Another one of the potentially endless streams where blockchain could make a difference is certainly energy, specifically electric. Over the past few years, increasing concerns have risen over the monopolies that have shaped in this industry with all what it includes of the issues regarding dependence, over-centralization and lack of transparency and clarity in terms of the fees and policies. These growing frustrations have left the consumers rather dissatisfied with the current situation but unable to unshackle themselves from the obligation of having to deal with the same conglomerates of centralized energy. Enter Electrify Asia. This south-east Asia-centric (for now) company may just be the answer to the millions of prayers from that part of our world. This article will explain exactly why.
What is Electrify Asia?
Electrify Asia is, in short, a start-up whose sole purpose is to decentralize and democratize energy trade between all the intervening parties, all while promoting the creation of new ones (prosumers) in the process. So far, Electrify Asia has transacted more than 30 GWh of electric power ever since March 2017, so it’s safe to say that they are on the right track. The answer to the question that is how they managed to decentralize such a historically centralized market and concept even on a small scale is mainly centered on their product spectrum which will be explained in detail:
Before there is ever a 2.0, there is, of course, a 1.0. For Electrify Asia’s case, that was ‘ELECTRIFY.SG’. This Singapore-based platform was the first electricity retail marketplace in the country. For the pilot project that it was, it was rather successful as it managed a merchandise volume of around 5 million USD which is equivalent to the previously mentioned 30 GWh. As far as robustness and attractiveness go, Electrify Asia is standing on strong foundations. That, surely, was no coincidence, as the choice of Singapore as an initial starting place was based on the palpable need for decentralized, transparent, democratic, competitive and reliable electricity. Another element which made ELECTRIFY.SG viable is the progressiveness of Singaporean consumer to new concepts and ideas despite being somewhat unfamiliar with them. Marketplace 2.0 will come as a culmination of all the lessons learned and will be a pivotal part of a larger product scheme.
Marketplace 2.0, which is web and mobile-friendly, will serve as Electrify Asia’s main consumer platform. It will enable its clients to access smart contracts with either commercial retailers or prosumers. By putting the blockchain smart contract technology to the best of use, the consumer can establish an electricity contract with the provider that which will make all the details stored in the blockchain securely and trust-free. This will also allow both parties to have periodic important data such as their consumption and/or production as well as settlements. In the spirit of hitting more birds with one stone, this step will optimize significantly monitoring and other relevant costs (such as gateway payment costs, operations cost, billing errors, etc.) making transactions smoother with more competitive fees. So far one might think that this is the classic blockchain-based platform, but that could not be more wrong. Electrify Asia has intelligently equipped marketplace 2.0 with tools that make all ends meet from the consumer and provider’s side. Firstly, Electrify Asia’s smart contract has an integrated Software Development Kit (SDK) for providers to create and customize their offers. This SDK will then act as a rating agent gathering a sum of factors (such as pricing parameters) into the billing information communicated to the consumer. As per the consumer’s end, Electrify Asia also introduced the use of Artificial Intelligence into the mix. By studying the consumer’s history and preferences (consumption rates, usage patterns, contract length, etc.) along with all the data from the retail or P2P platforms, the engine can provide the consumer with his/her best correspondent offers. The factors from which the choice can be based on include, among others, pricing, closest provider (P2P) and so on. Electrify Asia intend to make their AI engine englobing and reliable enough to give the consumer the ability to give full authority or semi-full authority of the engine to decide their electricity plan for them.
