This Startup wants to 'Democratise' Access to Clean Energy Using Blockchain to Enable P2P Electricity Trading Electrify is all set to commercialise its blockchain-enabled peer-to-peer (P2P) trading of renewable energy in Singapore to allow both utilities and consumers to produce and sell electricity

In Singapore, blockchain has started making inroads to "democratise' the power industry, as the city continues to support technologies to run on renewable energy. Come September, Singapore-based retail electricity marketplace—Electrify—is all set to launch a pilot to test the commercialisation of its blockchain-enabled peer-to-peer (P2P) trading of renewable energy in the city, which allows both utilities and consumers to produce and sell electricity.

The company completed the alpha test of its energy trading platform in January this year in Singapore with 15 participants, comprising 12 consumers and 3 electricity producers. In the upcoming commercial launch of the pilot, Electrify's energy trading platform—Synergy—will have 50 such participants, with access to an upgraded dashboard to view their electricity production and consumption, along with energy supply plans.

According to Electrify's CEO and co-founder, Martin Lim, the platform will offer a secure, reliable and low-cost way of P2P energy trading between producers and consumers. The company is also planning to launch a similar initiative in Australia and Japan. Similarly, investors and utility companies from Malaysia, Thailand, and Spain have also shown interest.

The initiative to use blockchain to facilitate P2P energy trading is not new to the industry. Previous studies have enabled companies in the US, Austria, Germany and other countries to initiate blockchain-enabled P2P energy trading aimed to meet energy demand, improve energy efficiency, and decrease losses of energy during transfer.

Lim maintains that democratising access to clean energy will be beneficial for all. The startup looks at bridging the "incentivising' gap in the energy distribution sector by way of removing intermediaries. Besides facilitating the platform for power utility companies, anyone with a solar panel-fitted roof having enough energy storage can also sell electricity.

He added, "The platform is agnostic. It will allow anyone (households and businesses) with a solar panel-fitted roof having enough energy surplus to sell back to the grid—or to someone who cannot put solar panels."

However, Lim feels that the initiative will have more business consumers than domestic. He reasons, "While a domestic user may first consider to consume electricity that comes at a cheaper price, be it solar or carbon, industries have KPIs, especially around the sustainability mandate. They mean to demonstrate or consume energy that comes from sustainable sources."

Electrify co-founders (L to R): Martin Lim & Julius Tan

Electrify's Energy for All

Power distribution system has extremely complex and vast infrastructural set up—from power grids, generators, meter operators to control areas, maintenance, etc. Lim, along with his co-founder Julius Tan, previously worked for the largest solar developer and retailer in Singapore.

According to Lim, in most countries, when the solar energy is sold and exported to the power grid, its pricing becomes detrimental. "In the simple context, it is sold at a wholesale price," he said.

"Though Singapore started the deregulation of power industry in 2001, there are still a lot of transparency issues in the market that prompted us to start Electrify. We are glad to say that Synergy is close to commercialisation," Lim said.

So, Electrify has installed IoT devices at various levels of the operating distribution system of power grid companies to be able to pull data on energy production and energy consumed at the same time. Consumers can buy energy from an electricity retailer through "smart contracts"—a legal term of the agreement between a buyer and seller contained in a distributed, decentralised blockchain network.

"We will charge a transaction fee against the energy being used based on the volume. So the more grid we are deployed on the greater the revenue," the co-founder said.

Moreover, using Electrify's Synergy Alpha, a consumer can not only view and pay for his energy consumption, but he/she can also view the main source of energy, along with transaction history, to enable fair trade practice.

Singapore's Rooftops Turning into Renewable Energy Source

Singapore has very limited options when it comes to generating renewable source of energy. Being an urbanised and populous nation, the city derives a majority of its electricity from gas-fueled power plants. But, over the years, the city is shifting its focus to harness renewable energy via the installation of solar panels run by PV systems—therefore, making rooftops an ideal platform.

In fact, United Overseas Bank and Dutch Bank ING have invested a significant amount on a local renewable energy company, Sunseap, to install PV systems on rooftops across Singapore. According to reports, Sunseap will install PV systems on the rooftops of 210 sites, from commercial and industrial to government premises.

Blockchain, on the other hand, has proved to be an asset in various sectors for transactions, for record keeping, moving or tracking products, etc. In the logistics industry, for instance, blockchain is great for transferring of data between nodes, fulfilling smart contracts that tracks products movement, as opposed to the current state.

To the question, is blockchain going to disrupt the power industry? Lim replied, "Well, yes and no. When it comes to energy, blockchain can be great on tracking of consumption; tracking of transaction; tracking of data. It's not going to be great at installing a copper grid, it may not be great at increasing the transformers or sub-station, hardware, etc. But, why blockchain is significant is because the ownership of data is the key."

"The ownership of data is very important in the energy space, and that is when blockchain becomes crucial." Martin Lim.

In context to Singapore, the industry is well-aware of the technology as there is a huge unmet demand for such energy. And, as more and more companies such as Electrify start adopting sustainable energy, the demand is expected to go through the roof.

Last year in October, Singapore government-owned electricity and gas distribution company, SP Group, launched blockchain-driven renewable energy certificate (REC) marketplace to enable local and international organisations to trade in RECs. The company in a press statement said that the technology will ensure the security, integrity and traceability of each REC transaction, while driving greater integration of renewable energy sources on the electricity grid.

Lim maintains that the startup is very mindful of regulation. "This is why we've been taking baby steps before we fully launch the commercialisation of our platform," he added.

Is "More' an Answer to Renewable Energy Crisis?

Renewable energy is the buzzword in today's power industry. According to a January 2019 report by Bloomberg New Energy Finance (BNEF), global renewable energy investment surpassed US$332.1 billion in 2018, with the increase of solar photovoltaic (PV) installations from 99GW in 2017 to approximately 109GW in 2018.

China is one of the countries that invests the most into renewable energy, followed by the US and India. In fact, many countries have started taking advantage of the technology's fiercely improved competitiveness, such as Saudi Arabia which is planning to invest $50 billion in renewable energy. Similarly, Mongolia is investing $85 million in wind turbines. Meanwhile, Costa Rica, Sweden, Iceland and Paraguay are already running 100 per cent on renewable energy.

But, somehow, the renewable energy industry is not growing as fast as our planet needs it to face the threat posed by climate change, including burning of fossil fuels and natural disasters caused by hydropower dams. Although many countries have started to shift its energy sources with renewable alternatives, such as wind and solar power, the infrastructure to build renewable energy sources, however, is expensive, but is developing constantly.

"People often take a broad stroke on renewable energy, and say, "all the power grid needs is more renewable energy, more solar panels'. It's just about more, more, more and more. But that in itself is a bit erroneous, because if you consider it's not about whether there's a demand.

"But there is a mix of question arising: why don't we have more renewable energy? What exactly is holding back investors, bankers and people to invest more? Though there's a lot of money going into the industry, but why isn't "more' being done?" were some questions Lim raised during a conversation with this reporter.