Power Ledger’s technology creates a marketplace for peer to peer energy and environmental commodity trading.
Our software works alongside existing energy system infrastructure, enabling greater control and ownership for consumers and producers of energy alike.
All energy transactions are recorded on the blockchain, which allows for a direct trade to occur between buyer and seller, greater transparency, increased automation and reduced possibility of human error.
POWR is the bond to use Power Ledger’s platform
When Power Ledger partners with a customer that wants to gain access to the suite of products on the platform, a bond must be provided in the form of POWR tokens.
This POWR bond is escrowed for the period of time that the customer is utilizing Power Ledger’s platform and then returned when the customer leaves the platform, if the customer has no outstanding payments to Power Ledger and other customers.
This process is similar to a rental bond with a real estate agent, however, in some cases Power Ledger customers may opt to escrow tokens indefinitely.
As a B2B software company our customers are large enterprises such as utilities, renewable energy operators, microgrids and property developers. This means when they partner with Power Ledger, they onboard a large number of users onto our platform, such as households or commercial businesses.
There are three key metrics Power Ledger uses internally to track progress in adoption of our P2P suite of products:
- The number of enterprise customers contracted, e.g. utility companies.
- The number of user meters onboarded.
- The amount of MW capacity on the platform, particularly for TraceX and PPA Vision.
More users and more energy being traded on the platform requires more POWR tokens to be escrowed to access the Power Ledger platform.
This model means that as Power Ledger’s technology gains market adoption, the number of POWR tokens in circulation decreases.
Power Ledger releases a POWR Project Escrow Report periodically, detailing the total amount of POWR that was received and held in escrow and also burned for active projects.
These can be found here.
Different products have different POWR requirements
Power Ledger has several products currently operating in the market:
- Peer to Peer (P2P) energy trading (both behind and across the meter)
- Virtual Power Plant (VPP2.0).
- Vision (choose your energy mix).
- PPA Vision (for private PPA billing).
- TraceX (Renewable Energy Certificate trading).
In each instance, POWR is required to access the Power Ledger platform, as follows:
- Our energy trading products require a bond in POWR that corresponds with the volume and value being traded and length of settlement. The escrowed POWR is particularly important when an enterprise customer is setting up a marketplace where end users pre-pay for energy. Under this model, escrowed POWR can be used as collateral protection for the end users and distributed by Power Ledger in the unlikely scenario the enterprise fails to return this prepayment to the users. We are currently developing a smart contract redeem feature that will automate this model. Power Ledger chooses to work with established enterprises with proven financial stability in order to protect all market participants.
- In our recent deployment of Power Ledger’s Virtual Power Plant VPP2.0 product in the Australian national energy market (NEM), the amount of POWR to be escrowed is calculated based on the software as a service (SaaS) fee model and corresponds to the number of households utilizing this VPP functionality. To sign up for this project with our energy retailer partner Powerclub please visit www.powerledger.io/vpp-registration.
- Vision ensures that commercial users of energy as well as electric vehicle (EV) owners can independently verify that their consumption has been concurrent with the generation of clean energy in any given time interval.
- PPA Vision requires a POWR licensing fee that is calculated on the capacity of the renewable energy asset, based per MW capacity of assets being tracked as well as a small fee for every MWh that is being tracked.
- For our TraceX product (Renewable Energy Certificate trading) there is a fee per REC being automatically created, verified and traded on the Power Ledger exchange. A portion of all fees collected may be paid in POWR or may be used for POWR burn.
For the ease of our clients, POWR requirements may be paid in fiat currency (cash) where we convert on their behalf to POWR or directly in POWR.
How market demand for POWR affects circulating supply
There are only one billion POWR tokens in existence, this number is strictly finite and only about half of those have been sold with a majority of those in circulation.
The unsold portion of POWR (approximately ½ of the total POWR minted) is maintained by Power Ledger; some are put aside to provide future funding to the business if the need arises, some are put aside for prospective customers in order to incentivize adoption, called the Growth Pool. When these internal POWR pools are utilized, the POWR that comes out of them may enter circulating supply.
The situations where it can be expected for circulating supply to decrease is each time Power Ledger onboards a new project and the retailer or customer is required to escrow or pay POWR. For as long as the customer maintains use of the platform, the tokens paid by way of bond will remain in escrow and out of circulation for that period. Some POWR collected as kWh fees are “burned” in full or in part and therefore removed from circulation permanently.
These activities reduce the number of POWR in circulation. Therefore, as more projects are participating on the Power Ledger platforms, less POWR are available in circulation.
In our latest escrow report in January 2020, the total amount of POWR tokens removed from the circulating supply for active projects was 2,229,062. Out of the 2,229,062 POWR removed from circulation:
2,229,062 were funded by and/or purchased directly from the market.
2,014,353 tokens were escrowed.
214,709 tokens were burned.
Zero (0) were sourced from Power Ledger’s Growth Pool.
In combination with POWR escrowed previously, POWR removed from circulation for projects now totals 2,719,419 and an additional 214,709 burned.
Our existing escrow model is working well, however, Power Ledger is continuing to explore ways to improve the current product offering with additional token use case experiments that benefit the POWR community. One such experiment is the implementation of the POWR burn model.
The POWR burning model is something that we are trialing currently, alongside our existing POWR escrow structure by using some of the transaction fees to buy POWR on the market and then transferring them into a burn wallet.
A burn wallet is an address that is used by the wider Ethereum community to burn tokens. It is widely accepted that tokens sent to that address are unrecoverable.
The future of POWR
Power Ledger is an established world leader in renewable blockchain-enabled energy trading technology, and we continue to make headway in our mission to democratize the energy sector.
Our team has been asked to present at Capitol Hill to the US Blockchain Congressional Caucus in December 2019, showcasing Power Ledger’s energy trading technology and its successful projects in Thailand, Malaysia, Japan, our home country, Australia. For the most up to date list of the projects as they get announced visit our website.
For any young tech company, the evolution of product pricing is a natural process and along with it the role of POWR may evolve. One thing is certain, POWR is and will always remain the number one token in Power Ledger’s ecosystem, and as the largest holder of POWR, Power Ledger’s interests are aligned with those of our community.
In most jurisdictions, POWR is classified as a “utility token” and not a security. This document is not an offer, invitation, solicitation, advice or recommendation with respect to the subscription for, purchase or sale of, any security, in any jurisdiction. Information is current as at the time of publication.