Martin Lim, COO and co-founder of Electrify, highlights how decentralised energy can contribute to smarter cities.
Electrify launched in March 2017 as the first retail electricity marketplace in Southeast Asia, aiming to address the need for transparency and security in the energy market.
SmartCitiesWorld talked to Martin Lim, COO and co-founder of Electrify, about how decentralised energy can contribute to smarter cities.
SCW: How did the idea for Electrify come about?
ML: During his time studying in Europe and working in the energy industry, Julius Tan, our CEO, was increasingly confronted with the realisation that electricity markets in Asia were not digitised, leading to a lack of information for energy consumers.
We decided to launch Southeast Asia’s first electricity marketplace, and the rest is history.
SCW: Electrify launched just last year. What have been the major milestones so far?
ML: To date, we have transacted more than 60GWh of electricity through Electrify’s cloud-based platform, Marketplace, working with local businesses to find the best electricity retailer that suits their needs. This represents a Gross Merchandise Volume (GMV) of over S$10 million (£5.5 million).
In the second half of 2017, we started scoping growth plans and a radical upgrade of our platform through the use of blockchain. We embarked on an ambitious project to take complex electricity contracts and execute them on the Ethereum blockchain through the use of smart contracts, on a framework called Marketplace 2.0.
Subsequently, we designed a scalable peer-to-peer (P2P) energy trading platform called Synergy that would operate across a nationwide main grid enabled by our own IoT infrastructure, the PowerPod.
We launched an ICO to fund this endeavour. It was one of the most successful fundraisers in Singapore to date. On February 23, 2018, we held our token crowdsale, and successfully closed it within 10 hours.
In May 2018, we produced our first minimum viable product (MVP) of the PowerPod IoT framework, with a functioning sensor hub and data-visualisation dashboard.
SCW: How does the trading platform work?
ML: Synergy is our peer-to-peer trading and settlement platform, on which big energy producers and small-scale prosumers (those who produce and consume) can transact with consumers who are looking to buy electricity from sellers other than incumbent providers.
At present, prosumers who generate excess electricity — whether through rooftop solar PV systems or small-scale wind turbines — have to sell that electricity back into the grid, often at prices that are not ideal or cost-effective.
Our blockchain-based platform will allow them to set prices more fairly and execute trades directly with consumers via smart contracts. Transactions are stored immutably and transparently on the blockchain.
Smart contracts could provide someone interested in buying only clean energy with the guarantee that their electricity is coming from solar, wind or another renewable source.
Consumers are in turn presented with a greater selection of energy options as well as complete certainty of the sources of those options. For example, smart contracts could provide someone interested in buying only clean energy with the guarantee that their electricity is coming from solar, wind or another renewable source.
SCW: Why is blockchain an important aspect of the platform?
ML: Blockchain technology can help overcome barriers to clean energy presented by a centralised grid infrastructure.
In a centralised infrastructure, there is no framework for a reliable peer-to-peer trading platform, making it difficult for renewable generator owners to buy or sell power. Blockchain provides this peer-to-peer framework, opening up marketplace options for renewable asset owners.
Blockchain also ensures transparency in electricity contracts, providing clarity about retail energy prices, the sources of the energy and the carbon footprint.
SCW: What stage do you think we’re at with using energy resources more efficiently for smarter cities? How does Electrify help with the shift towards smarter cities?
ML: Energy blockchain applications have been limited by electricity market regulation and policy and have only been able to succeed at a relatively small scale. In deregulated markets, blockchain can power energy transactions across an entire city.
Blockchain-powered marketplaces allow for decentralisation of the electricity grid, enabling individuals to buy and sell without an intermediary.
SCW: But doesn’t blockchain technology itself also use a lot of energy? How are you balancing this?
Blockchain’s Proof of Work consensus mechanism, i.e. mining with a graphics processing unit (GPU), consumes a significant amount of energy. However, there are emerging mechanisms that don’t require as much energy, including the Proof of Stake mechanism that Ethereum is quickly moving towards.
These solutions bode well for more efficient maintenance of the ecosystem.
SCW: Do you have any message for city leaders about smarter energy for cities? What action can they take?
The grid is inevitably evolving and transforming to include more distributed energy resources. Cities should embrace decentralisation and adopt emerging frontier technologies like blockchain, AI, and IoT into the energy equation.
Cities should embrace decentralisation and adopt emerging frontier technologies like blockchain, AI, and IoT into the energy equation.
SCW: What’s next for Electrify?
ML: With the complete liberalisation of Singapore’s electricity marketplace ahead, we’re excited to open our new and improved retail electricity marketplace to Singaporean households. At the same time, in the coming months, we will be developing Synergy and getting it ready for full commercial deployment.
The artificial intelligence (AI) element of the platform will also come at a later stage. This will involve AI for smart matching between prosumers and consumers.