Synergy put ridiculously simply, is marketplace’s equivalent for peer-to-peer (P2P) trading. A bit more eloquently, synergy is a platform where individual energy producers (dubbed prosumers) and consumers to trade electricity. Synergy is conceived to complete the work of the marketplace in terms of decentralizing the market. But for P2P trading, a whole other set of problems arise. Some of which concern the expensive infrastructure and utility tools that need to be set in place nationwide to make the physical transactions possible. Electrify Asia has promised that it will ultimately bring about the necessary mechanisms (that was strictly accessible to large-scale retailers) to enable P2P trading. Another hurdle, among many, that Electrify Asia has to face in order to decrease their prosumer’s market entry barriers is pricing volatility. To counter this, Electrify Asia adopted what is called a Contract for Difference (CfD). The way that this contract works is through mutual benefit between the producer and a party known as the off-taker. When the price is above the fixed-leg, (which is a price point mutually agreed upon as a threshold between benefit and loss) the producer pays the off-taker the difference, and the same happens when the price is below that threshold. Below is a graph displaying how CfDs work:
To further fortify their prosumer support, being the new and upcoming new and clean energy producers that Electrify Asia wants to promote, they extended their marketplace SDK into Synergy as well. This platform allows various renewable and non-renewable energy producers to register their surplus of electricity into the marketplace and trade it freely. Another major issue that Electrify Asia faces is the legal framework that might hinder or even prohibit P2P trading. For that Electrify Asia opted to go for an Appointed Retailer Entity (ARE) which are licensed or partnered business entities that facilitate supply transactions with customers. These entities can be made to be completely compliant with any country’s legal framework. Below is a graph showing just one example of how AREs can fit into the ecosystem:
Electrify Asia has and continues to, invest so much in peer-to-peer trading. And that is because it represents simply the ultimate solution against centralization. But it is also beginning to catch significant momentum and attention from MNCs and governments. Therefore Electrify Asia is, in an anticipating move, trying to facilitate the path and set the trend for these global companies and governments to source and improve renewables through the model of peer-to-peer trading. Here is a graph that sums up the whole topology of peer-to-peer which might make its attractiveness easier to understand:
eWallet, which is another blockchain-based piece in the Electrify Asia Electric Universe, is an electronic wallet enabling secure, traceable fiat payments. It’s not hard to see how eWallet fits into synergy and marketplace being its adopted payment method. And to incentivize their clientele, after paying the electricity bill, consumers are set to receive ELEC Tokens which are based on the value of the transaction. ELECs can be redeemed by the redeemer for network fees in the Ethereum public blockchain. A particularly useful feature of eWallet is the elimination of counterparty credit risk. That means that through eWallet, which is powered by blockchain, both parties have no concerns over the other party’s ability to fulfill their contractual obligations. In addition to that, eWallet will also facilitate the accumulation and monitoring of Renewable Energy Certificates (RECs) on the blockchain. Below is a graph illustrating the intended usage of the ELEC tokens:
This will provide helpful statistical data in terms of the numbers of renewable energy producers and the volume of energy produced.
Having introduced blockchain and AI into the Electrify Asia realm, they had to bring along their favorite sibling IoT. PowerPod is an IoT communication device that allows real-time monitoring of smart meters and will communicate its loggings onto the blockchain. PowerPod is the final piece of the Electrify Asia puzzle since it collaborates with the other elements smoothly. Although PowerPod is an optional device in the Electrify Asia package, the main reason why PowerPod came to be was for further optimization of the overall system by having real-time surveillance and having access to the significant data combined. Enabling PowerPod on the intended scale will allow processing and correction as time goes on perfecting the transactions and cutting the losses. PowerPod uses commonly used industrial communication protocols such as MODBUS and CANBUS to communicate with energy devices and power systems.
By perfecting each individual product and focusing on growth, Electrify Asia has been able to create solutions that work together quite smoothly making the Electrify Asia product spectrum whole. This coherent ecosystem has made a strong impression on the followers enabling them to collect an astonishing 30 million USD for their ICO, which is the sum of their hard cap. The way they envisioned distributed the funds collected from the ICO are primarily towards Development and Research of 52%, with a decent 19% for staffing and a strategically important 10% for partner relationships especially considering their context. As per the distribution of the tokens, 50% would go into the sale while around 18.5% each for Community development and team members. The rest will be split between a community airdrop (4.1%) and Advisors and Partners (9%).
Personally, I hold very high regard to the cause that Electrify Asia aims to do. The fact that it is a typical David and Goliath scenario makes it even nobler. However, the way they intend to function is above disruption, it is a complete reinvention of the landscape as we know it. That surely entails enormous challenges ( especially logistical) that await them. And I very interested to see how they manage their resources, expectations, and standards while facing these issues.
The road for Electrify Asia is now set clear with future targets such as China, India, and Europe. Technologically, they are still pushing the envelope of innovation forward ( like for example for PowerPod with their intended Demand Response feature that will allow the consumer, thanks to real-time feed to immediately customize his/her consumption for the benefit of the overall system of his personal consumption plan). And for that, they deserve a pat on the back and another graph displaying their overall stack:
Note: All graphs are courtesy of Electrify Asia’s Whitepaper.