Microgrid as a Service (MaaS) and the Blockchain

It is a splendid event to observe when two new technologies combine to create a new marketplace. In recent years as new sources of distributed energy have been entering the electrical grid to provide power they are necessitating a change to the existing large-scale infrastructure model of power supply.

Classic Electric Power Grid Model

Figure 1. Classic electric power grid model with bulk generators transferring power long distances to reach the consumer.  Image courtesy of NetGain Energy Advisors. (1)

The old model utility was large and centralized and tracking transactions was simple as consumers were on one side of the ledger, while the provider as on the other. And whereby currency and energy flowed only in opposite directions between two identified parties, consumer and provider.

In the emerging markets of small-scale independent energy providers, we can see buildings, communities and even individual residences having built capacity to provide intermittently or on demand power at times, and consume or store power from the grid at other times. Solar power is only available during the day, and will require new commercial methods of energy storage.

How-Microgrids-Work

Figure 2. An example Microgrid (2)

In the transition from decentralized utility is the development of the Micro-grid.  The Micro-grid offers many benefits to society, including; (a) use of renewable energy sources that reduce or eliminate the production of GHG’s, (b) increases in energy efficiency of energy transmission due to shortening of transmission distances and infrastructure, (c) improved municipal resilience against disaster and power reductions, and finally, (d) promotion of economic activity that improves universal standard of living.

As buildings and communities evolve they are moving toward renewable energy sources to supplement their energy requirements and reduce operating costs. Even the building codes are getting into the act, requiring buildings be constructed to new energy efficiency standards. Also, we are seeing the development of new technologies and business methods, such as solar powered charging stations for electric vehicles.

The existing electrical grid and utility model has to develop and adapt to these new technologies and means of locally generating power. The future will include the development and incorporation of peer to peer networks and alternative energy supply methods. Consumers may purchase power from multiple sources, and produce power and supply it to other users via the electrical grid.

Micro-grid and the Blockchain

As new energy sources/providers emerge there is added complexity to the network. Consumers of power can also be an energy providers, as well as having different energy sources available. This increased functionality raises the complexity of possible transactions in the network.

Imagine a financial ledger, where each user in the system is no longer constrained to be a consumer, but also a supplier to other users in the system. In order to track both the credits and debits it has been proposed that the exchange of blockchain tokens be utilized to sort out complicated energy transfer transactions in a distributed P2P network.

P2P TRADING

This class of Platform Application gives retailers the ability to empower consumers (or in an unregulated environment, the consumers themselves) to simply trade electricity with one another and receive payment in real-time from an automated and trustless reconciliation and settlement system. There are many other immediate benefits such as being able to select a clean energy source, trade with neighbors, receive more money for excess power, benefit from transparency of all your trades on a blockchain and very low-cost settlement costs all leading to lower power bills and improved returns for investments in distributed renewables. (3)

One blockchain based energy token that has caught my attention is called POWR and is currently in pre-ICO sales of the tokens by the Australian platform Power Ledger. One of the uses of the platform that is being suggested is peer to peer trading.

 “We are absolutely thrilled with the results of the public presale,” says Dr Jemma Green, co-founder and chair of Power Ledger. “Selling out in just over 3 days is a very strong performance in line with global ICO standards, which speaks to the strong levels of interest from consumer and institutional buyers.”

The proceeds from the total pre sale were AU$17 million and the main sale on Friday offers approximately 150 million POWR tokens (subject to final confirmation before the sale opens) in an uncapped sale, meaning that the level of market demand will have set the final token price at the end of the sale. (4)

 

References

  1. The Changing Power Landscape
  2. Siemens – Microgrid Solutions
  3. Power Ledger Applications
  4. PRESS RELEASE Having Closed $17M In Their Presale ICO, Power Ledger Confirm Their Public Sale Will Commence on 8th September 2017
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An Engineering Blockchain Cryptocurrency

The revolutionary aspect of the blockchain is starting serious discussions in the Professional Engineering community. Indications are that there are some fundamental problems in Engineering may be solved by the issuance of a token, in this case called Quant (1) and is currently in the “sand-box” phase of development.

The plan, in part, involves mining Quant to create a public key, or data-base called Engipedia.  There is also a “proof-of-stake” (2) aspect, which forms an engineer’s private key summarizing by algorithm the engineer’s personal data such as education, qualifications, projects, and other contributions or related works.

