Power Ledger Business Venture

Power Ledger Business Venture

 Background of Australian Power Ledger Company

Power ledger company is a speedily growing Australian Perth-based company that was founded back in August 2016 by the three entrepreneurs; Dr. Jemma Green, David Martin, and John Bullich. This company operates on a blockchain- cryptocurrency-based system, utilizing eco chain technology for the storage of its energy readings. Moreover, the company operates on an energy trading platform, allowing for the decentralization of the buying and selling of renewable energy (Cali &Fifield,2019). This platform enhances the accessibility of energy markets by its customers across the entire globe. The energy trading system is equally expected to be scalable with the varieties of energy infrastructures and regulations in the whole world..

The Australian Perth- based company assists households in doing energy transactions, investing in renewable energy, and trading in environmental products. The founders established this company after recognizing the fact that not all households in Australia can afford the installation of solar panels on their rooftops. Furthermore, the needy households are located amongst those who have electricity while equally considering the expensive deals by the electricity companies. The company has designed a software allowing trading of energy from peer to peer, from the solar panels on the rooftop, embarking on energy cost savings to them (Wu et al., 2019). Through the blockchain technology, the company has empowered electricity owning households to sell their surplus solar power from their rooftops to their neighbors.

Situational analysis

Its market works on the basis of a dual-token ecosystem, which functions on two types of blockchain layers, which include Sparkz and POWR token.POWR token, which is based on ERC-20 Ethereum, helps to enhance the accessibility of power ledger networks and the interfacing of the hosts and consumers supplying energy with the environment while protecting them through a type of technology known as  Smart Bond technology(Park et al. ,2019). The company had also projected increased future demand for the POWR tokens due to the expanded user base platform, which would result in changes in the price of tokens. As a result, they enhanced the conversion of the POWR tokens to Sparkz tokens. Sparkz token refers to the Ecochain coin, which is used for purchasing energy via an Ethereum smart contract or for non-frictional transactions in the market of energy exchange. By the beginning of this year, the company purchased a photovoltaic system that is worth 250 kilowatts, which will utilize a system of data management and settlement, based on blockchain technology (Kim et al. .2018).

The company is extremely committed to a world with clean, reliable, available, and affordable electricity for everyone. Through the maintenance of its focus on outstanding product offerings, the company has remained committed to its vision of a democratized system of energy (Ashley & Johnson,2018). Its software, which works in cooperation with the current infrastructure of energy systems, has equally enabled perfect control and ownership of both producers and consumers similarly). Moreover, the company’s technology provides an opportunity, benefiting both consumers and energy companies, thereby contributing to an affordable and clean energy system. This has enhanced both the competitive ability and attractive nature of the company to the external market.

Power Ledger Companys Business Model

The company has three major products on its platform, which include uGrid, Power Port, and xGrid. Other products found on the power ledger platform include Asset Germination Events and C6/C6+. These models are as described below:

xGrid

This is a significant feature used by the power ledger company. It is used where entities which produce surplus energy can sell them to others

uGrid

This is a client’s tool in the microgrid network, which enables the metering of low costly electricity, huge acquisition of data, faster micro-transactions, and the management of the microgrid.Moreover, it is an essential for network environments such as shopping centers, and apartment blocks as it assists in the management and monitoring of energy flows in their networks and the use of network at granular levels(Varnavskiy et al.,2018).

Power Port

This model is similar to uGrid except that it is designed particularly for electric vehicle charging stations as it allows secure and cheap electricity metering, payment at low cost and its integration with present protocols like Open Charge Point Protocol (OCPP)(Varnavskiy et al.,2018).

C6/C6+

This is a blockchain-driven model which reports and records certificates and carbon credits

Asset Germination Events

This model helps by empowering communities for the monetization of co-owned energy assets like wind turbines and solar panels. This model eases the co-investing of individuals in renewable energy assets. This ledger model is expected to be the most superior mechanism that can be used to assess both ownership and revenue shares for these kinds of projects. (Varnavskiy et al.,2018).

Power ledger platform

This is a layer allowed to through the Application host for permeation of network via which all on the network can use the platform

Application Host

This is the energy provider in charge of controlling the distribution infrastructure and supply of power to the grid where the particular platform operates. (Varnavskiy et al.,2018).

Smart meter

This electronic device records the consumption of electricity and communicates back the data to suppliers for operations like billing and monitoring

Challenges Facing Power Ledger Company

Difficulty in market adaptability

 First and foremost, the companies two- people Melbourne office faced closure by the beginning of 2019 as it was proving to be a tough sell on the process of applying blockchains to energy markets (Diestemeier,2017). It was shut to help conserve resources and maintain company focus to markets that have the potential to deliver quickly like Japan and Thailand. This led to the redundancy of one member of the staff as the other one was made an ambassador

Cryptocurrency regulations by financial committees.

