What is Energy Web ?
Today the nationalized companies or large corporations provide our homes with electricity. In return, the corporations/government charge us the due amount. The customers cannot switch if they are unhappy with the existing prices or polluting energy sources because there are no alternative grid operators.
Energy web foundation aims to solve the problem by making the energy grid more decentralized. They want to put right incentives in place so that more customers invest in renewable energy sources like solar panels and sell spare electricity in an open market. As a result of more and more energy being produced using renewable distributed energy sources owned by individuals – the pollution will get reduced and energy will be available at true free-market prices. In this model, customers will have options to choose energy sources depending on their values and market prices.
Today renewable energy sources owned by customers like solar panels are not connected to the grid. There is no way of selling/sharing any spare energy being produced by the energy sources. This can change if appropriate infrastructure and energy markets are made.
Energy Web Blockchain was developed by Energy Web (EW), a global nonprofit organization accelerating a low-carbon, customer-centric electricity system by unleashing the potential of open-source, decentralized technologies.
Energy Web (EW) was launched in early 2017. It was co-founded by globally respected energy think-and-do tank Rocky Mountain Institute (RMI) and noted blockchain developer Grid Singularity (GSy), along with a cohort of 10 founding Affiliates. RMI and GSy— both contribute members to the board of directors of Energy Web
What's the vision ?
We know that pollution results in adverse effects on the environment like endangering living species and global warming.
Energy Web Foundation aims to solve the problem caused by pollution by putting right incentives in place such that:
- More customers invest in buying renewable sources of energy like solar panels.
- Energy corporations put decentralized infrastructure in place so that customers can buy and sell energy in a free market.
Energy Web Foundation’s vision of the future is ambitious and noble – The kind of stuff I like to invest in 😎
What problems does it solve ?
- Decarbonization: Using Energy Web Chain countries and companies have an option for using renewable energy sources for their processes.
- Partial ownership and revenue sharing of power assets: Using Energy Blockchain investors can directly buy energy-producing assets anywhere in the world and get a share of the revenue produced.
- Transparency: Blockchains are good at establishing trust and consensus. Energy Web Blockchain can be used as a tamper-proof source of truth to record when, where, how, by whom the energy was generated.
- Decentralized Infrastructure: Fewer power outages because of decentralization and no single point of failure.
- Free market economy: Prices will be free to adjust as per supply and demand dynamics instead of monopoly by Corporations or government policies. Earlier there was no incentive for the customers to sell electricity back to the grid as the prices set by government/corporations were very less.
- Renewable energy certificates: Countries, as well as companies, have to meet their climate goals by reducing their carbon footprints – this will be achieved by offsetting their emissions by buying renewable energy certificates.
- Energy poverty: There are still many places in the world that do not have access to electricity. Energy web chain can provide a profitable business model for startups to establish energy grids at such places.
How does it work ?
Out of the complete energy stack, Energy Web Foundation has built two layers ie Energy Web Blockchain and SDK kits.
They have collaborated with Energy Corporations and are educating customers to integrate Energy Assets. They have developed SDKs with documentation and tutorials for developers to learn and build apps on the Energy Web Chain infrastructure.
Energy Web Blockchain is used to establish trust and consensus among the market participants ie Grid operators and customers.
The software SDKs(EW Origin Market, EW Link, etc) provide tools for developers to make apps on top of the existing Energy Web Ecosystem.
Energy Web Blockchain
Energy Web Blockchain was launched in June 2019. Energy Web Foundation made customizations to Etherium code base for the energy industry.
Energy blockchain records all the transactions, identities, and account balances.
The blocks are validated by a fixed set of validator nodes run by energy corporations ie Proof of Authority.
Energy Web Token is the native currency of Energy blockchain and is used for paying gas fees similar to Etherium. Energy Web token is not an ERC 20 token.
Proof of Authority
Energy Web Blockchain uses Proof of Authority consensus mechanism. This reduces the level of decentralization but increases the throughput efficiency of Blockchain.
Energy Web Foundation has partnered with some of the largest Energy Corporations. The validator nodes are being run by these Eenrgy Corporations.
The Energy Blockchain is completely transparent ie all the transactions and history are available for everyone to see. However, new transactions can only be validated by the validator nodes being run by energy corporations.
Having proof of authority blockchain run by Power Corporations is one of the trade-offs that Energy Web Foundation had to make to onboard Power Corporations. Energy Blockchain is definitely not as decentralized as Proof of work blockchains like Bitcoin which is being used as store of wealth.
I feel that Energy Web Blockchain is decentralized enough, currently, it has around 46 reputed Power corporations that are geographically distributed running nodes. I would never trust my life savings in Proof of Authority Blockchain but I can definitely trust it for my electricity bills. I feel that number of validator nodes will keep increasing in the future making the blockchain more decentralized. You can read about the eligibility criteria for hosting a validator node and the process for removing malicious nodes here.
