A solution to corporate sustainability is possible and begins with smart technology, writes Nick Martyniuk, CEO at WePower.
Digital advancements in the energy industry are helping smaller businesses match the sustainability efforts of the big end of town by reducing carbon emissions and energy expenditure.
Giant organisations like Amazon, Facebook and Google are investing heavily in technology to reduce the impact of climate change. Their size allows them to build solar farms, batteries and wind operations to power their energy-hungry acres of servers and data centres. For most businesses, this is simply not an option. But advances in technology are opening the door to other innovative energy procurement choices.
According to Global Markets Insights Inc, blockchain technology in the energy market is expected to grow from $200 million to $18 billion approximately in five years. One of the reasons that blockchain is so uniquely applicable to the energy industry – and particularly to power procurement for business – is that it can connect energy expenditure by end users back to generation projects in a way that’s reliable, transparent and secure.
The traditional process of purchasing renewables for businesses is cumbersome, expensive and available only to large corporations. Power Purchase Agreements (PPAs) are used to obtain large amounts of energy at a fixed price from generators, for over a span of many years. For very large customers PPAs reduce exposure to energy price changes by locking in a long-term power price. But they are traditionally rigid, illiquid and unavailable for direct purchasing to all but the largest energy consumers.
Blockchain can be used to fractionise PPAs and make them fungible, allowing for flexibility in the contracts, liquidity, multiple counterparties and a much shorter settlement period. The threshold for direct energy purchases drops from $2million annually to $100,000. This enables smaller businesses to buy verified green power directly without purchasing offsets. By choosing to support green power, and by choosing to support specific renewable generation projects, smaller businesses can have a “voice” in an energy conversation that was previously dominated by the big end of town.
The Australian market is ripe for this sustainable infrastructure. The recent launch of the solar energy project in Robinvale Victoria is the first to provide a secondary marketplace facilitated by WePower’s blockchain technology. Numbers and research also prove that data centres and local governments are ready for this transformation.
We are certain that this decentralized nature of energy production will see the development of more accessible energy transactions among smaller businesses, which will help them accelerate their shift to renewables and a more sustainable future.