Secondly, the Australian Securities and Investments Commission has launched a crackdown on the Initial Coin Offerings (ICOs) since the mid of 2017.ASIC further classifies ICOS as a very risky and highly speculative investment. Even though ASIC has not succeeded in banning ICOs, it has ensured very tight regulations (Lai,2019). The Co-founder of the company, Dr. Jemma Green, solved this problem by requesting for more considerations by the financial technology committee in allowing for the continued operations of ICOs in Australia, which heeded to its plea.

Skepticism by some citizens

Thirdly, the company has been faced with the challenge of Blockchain technology underpinning cryptocurrencies such as Ethereum and Bitcoin markets whose ups and downs have led to the rise and fall in the company’s market capitalization. (Andoni et al. ,2019). This has resulted in fueling up of skepticism from various people in some countries, thereby discouraging them from investing in the business venture. The director has, however, maintained that despite these ups and downs in the cryptocurrencies, blockchain technology remains promising in providing benefits to the complicated energy market. Cash retained by the company has been enough to promote the company to commercialization maintained.

Anomalies in the tax system

Lastly, Green confirms the reality of anomalies in the Australian tax system. This is evident from the fact that the ICOs proceeds within the legacy taxation systems have been considered as income. She has proposed that this problem can be solved by putting the ICOs on capital accounts, which is shifting the taxing points to situations where proceeds can build platforms for generating income, the way Switzerland has done. Another problem is that it is quite challenging to manage and store energy. Moreover, it is quite lengthy for the market to speed up with the proposition. This can be solved by the adoption of blockchain technology (Andoni et al. ,2019).

Lessons learned from the business venture.

First, businesses should adopt the current blockchain technology in their operations as this has escalated the dreams of this company to high levels. Complex companies are more suited to this type of technology, as it is more cost-effective.

Secondly, businesses should remain steadfast to their healthy innovative ideas despite the strict regulations that can be imposed by the government, as long as they are sure of the profitable result of their business to them and the entire country. This is shown by the efforts of Power ledger chairman Green to fight for the operations of ICOs in Australia, after knowing the benefits that it could bring, despite the governmental regulations.

The third lesson is that businesses of this type, starting up their ventures, should ensure that tax regulations around cryptocurrencies such as ICOs are deemed fit for purpose. This will ensure their profitability and smooth operations with the financial bodies of the government. Evidence of this is seen by the severe fight that the power ledger founder put into ensuring ICO operation.

Lastly, business ventures of the day can learn by developing innovative ideas from simple societal gaps, just from their immediate neighborhood, with the spirit of moving together in development initiatives. This is seen by the way this company established solar panels to its needy customers from their immediate neighborhoods.

References

Cali, U., & Fifield, A. (2019). Towards the decentralized revolution in energy systems using blockchain technology. International Journal of Smart Grid and Clean Energy, 8(3), 245-256

Lai, D. (2019). Should Cryptocurrencies and Initial Coin Offerings (ICOs) be Regulated under Australian Financial Services Laws?, 5 J. Marshall Global Mkt. LJ 27, (2019). John Marshall Global Markets Law Journal, 5(1), 2)

Kim, G., Park, J., & Ryou, J. (2018, January). A study on the utilization of blockchain for electricity trading in microgrid. In 2018 IEEE International Conference on Big Data and Smart Computing (BigComp) (pp. 743-746). IEEE.()

Flood, J., & Robb, L. (2017). Trust, anarcho-capitalism, blockchain and initial coin offerings. Griffith University Law School Research Paper, (17-23)

Andoni, M., Robu, V., Flynn, D., Abram, S., Geach, D., Jenkins, D., … & Peacock, A. (2019). Blockchain technology in the energy sector: A systematic review of challenges and opportunities. Renewable and Sustainable Energy Reviews, 100, 143-174

Varnavskiy, A., Gruzina, U., Rot, A., Trubnikov, V., Buryakova, A., & Sebechenko, E. (2018). Design of models for the tokenization of the electric power industry basing on blockchain technology. Annals of Computer Science and Information Systems, 17

Park, C. H., Barlongo, I. M., & Kim, Y. (2019, October). A Market Place Solution for Energy Transaction on Ethereum Blockchain. In 2019 IEEE 10th Annual Information Technology, Electronics and Mobile Communication Conference (IEMCON) (pp. 1-5). IEEE)

Diestelmeier, L. (2017, May). Regulating for blockchain technology in the electricity sector: Sharing electricity and opening Pandora’s box?. In Proc. Sci. Technol. Soci. Stud. (pp. 1-15)

Wu, W., Quezada, G., Schleiger, E., Bratanova, A., Graham, P., & Spak, B. (2019). The future of peer-to-peer trading of distributed renewable energy)

Gardner, J. E. (2019). Peer-to-Peer Energy Trading and Blockchain: The Future of Distributed Energy Resources. Natural Resources & Environment, 33(4), 8-11

Ashley, M. J., & Johnson, M. S. (2018). Establishing a secure, transparent, and autonomous blockchain of custody for renewable energy credits and carbon credits. IEEE Engineering Management Review, 46(4), 100-102