In-depth interpretation of the decentralized energy sector and blue-chip projects
Blockchain technology and DePIN provide a key framework for decentralized energy systems. This article introduces several key energy protocols that reflect notable advancements in this decentralized energy landscape, including Project Zero, Daylight, StarPower, Plural Energy, Glow, Sourceful, and Power Ledger.
Original Title: Decentralized Energy Protocols
Original Author: insights4.vc
Original Compilation: Felix, PANews
The energy landscape is undergoing a profound transformation, with global electricity demand expected to nearly double by 2040. This puts pressure on the aging centralized grid. The traditional unidirectional flow of electricity (from large centralized plants to end-users) can no longer keep pace with the complexity of modern energy demands, especially as renewable and decentralized energy resources (DER) become an indispensable part of the energy mix.
This year is a critical one for energy investment, with global spending projected to exceed $3 trillion, of which about $2 trillion will be allocated to clean energy technologies and infrastructure. Investments in renewable energy, grid upgrades, and storage are expected to surpass total spending on oil, gas, and coal for the first time. By 2030, renewable energy is expected to account for nearly 20% of global energy consumption, up from 13% in 2023, primarily due to advancements in solar and wind energy.
Grid Diagram
The Role of Decentralized Energy Resources (DER)
Decentralized energy resources (DER), such as solar, wind, battery storage, and demand response technologies, are reshaping the energy landscape by enabling decentralized energy production and consumption. These innovations challenge the traditional centralized radial model and necessitate a transition to a decentralized bidirectional grid to accommodate the expanding network of small producers and consumers.
While DER offers greater efficiency and resilience, its integration brings new complexities to grid management. The traditional grid lacks the flexibility to handle dynamic interactions within multiple energy networks, especially the intermittency of renewable energy.
Blockchain and DePIN: Transformative Solutions
Blockchain technology and DePIN provide a critical framework for decentralized energy systems. The transparency and peer-to-peer energy trading capabilities of blockchain enable energy producers and consumers to participate in more efficient and equitable markets. Through smart contracts and tokenization, transactions are streamlined, costs are reduced, and the generation and consumption of renewable energy are incentivized. Additionally, the real-time data capabilities of blockchain enhance grid reliability by achieving precise supply-demand balance.
Key Advantages of Blockchain in Distributed Energy Networks
- Enhanced Grid Efficiency and Reliability: Local generation and storage can reduce transmission losses, while real-time validation through blockchain can enhance grid stability and reduce outages.
- Support for Renewable Energy Integration: Blockchain platforms coordinate supply and demand among DER, helping to manage the intermittency of renewable energy and reduce reliance on fossil fuels.
- Empowering Producers and Consumers: Distributed grids democratize the energy market, allowing consumers to monetize excess energy, enhancing energy independence and driving competitive pricing.
- Simplified Compliance and Financing: The transparency of blockchain simplifies regulatory reporting, and tokenization introduces new financing channels by attracting investments in renewable energy projects tied to energy assets or environmental attributes.
Decentralizing the grid is key to driving DER innovation. However, modernizing the grid remains a challenge, hindered by traditional infrastructure, insufficient real-time data, and limited automation. The entire industry recognizes the need for transformation to meet growing energy demands, enhance resilience, and extend services to underserved areas. Decentralized solutions address challenges related to supply-demand balance, grid reliability, and rural access. However, achieving scalable impact requires significant capital and regulatory coordination.
The following will explore several key energy protocols that embody notable progress in this decentralized energy landscape.
Project Zero (Developed by Fuse)
Focus: A decentralized renewable energy network with integrated DER services
Core Team: Alan Chang (CEO), Charles Orr (COO)
Funding (Total Raised: $90 million):
- Seed Round: September 7, 2022; Amount Raised: $78 million; Investors: Ribbit Capital, Accel, Balderton Capital (lead), Lakestar (lead), BoxGroup, Creandum, Lowercarbon Capital
- Strategic Round: September 12, 2024; Amount Raised: $12 million; Investors: Multicoin Capital (lead), Anatoly Yakovenko
Fuse, co-founded by former Revolut executives Alan Chang and Charles Orr, is addressing the energy crisis through a vertically integrated, data-intensive renewable energy approach. Leveraging their experience in scaling Revolut, Chang and Orr established Fuse to operate utility-scale solar and wind farms, DER installation businesses, and serve tens of thousands of households in the UK as a regulated electricity supplier.
