What is Powerledger (POWR): A bright spark in the energy market
Blockchain-based so-called energy disruptor gaining traction in Australia and across globe
The Australian technology start-up Powerledger (POWR) is on a mission to revolutionise the renewable energy markets, using a host of blockchain solutions to try to change how energy is bought and traded between customers.
It has recently migrated to the highly scalable Solana blockchain, and is powered by a dual-token system consisting of the Powerledger cryptocurrency POWR coin, an ERC-20 standard cryptocurrency, and the Sparkz token for end-user transactions.
With a growing list of real-world use cases and collaborations with domestic and international governments, as well as interest from the Australian government’s clean energy regulator, there is much to be excited about when it comes to Powerledger.
So what is Powerledger (POWR), how does Powerledger work and exactly what is the Powerledger coin used for? We will answer all that and more in this in-depth guide. Below we will have a look at the main products provided by Powerledger to give an idea of the would-be disruptor’s vision and aims, while also checking out the tokenomics and upcoming development.
Real-world uses: the East Village Precinct project
Powerledger (POWR) is not just in a concept phase. Genuine examples of the technology are already in development, perhaps most notably the East Village Precinct project near Fremantle, Western Australia.
Powerledger’s 670 kWh community-scale battery will power not only the 36 townhouses planned for the precinct, but adjacent housing projects as well as local businesses.
Through the Powerledger xGrid system, this battery records any excess energy stored in the battery, which can be sold back to the grid. Residents will be able to trade energy across the platform from house to house, thus monetising their energy assets.
In essence, xGrid allows for the creation of a local energy market), where “prosumers”, in the jargon – people who both produce and consume – can trade renewable energy between each other based on demand. Transactions are recorded and finalised on the blockchain.
Further options available for xGrid participants include the ability to exchange rooftop solar energy for products from participating businesses, and a “gifting mechanism” for donating electricity to neighbours, friends and community groups. The entrepreneurial potential for the latter is particularly noteworthy.
XGrid is being deployed in sites across the world, including in the Kanto region of Japan, where eight residential sites generating their own energy through solar panels have successfully sourced 27% of all imported energy from peers. XGrid is also being deployed in India, Thailand and Austria.
What is flexibility trading?
More than ever, citizens are using distributed energy resources (DERs) such as rooftop solar panels, microgrids, batteries and other embedded systems, to power their homes. Powerledger’s MODE Flex (MODE being short for “marketplace for optimisation of distributed energy”) seeks to empower these DER owners to trade surplus energy between each other.
Powerledger’s white paper says: “The rapid penetration of DERs means we now have a distributions system, characterised by bi-directional flows of energy and millions of active prosumers… Consumers are feeling under-rewarded for their contribution. A network that allows consumers to realise value from their investment in DER presents an additional value proposition that could encourage even greater investment in distributed renewables and a new era of network management.”
Being a peer-to-peer, blockchain-enabled system, MODE Flex removes third parties and middlemen, and the associated fees. The consistent rise in residential solar PV installations as evidenced in the above graph shows that the potential consumer base for flexibility trading systems like MODE Flex is bigger than ever.
TraceX: a digital commodities marketplace
According to Powerledger, TraceX “can be used by generators who have certificates to sell, utilities seeking to buy certificates to meet their regulatory obligations, and organisations seeking to buy certificates to meet their voluntary green energy targets.”
The blockchain-enabled exchange allows users to buy and sell renewable energy certificates (RECs) with others. In a boost to the platform, M-RETS, the largest REC registry in the US, has partnered with Powerledger to bring Powerledger’s exchange functionality to M-RETS members.
The exchange could see a considerable rise in engagement soon: it was recently announced that European demand for RECs is growing faster than supply. There is also the inherent underlying value of these RECs; as CNBC reported, the electric vehicle manufacturer Tesla’s profit margins rely on selling RECs to traditional automotive manufacturers.
The dual-token system
While POWR is the primary token of utility on the Powerledger blockchain, a second token called Sparkz is also used.
The POWR coin acts as the contract token or “access permission token”, which any end user must purchase to gain access to any of Powerledger’s platforms. For instance, say a host wants to establish an energy-sharing market like the East Village Precinct example. Sufficient POWR must be purchased to provide enough liquidity in that market.
The Sparkz token is the Powerledger cryptocurrency used at the market level, that is, what energy-sharing participants use to facilitate transactions on a peer-to-peer basis. Sparkz is priced against the fiat currency of the country of use. In Australia, one Sparkz is equal to one Australian cent.
When using a decentralised platform like MODE Flex, individual consumers can convert POWR coin to Sparkz themselves.
POWR is available for purchase on major exchanges including Binance and Crypto.com.
POWR ran out an initial coin offering (ICO) in September 2017, releasing 35% of the maximum one billion POWR supply, raising more than $25m. While Powerledger has stated that token burnings are part of the deflationary strategy, the last figures were released more than two years ago. In six months in 2019, slightly over 2.7 million POWR were removed from circulation. There are currently just under 463.5 million POWR in circulation.
Powerledger keeps 50% of all POWR held in its own wallet, stating that “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 incentivise adoption, called the Growth Pool.”
The latest trading price of the Powerledger cryptocurrency was $0.61, with a market capitalisation of $284.9m, placing it at number 182 in the market rankings. Trading volume is remarkably high, with a recent 24-hour reading of $206.043m, or 78% of market cap. If you’re looking for more on POWR’s chart activity, as well as forecaster price targets, make sure to look at our predictor.
The Powerledger Energy blockchain
In July 2021, Powerledger announced its move from Ethereum to Solana, giving the reasons as advanced scalability and throughput, with the POWR token remaining an ERC-20 standard.
Concurrently, the company announced a proof-of-stake (PoS) model to enhance network security. Validator nodes are hand-picked by the company based on strict performance requirements. Staking rewards are capped at five million a year for the first four years, after which the incentives scheme will be reassessed. The maximum a node can stake will be five million POWR, in order to encourage network diversity.
Any holder of POWR will be able to delegate tokens to a validator of their choice, with no set minimum requirement. The network is still a work in progress; more updates ar e likely.
What is Powerledger planning next?
All eyes are on Powerledger’s transition to Solana and the staking system in the short term.
Further ahead, Powerledger is planning to roll out new projects across the globe, including a collaboration with BHP in Chile over the next three years to provide power to remote communities. Additionally, deployment of multiple projects in Western Australia are under way.
There are currently slightly fewer than 463.5 million POWR in circulation against a maximum supply of one billion.
Powerledger is the brainchild of Jemma Green and John Bulich. Green was awarded ar PhD in energy market disruption from Curtin University, Western Australia. Bulich acts as the technical director, having an extensive background in blockchain and software development.
Powerledger is recognised as a cutting-edge technology company by major governments around the globe.