PEER-TO-PEER ENERGY TRADINGSOLUTION LOOKING FOR A PROBLEM OR THE PLATFORM FOR THE

ENERGY MARKET OF THE FUTURE?

OVERVIEW

The changing energy system; where the energy model is heading

and why it’s heading there whether we like it or not.

The risk being left behind.

Risk of incumbency – what have we got to lose from consumer-led

changes to the industry?

Blockchain enabled P2P – the argument for the blockchain.

Power Ledger experience to date.

THE PHYSICAL VALUE CHAIN… AS IT WAS

Courtesy of Western Power

NEW GENERATION IN AUSTRALIASince 2011, more new generation capacity has been installed on Australian rooftops than has been connected

to transmission networks across Australia. A combination of government subsidy, postage stamp pricing and

incentivised feed-in tariffs has seen more than 1.6 million Australian households to install roof-top solar

panels with capacity exceeding 5GW.

From Australian Clean Energy Regulator (PV uptake graph excludes WA households ~ 230,000)

AND THE FORECAST?Despite the reduction in upfront subsidies and the winding-back of generous feed-in tariffs, the AEMO forecasts

the number and size of roof-top PV installations to grow. Not only that, with the falling price of distributed

(behind the meter) storage, consumers are expected to become increasingly self-sufficient when it comes to

managing their own power needs.

From AEMO’s ESOO 2016 (WA)

LOAD DEFECTION: SOLAR AND BATTERIES

45% load defection 97% load

defection

IMPACT OF DECLINING NETWORK UTILISATION (WA)

Additional displaced network energy represents 8% - 16% of energy currently served to small business and

residential customers (RT1 – RT4 tariffs) in WA. 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, the

variable network tariff would increase 10 – 22%. For Synergy, WA’s State-owned retailer the potential loss of

sales equates to approximately $350 million per year (inclusive of network charges).

IMPACT OF DECLINING NETWORK UTILISATION (NSW)

In NSW, where the uptake of PV has been slower, the rate of load defection is slower, however as PV and

batteries reduce further in price and retail energy prices increase, consumers who adopt roof-top PV are likely

to also include behind-the-meter storage systems at the same time.

WHAT’S CHANGED, WHAT HASN’T…?

Energy system is no longer linear…

Prosumers play a role in planning and deploying generation…

Networks are no longer monopolies…

Prosumers sell electricity…

WHY WE NEED TO ACT

Load defection leaves vulnerable customers at risk of power

poverty.

Strata-titled developments don’t invest in roof-top PV.

Community-scaled renewable generators don’t always have the

scale or sophistication to deal with the energy market.

A SOLUTION – THE NETWORK AS A TRADING PLATFORM

Consumer-focused P2P trading platform that settles trades across

the distribution network at predetermined intervals.

The economic benefit to consumers will actively encourage new PV

up-take, reduce consumers’ power bills and reduce emissions.

Reduced load defection preserves the value of network assets.

Trading platform provides product development and customer

service opportunities.

WHY A BLOCKCHAIN?

Fast, cheap, secure, transparent settlement of multi-party transactions.

Formation of dynamic trading ecosystems.

Development of autonomous, secure and transparent distributed trading

markets with low-cost and virtually instantaneous market reconciliation

and settlement.

Trading arrangements between any number of counterparties where

each counterparty is able to trust the trading environment is free from

the interference or interpretation of any other counterparty.

THE POWER LEDGER TRADING PLATFORM

•Secure interface for consumers to buy and sell energy. Supported by existing banking infrastructure

and transaction products. Supports real-time payment of retailer, network and other charges.

Transaction Layer

•Smart trading engine that matches demand with available generation in each discrete trading period.

Ties a physical energy transaction with a financial transaction within each trading period. Supports the

allocation of value to the owners/investors in distributed system assets.

Trading Layer

•Provides the trust in the system. Provides an immutable record of all generation, consumption and

trade. Auditable, immutable and permanent. Provides data to the market on off-market transaction

(net trading position). Supports reporting and data management obligations.

Blockchain Layer

LEARNINGS FROM NLV BUSSELTON

Diversity it key to a liquid trading market.

Keep it simple.

The benefits are real.

Equitable access is achievable.

A software solution is achievable.

Dealing with data is time sensitive.

LEARNINGS FROM THE STRATA MARKET

Owner/occupiers want certainty.

Strata managers want simplicity.

Multiple investment drivers and scenarios exist.

Strata properties can be a big contributor to decarbonisation of the

energy system.

LEARNINGS FROM TRADING ACROSS THE REGULATED NETWORK

Network is an enormously important social asset.

Regulations don’t contemplate P2P trading.

P2P trading is achievable without massive change.

Developers are looking for work arounds.

POWER LEDGER

Built Australia’s first blockchain-enabled power

meter 08/2016.

Australia’s first blockchain-enabled peer-to-peer

trading trial – commenced September 2016,

successfully concluded January 2017.

Commenced trial of P2P trading across the

distribution network with Vector in NZ – Jan 2017.

Behind-the-meter trading product in deployment as

part of WGV project in Fremantle, WA.

Have a market-ready strata product

Developing a dynamic distribution market product.

THANKS FOR YOUR TIME, ANY QUESTIONS

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