The Quant token, which is proposed to have inherent smart contract capabilities will be mined by engineers in a variety of ways, most of which are intended to establish an expanding  knowledge base, one such enterprise is called Engipedia. This is a knowledge base which has a formidable upside for democratic technological advancement and dissemination of workable knowledge worldwide.

As a virtual currency, the Quant token may provide a necessary bridge to financing that was previously inaccessible to engineers. Often pools of capital are controlled by vested interests or politically minded parties. Economic opportunities, which previously were unavailable due to lack of funding, may now have a financial vehicle for entrepreneurial Engineers.

The Design is the Contract

Engineering is different than finance and insurance. Finance and Insurance merely need to represent a physical object in a party / counter-party transaction script.  There is no design involved. Engineering represents a physical object – the engineering design and specification IS the smart contract. Then, what happens in construction, operations, maintenance, renovation, and replacement is far too complex to be scripted in a single smart contract. Engineering outcomes involve enormous mass, forces, and real-life consequences. (3)

References:

  1. The Market for QUANT
  2. QUANT Proof of Stake
  3. A Warning to Engineering Firms Concerning Blockchain Technology

UK Green Investment Bank Raises £463m on its planned £1bn Offshore Wind Farm Fund

The UK Green Investment Bank plc (GIB) has announced that its FCA regulated subsidiary, UK Green Investment Bank Financial Services Limited (GIBFS), has reached first close on commitments of £463m on its planned £1bn fund to invest in operating offshore wind farms in the UK.

Source: www.greeninvestmentbank.com

>” […] £463m of capital raised at first close, to be invested in UK offshore wind projects.Investors include UK pension funds and a sovereign wealth fund.Innovative transaction creating the world’s first dedicated offshore wind fund.This is the first fund raised by the GIB group, a first move into asset management and the first time it has managed private capital since its formation.This announcement marks the end of GIB’s financial year. It committed £723m to 22 green energy projects across the UK in 2014/15. GIB has now backed 46 UK projects with a total value of almost £7bn.

The UK Green Investment Bank plc (GIB) has announced that its FCA regulated subsidiary, UK Green Investment Bank Financial Services Limited (GIBFS), has reached first close on commitments of £463m on its planned £1bn fund to invest in operating offshore wind farms in the UK.

First close marks the completion of the first stage of fundraising and is triggered by the commitment of an initial group of investors.

The initial investors comprise UK-based pension funds and a major sovereign wealth fund. GIB is also investing £200m in the fund. Fundraising continues and GIBFS expects to raise additional funds from other investors to reach the £1bn target.

In addition to the £463m of fund commitments raised, an additional significant amount of investor capital is available to co-invest into projects alongside the fund.

The fund is an innovative, first-of-a-kind transaction. It is the world’s first fund dedicated to investments in offshore wind power generation and, once fully subscribed, will be the largest renewables fund in the UK. The fund has an expected life of 25 years, allowing a new class of long-term investor to enter the sector.

This is the first fund raised by the GIB group and its first step into asset management. It is also the first private capital to be managed by the GIB group. It will be managed by a new FCA-regulated and authorised subsidiary called UK Green Investment Bank Financial Services Limited which is staffed by a dedicated team.

GIB has now transferred its investments in two operating assets into the fund, which will produce immediate cash yield for investors. They include:

Rhyl Flats. A 90 MW, 25 turbine wind farm operated by RWE Innogy UK off the coast of North Wales. It has been operational since December 2009. GIB has sold its full 24.95% equity stake in the project to the Fund.Sheringham Shoal. A 317 MW, 88 turbine wind farm operated by Statkraft and located in the Greater Wash area off the coast of Norfolk. It has been operational since October 2012. GIB has sold its full 20% equity stake in the project to the fund.

These two offshore wind farms are able to produce 1,290 GWh of renewable energy annually, enough to power 305,000 UK homes. The fund also has a strong pipeline of future investment opportunities.

Evercore Private Funds Group is acting as advisor and exclusive global placement agent for the fundraise and King & Wood Mallesons is acting as legal counsel to the fund. […]”<

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SEC Rule Changes – Small Businesses Get Funding Cap Raise to $50 Million

Nearly three years after the law was signed, the Securities and Exchange Commission has taken an important step toward implementing the so-called JOBS Act, making it easier for small and mid-sized businesses to raise capital through small public offerings.

