions impact of installing the smart grid.

Batteries must do better

The report notes several issues that need to be addressed before this scenario can be realised. Firstly, the availability of such capacity during peak demand periods is uncertain and needs to be mapped.

Secondly, battery technology is not yet at a point where units that can perform efficiently in this way over a long period of time are commercially available.

Also, the capability of the smart grid to provide this function has not yet been demonstrated on a large scale. The report adds: “the sheer number of electric vehicle connection points that would need to be managed makes it prohibitively expensive at present".

Two technical developments therefore are required: charging times must be reduced significantly and battery storage capacity increased dramatically.

There have been as exciting developments in this respect: at the beginning of last year, the University of Illinois, and nearby Northwestern University, announced a breakthrough in charging time, and last October Nissan, working with Kansai University in Japan, announced that it had reached the charging time of just 10 minutes.

All these solutions use changes to the design of electrode and are lithium-ion batteries. Nissan said it would take up to a decade to get such batteries to the marketplace. One of the main challenges to overcome is to minimise the reduction in capacity of the battery over time as a result of such fast charging and frequent discharging.

In a way, the question of carbon impacts are immaterial. People will desire cars for the foreseeable future. The market will meet this demand. The grid will be decarbonised anyway.  Eventually.

But don't write off the internal combustion engine just yet, especially as they will become more and more efficient.