Talk community interview: WePower
- What does WePower see as the biggest opportunity for the smart energy industry?
There are few key aspects of our approach:
- Financing through upfront energy sales — nearly all energy financing at the moment is either debt or equity-based. This means that new energy projects are funded by either borrowing money or giving up a stake in a project or company. This creates a very complex process, which suffers from intermediaries, liquidity issues and access limitations. WePower uniquely offers an opportunity for a new green energy project to fundraise by selling their future energy production upfront in a form of energy tokens, which ensures investment liquidity and access to capital without geographical limitations.
- Grid integrations — energy production and supply is very complex 24/7, 365 interconnected system that is managed by the national grid operators in every country around the world. Many current renewable energy projects focus to try and take advantage of the current trend to use/integrate the P2P production and trade as well as introducing siloed solutions because grid integrations are complex and require a rare technical skillset to make them work effectively. This approach limits the real-world scalability that is needed to make them not only cost effective but a viable addition to the smart grid production mix. WePower is able to propose a blended approach because its CTO and co-founder Kaspar Kaarlep has led one of the few successful country-wide smart grid development initiatives in Europe and has built a team uniquely positioned to complete large-scale grid integrations with WePower platform.
- Industry Partnerships — energy powers nearly everything that we do and thus it cannot be experimented on without a direct support from the energy utilities and governments. Many digital innovators position themselves as a replacement for the current energy service providers and suppliers, do not treat carefully the security aspects that any energy system must solve extremely well. At WePower we work very carefully on partnerships with governments and utilities to deploy the best system possible. Our partnership and testing plans with Elering, the national transmission systems operator of Estonia, is a perfect example of how startups can cooperate with the current industry players to drive innovation at a very meaningful scale.
- Geography - digital technology in many cases holds very few geographical constraints. However, geography and country-level developments are very important to the energy sector. WePower is a European company, which provide us with a unique opportunity to be part of the major energy digitization initiative that is happening across the European Union as a part of the 2020 goals. Based on this directive every EU countries are obliged to implement nation-wide smart metering systems by 2020. This development will allow us to expand our service offering outside green energy financing very soon after the infrastructure developments are complete.
- Blockchain application — due to the actual current state of low digital maturity in the energy sector, many blockchain use cases which have been proposed are way ahead of their time and require substantial investment in digitizing energy infrastructure before delivering the value proposed. This is why WePower utilizes blockchain where it actually makes sense and the benefits over existing centralized solutions are substantial, such as power purchase agreements and transparent energy production accounting.
- Token model — last but not least, we should not forget that one of the most powerful offerings of blockchain technology and tokenization is an opportunity to create new incentivized economies. Many new blockchain projects within the energy industry and beyond use tokens to provide access to their ecosystems or distribute their profits to their contributors. At WePower we worked hard to develop a model that would tap directly into the energy ecosystem and provide right incentives to drive green energy adoption. WePower token economy really stands out as it serves both as a fundraising and energy investment instrument to the energy industry stakeholders as well as a priority pass to energy auctions, which will accumulate in value as the platform grows in size and profile of participants. Our token creates an opportunity for green energy as a whole to become a valuable asset class.
- and as the biggest threat to the smart energy industry?
With green energy coming closer and closer to being conventional in terms of economic viability, and with the general population becoming more aware of the environmental and economical issues caused by global warming, one would expect the movement towards greater sustainability to be speeding up. However, according to the International Energy Association (IEA), the reality is less promising.
In 2017, investments in renewable energy were down by 7% compared to the previous year, with a similar trend expected in 2018 as well. The most apparent sign of a shift is that for the first time since 2014 the scales have tilted towards fossil fuels in terms of new investments. After 170 countries signed the Paris climate agreement in 2015, it was widely understood that to reach the climate goals and keep the global temperature increase well below 2 degrees, investments in the fossil fuel industry must fall to 40% by 2030. Yet not only have we not moved closer to this, but last year we took a step backward, increasing the share of investments in fossil fuel-based energy to 59%.
In order to better understand the dynamics of energy market transition towards greater sustainability, key influencing factors need to be identified. Ever since the start of the global green movement, the driving factors behind this transition were governmental support, technological development, economics and the mindset and willingness of the consumer to support this transition without expecting an immediate gain. Each of these factors has roles of different importance at different stages of the transition. While economics is the key factor in almost all stages of the transition, others are indispensable as well.
- What are the key topics WePower will highlight at this year’s EUW?”
- An actual blockchain use-case in the energy sector;
- Empowering the energy buyers to have a say;
- Fundraising from alternative sources in a capital-intense industry.
Interested in hearing more from Nikolaj Martyniuk? Come by the Summit Energy Market session taking place in Lehar 3 & 4 on the 6 - November at 15:10 15:30 and listen to Nikolaj speaking about: “Operating between prosumers and flexibility users - The aggregator role"
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