Source: www.washingtonpost.com

>” […] Commissioners on Wednesday approved rule changes that allow companies to raise up to $50 million a year, up from a longstanding cap of $5 million, through what’s known as Regulation A offerings. Under Reg A offerings, as they’re commonly called, companies looking to raise relatively small amounts of money through a public offering are subject to a much simpler SEC registration process, putting fewer bureaucratic hoops between them and investors.

Until now, the Reg A path, which is nearly as old as the SEC itself, has been sparingly used. Congress voted to lift the cap as part of the Jumpstart Our Business Startups (JOBS) Act, which was signed into law in April 2012, largely to encourage more small and mid-sized companies to consider that option. […]

The finalization of the rules was the latest step in what has become an exceptionally long process to breathe life into the JOBS Act. Now on the cusp of its third birthday, only about half of the provisions in the statute – which, by providing better access to capital to new and growing businesses, was touted as a potentially powerful gust of wind in the economy’s sails – have been put in place by the SEC.

Among the most highly anticipated changes mandated by Congress but not yet implemented by the SEC are rules allowing companies to raise small amounts of money from mom-and-pop investors via what are known as online crowdfunding portals. Initially, the SEC was to give that process the green light by the end of 2013; however, the agency has been slow to move on the rule-making process. The SEC put forth proposed rules in October 2013, but it isn’t clear when they will be finalized.

While the crowdfunding rules, which are outlined in Title III of the JOBS Act, have drawn most of the JOBS Act’s spotlight, Paul explained that the Reg A changes (contained in Title IV of the legislation) will likely have a much more significant impact for certain companies.

“With Reg A, we’re talking about businesses that are going to be much further along in their life cycle than the ones that would benefit from Title III,” Paul said, noting that the online crowdfunding rules will limit entrepreneurs to raising no more than $1 million from non-accredited investors. “Obviously, a company raising $1 million is in a very different place than a company raising $40 million, or even $10 million.”

“It’s all part of a continuum,” Paul added. “While crowdfunding will be important for getting capital to genuine start-ups – ones that have three people working for them – this will help those that have 300 people working for them and are still looking to grow.” […]”<

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Leaked HSBC Files from Swiss Bank lead to Tax Evasion and Money Laundering charges

Data in massive cache of leaked secret bank account files lift lid on questionable practices at subsidiary of one of world’s biggest financial institutions

Source: www.theguardian.com

Video:  Guardian explains case against HSBC

>”[…]  The Guardian’s evidence of a pattern of misconduct at HSBC in Switzerland is supported by the outcome of recent court cases in the US and Europe. The bank was named in the US as a co-conspirator for handing over “bricks” of $100,000 a time to American surgeon Andrew Silva in Geneva, so that he could illegally post cash back to the US.

Another US client, Sanjay Sethi, pleaded guilty in 2013 to cheating the US tax authorities. He was one of a group of convicted HSBC clients. The prosecution said an HSBC banker promised “the undeclared account would allow [his] assets to grow tax-free, and bank secrecy laws in Switzerland would allow Sethi to conceal the existence of the account”.

In France, an HSBC manager, Nessim el-Maleh, was able to run a cash pipeline in which plastic bags full of currency from the sale of marijuana to immigrants in the Paris suburbs were collected. The cash was then taken round to HSBC’s respectable clients in the French capital. Bank accounts back in Switzerland were manipulated to reimburse the drug dealers.

HSBC is already facing criminal investigations and charges in France, Belgium, the US and Argentina as a result of the leak of the files, but no legal action has been taken against it in Britain.

Former tax inspector Richard Brooks tells BBC Panorama in a programme to be aired on Monday night: “I think they were a tax avoidance and tax evasion service. I think that’s what they were offering.

“There are very few reasons to have an offshore bank account, apart from just saving tax. There are some people who can use an … account to avoid tax legally. For others it’s just a way to keep money secret.”

The Labour party said: “Tax avoidance and evasion harms every taxpayer in Britain, and undermines public services like the NHS. What is truly shocking is that HMRC were made fully aware of these practices back in 2010 but since then very little has been done.””<

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