BLOCKCHAIN-ENABLED PEER-TO-PEER TRADINGTECHNOLOGY AND MARKET DISRUPTION IN THE ENERGY INDUSTRY

AEMO FORECASTS FOR SWIS

From AEMO’s ESOO 2016

AEMO FORECASTS FOR SWIS

From AEMO’s ESOO 2016

DISRUPTION

THE FACE OF ENERGY IS RAPIDLY CHANGING: SOLAR WILL SOON DOMINATE GLOBALLY

GLOBAL COMPARISON

Bloomberg New Energy Finance

UPTAKE OF ROOF-TOP PV IN THE SWIS

From AEMO’s ESOO 2016 (p30)

ELECTRICITY PRICE GROWTH EXPONENTIAL TO CPI

Source: Green, Newman & ABS

SOLAR ON AUSTRALIAN HOMES

EVERY TIME THE WORLD’S SOLAR PANEL OUTPUT DOUBLES THE COST OF PANELS FALLS 26%

Bloomberg New Energy Finance

BATTERY PRICES FALLING

Tesla Powerwall

Source, Green, Newman & BNEF

BATTERY PRICES FALLING AT SAME RATE AS PV

Bloomberg New Energy Finance

SYNERGY A1 VS. PV + LIFEP04 BATTERIES

Green and Newman, 2016

LOAD DEFECTION: SOLAR AND BATTERIES

45% load defection 97% load defection

AEMO FORECASTS FOR SWIS

• AEMO has included forecasts of uptake of batteries in

latest ESOO

• Early days for these types of forecasts – uptake could

be significantly different depending on actual learning

curve and how that applies to future prices

• Assumed 90% cycling efficiency, 1 cycle per day to

produce forecast additional displaced energy by

batteries

• Assumed existing PV systems self consume 50% and

export remainder

• Existing PV already displacing about 400 GWh per

year (gross production in excess of 800 GWh)

• Compares to SWIS total load of about 18,000 GWh

IMPACT ON NETWORK UTILISATION

• Additional displaced network energy

represents 8% - 16% of energy

currently served to small business and

residential customers (RT1 – RT4 tariffs).

• This group accounts for $1,104 million

of network revenue for 2016/17 (out

of a total of $1,520 million)

• Assuming current tariff structure

retained, revenue leakage would be

$54 - $112 million

• Alternatively, variable network tariff

would increase 10 – 22%, or up to

2c/kWh to compensate

BUT CAN WE HAVE DISRUPTION WITHOUT VALUE DESTRUCTION?

COMPETITION FOR CONSUMPTION

ELECTRICITY NETWORKS ARE IN COMPETITION WITH B-T-M ENERGY STORAGE FOR EXCESS DISTRIBUTED RENEWABLE GENERATION

• Currently, generation in excess of a consumer’s demand is spilled into the network limiting the load

defection impact of roof-top solar PV.

• When B-T-M energy storage becomes an economically feasible and trusted alternative to spilling

energy, material load defection will put upward pressure on network tariffs.

• Networks need to develop an alternative to forestall consumer load defection and importantly;

retailers need networks to develop an alternative to forestall consumer load defection.

BLOCKCHAIN-ENABLED PEER-TO-PEER ENERGY TRADING

POSITIONS CONSUMERS AT THE CENTRE OF AN INTEGRATED

ENERGY SYSTEM

BUT WHAT IS A BLOCKCHAIN?

POWER LEDGER ALLOWS FOR EACH UNIT OF ELECTRICITY TO BE TRACKED FROM THE POINT OF GENERATION TO THE POINT OF CONSUMPTION

• Blockchain technology - a transparent, auditable and automated market trading and clearing

mechanism for the sale of surplus renewable energy.

• Power Ledger’s unique Eco-chain allows for each unit of electricity to be tracked from the point of

generation to the point of consumption.

• Our blockchain provides the ability for energy consumers to participate in a new-energy marketplace,

even those who cannot afford expensive upfront commitments in renewable energy generating

capacity.

PROVING THE TECHNOLOGY AND UNDERSTANDING THE IMPACT

• We’re hashing solar-powered block

chains as we speak.

• House in Perth already live on the

new Australian EcoChain Blockchain

commissioned for Power Ledger, since

mid August.

• Need to achieve the assurances

required by retailers, DNSPs,

regulators and consumers.

PROVING THE TECHNOLOGY AND UNDERSTANDING THE IMPACT

• Technology, testing and proofing will be undertaken at a group residential site south of Perth.

This is expected to occur in the second quarter of the 16/17 financial year. An MoU has been

agreed with the management of the premises and tenants.

• Primary test deployment is planned to involve four multi-unit residential developments at White

Gum Valley in the second and third quarters of the 16/17 Financial Year and remain in service

on a non-commercial trial basis for four years.

• The secondary trial deployment, a limited commercial pilot, will occur in the first quarter of the

17/18 financial year and extend for a two-year period. MoU with the property developer is in

place and Letters of Intent have been exchanged with the DNSP.

THE ECOCHAIN BLOCKCHAIN

• EcoChain - State of the Art and developed in Australia by Ledger Assets Pty Ltd, also Perth

based.

• EcoChain uses only a fraction of the electricity used by Bitcoin’s Blockchain thanks to its Proof of

Stake (PoS) mining protocol.

• EcoChain uses Ledger’s “tangling” technology– real time communications occur with the Bitcoin

Blockchain (the 2 are tangled) where EcoChain uses the Bitcoin Blockchain for enhanced

integrity. This give EcoChain massive integrity even when it is still small.

• EcoChain also uses Ledger’s “snapshoting” technology to allow data scaling.

POWER LEDGER PLANS

• Complete Trials and launch commercial deployment.

• Working with Synergy and private power generators/energy services companies for smooth

technology acceptance.

• Developing patents

NEXT…

• Partner with likeminded complimentary companies and investors post the first trial.

• Expand in the Asia Pacific and Globally

• Expand our product range.

KEY TAKEAWAYS

• Blockchain-based peer-to-peer trading can facilitate an alternative to

behind-the-meter energy storage.

• Blockchain-based peer-to-peer trading can help maintain the value of

network assets by maintaining network utilisation.

• Innovation that maintains the value (to the extent possible) of existing network

assets allows for the broadest societal benefit from DER and reduces the risk

of power poverty…

QUESTIONS?