Moreover, it is better for the Energy Web foundation to work with Energy Corporations instead of competing against them. I do not see the Power Corporations colluding and doing malicious stuff which will harm Energy Web Blockchain as it will render their staked Energy Web Token worthless.
Energy Web Foundation has put in a lot of effort to explain, convince and bring together the largest Power Corporations from all over the world. Have a look at the panel discussion organized by Energy Web Foundation:
“It is important that we do not get stuck with the idea of 100% decentralization every time. One should be able to balance the benefits and risks of giving up decentralizations on case to case basis.”
The process of block formation is as follows:
Energy Web Decentralized Operating System(EW-DOS)
Energy Web Foundation have developed their own decentralized Operating System similar to Etherium Virtual Machine to make it easy for developers to develop Dapps.
The Energy Web Decentralized Operating System (EW-DOS) is open-source ans includes Energy Web Chain, middleware services, and software development toolkits (SDKs)
EW-DOS is the common base that can be used by developers to make Dapps as per their Business logic, capabilities, and geographical regulations.
Energy Web Switchboard
Its an open-source identity and access management (IAM) system for:
- Identity and Access Management: Customer enrollment processes like registration and role assignment don’t translate across markets or applications. This lack of standardization has limited the effectiveness of decentralized digital identities. Switchboard allows anyone to create a digital identity that he owns and controls independent of any authority, while at the same time allowing application owners to manage user enrollment. This approach has privacy at its core.
- Asset Management: Switchboard extends the DID approach to the management of intelligent assets such as behind-the-meter battery storage systems and electric vehicles. Owners of these assets can enroll them in various dApps via the same system of verified claims that the owners themselves use. This also allows application operators to ensure that assets have whatever characteristics are needed in order to participate in that market or program.
- App Store: Switchboard provides a fully decentralized application publishing, auditing, and upgrading solution. Users can find dApps, view verified audit reports and set criteria for upgrading.
- Service Subscription: Switchboard allows application developers and other enterprise users to subscribe to and manage various services within the EW-DOS stack. This means that messaging, gas relay, and key management services can be accessed via Switchboard. It also allows users to monitor and verify corresponding decentralized service level agreements.
You can access Energy Web Switchboard here.
Energy Web Origin
Energy Web Origin is the marketplace for buying and selling energy.
Here is a live demo of Energy Web Origin in action:
Energy Web Origin is used for Registering energy assets, issuing certificates once the asset produces energy which can be traded in an open marketplace in a transparent manner using blockchain.
Energy Web Flex
Energy Web Flex is a toolkit used for integrating distributed energy resources like solar panels and batteries in the market. The toolkit assigns identities to consumer devices, establishes protocols for secure communication among the connected devices and calculates compensation for the services provided/used by the devices
Energy Web Zero
Energy Web Zero is similar to Energy Web Origin ie a free market but Energy Web Zero is a marketplace designed specifically for trading renewable energy.
- TEO: Marketplace built on Energy Web Origin
Energy Web Foundation has already done the heavy lifting part: they have a working product ready. All that remains is to scale and improve the existing technology.
Check out Energ Web Foundation Council members and team:
The team members consist of experts from blockchain as well as energy industry background. Having experience in the energy sector comes in handy when navigating corporate structures, legal frameworks, and onboarding Power corporations(Do you think Power Corporations are going to listen to a bunch of geeks 😂).
Energy Web is not a DAO. Although partner power corporations are running validator nodes, they do not have the technical expertise and corporate structure to propose or implement changes to the code base.
The process for introducing changes to code is as follows:
However, I have my concerns that identified developers and updates are not put in place by Energy Web Foundation.
Energy Web Foundation is based in Switzerland where crypto regulations are favourable. But that fact cannot rule out the possibility of Energy Web Foundation being the single point of failure in terms of government regulation, founder differences, making changes to protocol like increasing the max token supply, etc.
Competition is weak(Almost nonexistent😋) and most of them will benefit if they work alongside Energy Web instead of competing with them. During my research, I could not find any of the Energy Web Foundation team mentioning any competitor, On being asked about competition their CEO said that their competition was Global Warming: which seems honest😎.
Energy Web Foundation has not shared any future timeline or public road map. But one can make an educated guess depending on their vision and present status.
In the future Energy Web Foundation will:
- focus on scaling the existing solutions like energy Origin, energy Flex, etc.
- Continue to partner with Power corporation.
- Continue to educate developers and help startups building on top of energy web ecosystem.
- Market themselves to more and more customers.
Reply of Energy Web CEO Walter Kok on being asked about their 5 year plan was:
How much money does Energy Web Foundation has for future development ?
Energy Web Foundation raised around $ 14 million from affiliates in 2018. In addition, they also have around 50 million Energy Web Token for future development.
- Strong Network effects: Once the Energy Web Foundation is able to gather critical mass the dynamics of network effect will take care of the rest.
