The rules of the trading game

Figure 1. A trial between Power Ledger and BCPG in Bangkok’s T77 precinct marked a first for P2P energy trading in Asia.

Blockchain technology, with baked-in provenance, security, tradability, and real-time payments, intends to help make RECs a vibrant, attractive investment opportunity instead of the slow, complex instrument they are now.

Automation will replace the current cumbersome process of paperwork and reporting to prove that assets and people have sold a certain amount of clean energy.

Automation will also support existing compliance processes, ensuring that RECs cannot be resold after they have been retired or that the same REC cannot be sold twice. More importantly for asset owners, minting tokenised RECs in real-time using data provided by smart meters will also ensure that money is not being left on the table – that is, enough RECs are being claimed by the clean energy generator.

Everyone loves getting paid in real-time. Imagine a co-op wind farm selling energy and generating micro-RECs in the process. As these micro-RECs are tokenised and deposited into the co-op blockchain wallet, they can immediately be put on the token market to trade 24/7 and begin generating continuous income – another benefit for renewable energy developers.

The immediacy of payment alone can incentivise more people to invest in renewables. Picture entire communities with household solar participating in a REC market; not a separate scheme for small installations and another scheme for large renewable assets, but the creation of a single, unified scheme for large and small solar farms alike.

It is about creating an auditable, transparent marketplace connecting buyers and sellers.

Or perhaps some intermediaries, such as REC aggregators that represent both buyers and sellers, will continue to be involved. The automation of their current processes will free them up to provide a premium service to large buyers and sellers, much like the services stockbrokers provide to wealthy individuals who prefer not to place their own buy-and-sell trades and instead trade via a trusted intermediary.

In any case, a marketplace for tokenised RECs serves both sides of the market – those who want to place their own buyand-sell orders and those who want to on-board their existing buyers and sellers and offer a premium aggregator service.

So, what is holding up this RECs trading Utopia?

Currently, renewable assets must engage an aggregator to handle the entire process of REC sales, though it is the asset owner’s responsibility to ensure all eligibility criteria are met.

While this system works, it is slow, clunky, and has multiple layers of complexity that must be navigated to get to the point of sale.

On the supply side, renewable energy assets face a complex compliance battle, only to then wait months to get paid for the RECs they sold.

On the demand side, REC buyers say the complexities of the system restrict supply, driving up prices and discouraging them from seeking green alternatives.

Both sides complain that the REC purchase process is opaque, prices are unpredictable, and the cost of transacting between buyers and sellers is high. Crucially, cumbersome transacting is a problem worth solving. In the US alone, the REC market is estimated to be worth billions of dollars and growing, which means it is an attractive market for new entrants – provided the cost of compliance Figure 2. Making fossil fuel consumers and producers purchase RECs has does not outweigh the benefits. helped fuel the growth of the renewable energy sector.

The groundwork, however, is already being laid. In January, Power Ledger – a transactive energy company enabled by blockchain – partnered with the Midwest Renewable Energy Tracking System (M-RETS) to launch an REC marketplace in the US. M-RETS tracks generation from renewable resources across all of North America, serving as a trusted centralised gateway to compliance and voluntary environmental markets to make it easier to track RECs through one system.

The partnership with Clearway – a renewable energy developer, owner, and operator – to develop a platform to trade RECs in the US, means buying and selling renewable energy will be streamlined through a real-time online marketplace.

Crucially, trading through a blockchain-enabled platform means the costs associated with buying and Figure 3. Some investors view RECs as a stake in a renewable energy source, selling RECs within M-RETS are reduced. This could be a such as a wind farm. game-changer for M-RETS, which is coping with increasing demand for RECs; the registry is now processing upward of 100 million certificates annually. The Southeast Asian model will be largely informed by best

More broadly, this highlights the potential of blockchain practice in the North American REC market – demonstrating technology for renewable energy trading in the US, where in at how one region can fast-track an energy trading regime if it least 29 states, electricity companies are required to supply a adopts systems that have proven to work elsewhere. portion of their electricity from renewable sources each year. These projects have shown how an REC marketplace

It also shows the importance of government policy in bridges the gap between buyers and sellers by providing an driving growth in renewable energy and learning from other end-to-end solution that tracks REC generation, trading and cases. For example, in Southeast Asia, the future of energy retirement, through one integrated online system. trading is also being determined through a landmark project to create the first REC marketplace in the region. The future of RECs

The Thai Digital Energy Development (TDED), together The future of the renewable energy sector will be defined with Power Ledger, are developing a blockchain-based REC by reliable, financially viable power projects supported by marketplace in Thailand, which aims to generate 25% of its consumers. RECs are a vital part of creating this strong electricity from renewable energy sources by 2037. future, encouraging investment in green energy projects

The collaboration will see the application of blockchain while providing a financial incentive to switch to renewables. technology at three BCPG Group clean power projects, which However, unless digital technology like blockchain is have been included in a ‘Sandbox Project’ by Thailand’s Office embedded in the market, the growth of RECs will continue to of Energy Regulatory Commission. be choked by inefficiencies.

One of the first projects will focus on energy and REC Now, back to those orange trees – if we cannot even management at the 12 MWh Smart Campus at Chiang Mai estimate our orange juice supply correctly, what hope do we University in northern Thailand, with the aim of facilitating have of accurately estimating how many megawatt-hours of further projects throughout the region. clean energy we are generating, buying and selling?

Ramnik Singh, USA, and Thomas Raiser, Switzerl solutions to produce biofuels and bioene

This is a particularly dynamic time for the biofuel and bioenergy sector, as innovative technologies are enabling the use of an ever-growing number of renewable feedstocks. Businesses interested in maximising the benefits of these new opportunities need to select reliable, high-performance separation equipment to optimise their productivity.

The advances in processing technology are revealing how biofuels can increasingly be used to support everyday life. It is thanks to these innovations that countries and businesses are able to adopt bio-economic strategies for manufacturing and energy production. In fact, businesses can utilise an

and, Sulzer, look at some of the most effective ergy and the technologies behind them.

increasing range of renewable resources, byproducts, and waste from different industries to generate power with a lower environmental impact as well as generate additional revenue streams.

Where it all started

The agricultural sector was one of the first to benefit from the production of biofuels. Agrofuels utilise biomass that is usually edible, such as starch-rich or sucrose-rich agricultural crops for bioethanol and oilseed plants for biodiesel. To obtain biodiesel, the plant-based material undergoes transesterification,