Key Data:
- Energy Demand: Globally, an additional 4,000 terawatt-hours of generation capacity must be added annually over the next decade to meet energy demand—essentially rebuilding the U.S. grid every year.
- Investment Requirements: By 2030, an annual investment of $4 trillion is critical for grid modernization and infrastructure.
Fuse addresses inefficiencies in the traditional energy stack by establishing real-time data monitoring and vertically integrating energy production, distribution, and retail. Through Project Zero, Fuse incentivizes participants to shift energy consumption towards renewables, helping stabilize the grid and promote DER adoption. By integrating DER, Fuse can also operate as a virtual power plant (VPP), providing grid services that can generate up to $100,000 in revenue per megawatt while optimizing profitability alongside renewable energy integration.
Fuse combines advanced data collection, real-time monitoring, and a vertically integrated model to surpass traditional utilities. By leveraging DER, Project Zero, and real-time analytics, Fuse is committed to delivering cleaner, cheaper energy while transforming the energy retail sector into a consumer-responsive ecosystem.
Daylight
Focus: Decentralized energy protocol
Core Team: Jason Badeaux (CEO), Dallas Griffin (COO), Udit Patel (CTO), Evan Caron (CSO).
Funding:
Series A: July 31, 2024; Amount Raised: $9 million; Investors: Andreessen Horowitz (lead), Framework Ventures, Lattice, Escape Velocity (EV3), Lerer Hippeau.
Daylight is a decentralized protocol focused on transforming the energy grid through the use of DER. Currently, DER (such as solar panels, smart thermostats, and batteries) operates in a decentralized manner with little incentive for individual owners to actively contribute to grid stability. Daylight bridges this gap by integrating DER data, which energy companies can purchase to improve grid management.
Initially, Daylight will collect and sell real-time DER data to energy companies, helping them optimize grid performance. In the long term, the protocol aims to enable users to form virtual power plants (VPP) from connected DER. These VPPs act as integrated energy sources that can feed back into the grid during peak demand or adjust consumption patterns. Through Daylight, individual households and businesses can directly sell excess energy or even auction off the rights to use their resources, creating a competitive market where the responsibility for energy assets can be delegated in real-time to the highest bidder.
StarPower
Focus: Decentralized energy network through IoT
Core Team: Laser Ding (CEO), Darcy Jia
Funding:
Pre-seed Round: June 4, 2024; Amount Raised: $2 million; Investors: Alliance DAO (incubator), Arweave, IoTeX, Bas1s Ventures, Maximillian Jungreis (angel), Sal Gala (angel), Shen Bo (angel).
Starpower operates a decentralized energy network that connects distributed energy devices (DER) such as air conditioners, home batteries, and electric vehicles, focusing on optimizing energy use and stabilizing grid operations. The platform uses usage-based algorithms to coordinate device charging/discharging, aiming to reduce energy fluctuations and improve efficiency.
Key Data:
- Global VPP Market: The market size for VPP is expected to exceed $100 billion, with DER accounting for 5-20% of total electricity in regions with high renewable energy adoption.
- Electricity Demand: Projections indicate that demand will double by 2045, driven by the adoption of AI and electric vehicles.
- Environmental Impact: According to NREL data, VPP could reduce greenhouse gas emissions by 60 million tons by 2050.
Starpower integrates DER globally, coordinating energy distribution within regions to form "virtual power plants." This network effect allows devices (from household appliances to commercial batteries) to dynamically respond to grid demands, providing energy stability akin to an "electronic dam," stabilizing renewable energy power. The platform rewards connected devices with STAR tokens, incentivizing user participation and optimizing energy use.
Starpower employs a DePIN approach to share capital and operational expenditures among participants, achieving cost-effective operations. The STAR token drives network growth, supporting VPP creation, demand response, and data monetization while reducing operational costs compared to traditional energy suppliers. Starpower is building a comprehensive energy management ecosystem to accelerate the global transition to sustainable, decentralized energy.
