In 2017, the founders of Spanish startup FlexiDAO spotted a potential niche where blockchain could make a difference. A distributed ledger could solve a growing problem for businesses buying clean energy supplies over the grid—to make sure a specific renewable plant is producing at the exact time you need electricity.
Traditionally, clean power producers and consumers have relied on energy attribute certificates (EACs), also referred to as guarantees of origin or Renewable Energy Certificates, as a way of certifying the source of energy. They are meant to encourage clean energy investment by giving customers a way to pay a premium to renewable energy producers, with the hope that this money will get reinvested in new plants.
When it comes to measuring carbon emissions, however, traditional EACs are imperfect instruments. They do not take into account the moment in time in which the green energy was consumed or produced and the price of an EAC, at around 1% of an energy bill, is too cheap to drive real investment in new plants.
With businesses facing increasing scrutiny over their commitment to carbon reduction, FlexiDAO realised that a blockchain platform could add an extra layer of transparency to EACs. It allows each unit of energy to be given a smart contract, recorded on the distributed ledger and allocated to a specific customer. It results in accurate measurement of the real carbon footprint of a company’s energy consumption.
FlexiDAO created a distributed application, called REspring. Energy retailers can use it to enhance the renewably sourced supplies they offer to carbon-conscious customers. It tracks the kilowatts bought and sold in physical or virtual power-purchase agreements, green energy tariffs, community solar trading schemes and electric vehicle charging initiatives.
“Having more accurate, granular requisites over the source of energy can drive up prices, hence fostering investment in new plants,” says FlexiDAO’s Joan Collell. “Blockchain finally allows for that level of granularity.”
REspring has been adopted internationally by large power users looking to enhance their environmental reporting, such as Vodafone or El Corte Ingles, Spain’s leading department store. Energy firms including Iberian majors Acciona Energía, EDP Renewables and Iberdrola are including REspring reporting in their green tariffs and power purchase agreements (PPAs). Each year the platform tracks about five terawatt-hours (TWh) of renewables, out of a total of 3269 TWh in 2020.
FlexiDAO is not the only company that has found success in applying blockchain technology to EACs. In France, Engie-owned company The Energy Origin offers a similar service. Meanwhile, Power Ledger, an Australian firm, also provides guarantees of origin as part of a wider suite of blockchain-enabled services focused mostly on energy, grid flexibility and environmental commodities trading. •
TEXT Jason Deign
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