- Global investment in clean energy is on an uptrend.
- Coal and Natural gas technology has matured whereas solar cell, battery, and wind energy technology is still improving resulting in the growth of renewable energy infrastructure.
- Customers will invest in renewable energy sources as options like solar panels & batteries become more cheap and accessible resulting in a need for a more decentralized energy grid infrastructure.
- The cost of production of energy from renewable sources has drastically reduced over the last few years.
- Energy Web Foundation can introduce Energy Web to existing millions of customers of their partner Energy Corporation.
- Distributed energy assets like electric cars and batteries will be more common in the future.
- Supporting technologies like IoT and Artificial intelligence are also improving at a fast pace.
- Energy Web Foundation is partnering with some of the largest brands in every sector. Some partnerships are public others are not. Here is a clip of Energy Web CEO Walter Kok Interview when asked about their partnership with Tesla.
- Most of the countries are regulating industries to decarbonize them. The companies will have to buy clean energy to offset their carbon footprints.
Energy Web is developed and maintained by the Energy Web Foundation . There is no guarantee that the company will not face difficulties like government regulations, lawsuits – for selling unregistered securities, internal disputes, etc.
Energy Web token sale was conducted in 2017. It has a max supply of 100 million tokens. Tokens were distributed as follows:
- EWF Endowment: To fund future operations of EWF
- Founder Tokens: For EWF founders (Rocky Mountain Institute and Grid Singularity)
- EWF Operations: To compensate EWF staff and EWF contractors, community partnerships, bounties, and grants
- Round A: To honor commitments to EWF Round A Affiliates
- Round B: To honor commitments to EWF Round B Affiliates
- Other: Under development. May include but is not limited to Round C, block validation awards,
At the time of writing the article, the total supply of Energy Web Token is around 40 million(40%) which will increase to 100 million over the next 10 years.
Uses of Energy Web Token
- Gas fees: Users will have to pay gas fees in Energy Web Token to get their transactions included in Energy Web Blockchain just like Etherium. However, the fees on Energy Web Blockchain will be considerably lower given that it is proof of authority Blockchain.
- Staking: Validators will have to stake Energy Web Token to become part of the validator network. The staked Energy Web Token will be slashed in case the validator acts maliciously.
- Compensating Validators: Similar to bitcoin mining, Validators get compensated for validating blocks
- Pay for services: Energy Web Token can be used to buy and sell Energy however it is not compulsory. Developers have the option to develop other cryptos to act as currencies, even Fiat be used to buy/ sell energy.
“It would have been even more bullish if the native currency for all transactions on Energy markets was Energy Web Token like Filecoin.”
Market Cap Analysis
Energy Web is going after a multi-trillion industry. The future is bright for Energy Web if they are able to become the platform that powers all the energy transactions in the future.
At the time of writing this article fully diluted market cap of Energy Web Token was around a billion US dollar.
Energy Web Token has max supply of 100 million. In 2021 it had a total supply of 48 million and a circulating supply of around 32 million.
Over the next years, 4 million Energy Web Token will be sold by Energy Web Foundation to fund projects and distribute validator block rewards which will result in inflation of approx 15%.
Indicators to watch out for
- Daily Energy Web transactions are steadily rising
- Google trend result for ” Energy Web Token” is as follows:
- Traffic to Energy Web Website is also on a rise:
- Energy Web Youtube subscribers and view are also increasing:
- Growth of Energy Web on Facebook is as follows:
- Their Twitter following is also growing:
“Energy Web seems to have the quality of a good investment: subscribers/followers of Energy Web are less but are increasing steadily. This means that only a few people know about Energy Web but they are making good progress.”
Other indicators to look out for that confirms Energy Web are on the right path:
- More partnerships in the field of Energy, Legal, Financial, IoT, Electric cars, Artificial intelligence.
- Manufacturers of energy assets like Electric cars, batteries start making their products with Energy Web integrations.
- Energy Web ecosystem being adopted my more and more places.
- More startups and developers working in Energy Web.
Once the technology gets matured it will find applications not just in the energy sector some of the examples I could think of are:
- Most of the second-hand cars have their meter readings tampered with. Using Energy Web blockchain customer will come to know the exact life and energy usage of the car.
- Companies will be able to prove that their products are truly green. Many customers will prefer such products even if they are more expensive than their competitors.
Investing in Energy Web Token is an infrastructure play. One can invest in Energy Web token if you feel that green decentralized power grids. Or rather you can invest in Energy Web token to make it a reality.
Tokenomics and timing for investing in Energy Web Token seem right as we have a pretty good picture of what Energy Web technology is capable of.
However, it is possible that the market takes some time to acknowledge the true potential of Energy Web because it takes time to build physical infrastructure like energy grids and energy assets compatible with Energy Web.
“Energy web is a noble cause that for the first time gives power to the common consumers to choose a green option. I love their vision and see value in what they are doing hence have personally invested in them.”