Distributed Energy Resources

Blockchain REC trading platform set to launch in the U.S.

Power Ledger, in conjunction with Midwest Renewable Energy Tracking System (M-RETS) and Clearway Energy Group, plans to launch a Renewable Energy Certificate (REC) marketplace in the United States.

M-RETS already has a web-based software platform that tracks RECs in North America, but it does not engage in buying or selling RECs. Partnering with Power Ledger would expand the capabilities of that platform by enabling participants to buy and sell RECs through an integrated online marketplace.

Power Ledger plans to use blockchain technology for the buying and selling functions on the REC platform. M-RETS does not and would not use blockchain to track RECs.

Blockchain is a form of digital ledger that securely encrypts data such as prices and contract details. It is perhaps best known as the technology behind crypto currencies such as Bitcoin, but it is also being put to use in other industries, from manufacturing and banking to energy and retail.

Power Ledger says the deal is the first phase of its partnership with Clearway Energy to develop a platform to trade RECs in the US. The Australian company first announced the partnership last summer. At the time Jemma Green, executive chairman and co-founder of Power Ledger, called the agreement “an exclusive partnership to tailor the platform for the U.S. context.”

“M-RETS’ partners were seeking a mechanism to support the transactional process associated with REC marketing and settlement,” Benjamin Gerber, executive director at M-RETS, said in a statement.

Participants in M-RETS registry often ask where they can buy and sell RECs, Gerber explained. They also say that the transaction costs of buying and selling RECs can be prohibitive, especially for smaller owners of renewable energy projects. Because it can eliminate intermediaries, blockchain technology holds the promise of lowering transaction costs. The estimated value of the voluntary and compliance market for RECs in the US is about $3 billion annually.

“We believe having a third party such as Power Ledger supporting the transactional process while utilizing the core M-RETS platform to track issuance, transactions, and retirements is another key step in modernizing the world’s renewable energy marketplace,” Gerber said.

Power Ledger is targeting mid-2020 for the initial launch of its REC trading platform. At first the focus will be on asset developers and utilities purchasing RECs to comply with renewable portfolio standards. Ultimately the aim is to be able to allow businesses and consumers to use the platform, a Power Ledger spokeswoman said via email. The company would also “consider any expressions of interest to join as an early access user.”

While the Power Ledger platform in the US is being developed with Clearway Energy, it will eventually be owned and operated by a consortium of market participants.

Commercial terms of the partnership have not been made public.

Public power and blockchain

Several public power utilities are exploring blockchain technology.

A Sacramento Municipal Utility District project that is being funded in part through an award from the American Public Power Association’s Demonstration of Energy & Efficiency Development program will utilize blockchain-enabled tokens as part of an effort to encourage EV owners to charge their vehicles at workplaces when local renewables peak during the day.

In 2018, the Burlington Electric Department in Vermont won a grant from the DEED program to use blockchain technology to facilitate the integration and distribution of energy from multiple sources in real time. Omega Grid is also involved in this DEED-funded project.

Meanwhile, another California public power utility, Silicon Valley Power, and Power Ledger have successfully completed the first stage of a program to test the use of blockchain technology for tracking and monetizing carbon dioxide reduction credits for electric vehicle charging and now plan to proceed to the second phase of the project.

In 2018, Silicon Valley Power used Power Ledger’s blockchain-backed platform to track and manage Low Carbon Fuel Standard (LCFS) credits at the Tasman Drive parking garage in Santa Clara, Calif., which has a 370 kW solar system and 49 electric vehicle charging stations.