Plural Energy
Focus: SEC-compliant on-chain financing for clean energy investments
Core Team: Adam Silver (CEO), Kent Kolze (CTO), Alexander Fong, Jason Grissino
Funding Insights:
Pre-seed Round: May 30, 2024; Amount Raised: $2.3 million; Investors: Compound VC (lead), Necessary Ventures (lead), Maven 11 Capital, Volt Capital
Plural Energy is an on-chain platform designed to make renewable energy investments as accessible as traditional stock market investments. Achieving the 2030 climate goals still requires over $4 trillion, and Plural addresses this funding gap by bringing institutional-grade renewable energy assets to a broader audience.
Key Data and Investment Structure:
- Capital Demand: An annual investment of $4 trillion in renewable energy is needed to meet climate goals.
- Initial Offering: Solaris Energy's tokenized investment portfolio for solar projects launched in the U.S.
- Investor Interest: Over 40,000 registrations on the waitlist for the first on-chain asset issuance.
Plural utilizes blockchain to tokenize renewable assets, allowing both institutional and retail investors to easily access these assets. The platform automates capital flow and reduces intermediary costs, providing higher returns and lower capital costs for renewable energy developers.
Plural focuses on projects typically under $100 million, which often lack sufficient funding due to high transaction costs and logistical challenges. By lowering entry barriers and improving transaction efficiency, Plural opens these mid-sized projects to a new class of investors, addressing the "missing middle" in renewable energy.
In addition to project financing, Plural ensures compliance with SEC regulations by working directly with registered broker-dealers and implementing KYC/AML protocols. Through blockchain-supported transparency, Plural's model allows anyone to invest in renewable energy and track the financial performance and environmental impact of their investments.
Glow
Focus: Decentralized solar grid achieving 100% renewable energy
Core Team: David Vorick (CEO)
Funding Insights:
Undisclosed Round: October 31, 2024; Amount Raised: $30 million; Investors: Framework Ventures (lead), Union Square Ventures (lead).
Traditional carbon credit markets often fail to distinguish financially self-sufficient solar farms from those needing support, leading to inefficient incentive distribution. Due to a lack of effective mechanisms for verification, much of the carbon reduction potential from solar energy remains unrealized.
Converting global power generation to solar can reduce CO2 emissions by over 40%, which has significant implications for addressing climate change.
Token Distribution: Glow mints 230,000 GLW tokens weekly, distributed as follows:
- Solar Farms: 175,000 tokens for carbon offset contributions
- On-chain Grants: 40,000 tokens for funding ecosystem initiatives
- Certification Agents: 10,000 tokens for supporting verification and auditing
- Veto Committee: 5,000 tokens for monitoring governance and ensuring network integrity
Annual Token Supply: Glow produces 12 million GLW tokens each year, maintaining a fixed inflation rate.
Glow operates on Ethereum and incentivizes solar farms through two types of tokens:
- GLW Token: A fixed inflation reward token that powers economic incentives within the Glow ecosystem.
- GCC Token: Each GCC represents one ton of avoided CO2 emissions. These tokens are generated by verified solar farms and can be auctioned, traded, or redeemed for cash. Prices follow a descending auction model, with carbon credits released weekly to incentivize effective market participation.
Impact Mechanism: Solar power plants must allocate 100% of their electricity revenue to the Glow pool, ensuring that only non-profitable plants qualify for carbon credits. Incentives are distributed based on verified carbon credits, promoting cost-effectiveness among competitors in a manner similar to Bitcoin's proof of work. Glow Certification Agents (GCA) conduct regular audits, publish on-chain reports to ensure transparency, and receive 10,000 GLW tokens weekly to incentivize accuracy and consistency.
Economic Impact: GCC tokens represent the avoidance of one ton of CO2 emissions, providing a reliable and tradable metric for offsetting emissions, linking carbon credits with blockchain transparency. Glow's "Impact Catalyst" liquidity pool stabilizes the market value of GCC through GCC/USDC on Uniswap, maintaining price stability and allowing users to achieve carbon neutrality through a self-sustaining market structure.
Governance and Security: Glow adopts a "propose, select, review, approve" model, empowering token holders to propose and vote on protocol changes, including the election of the veto committee and GCA. The veto committee receives 5,000 GLW tokens weekly, safeguarding the integrity of the protocol by halting suspicious activities when necessary. Glow's immutable code prohibits adjustments to token supply or inflation, ensuring long-term economic stability and trust.
Sourceful
Focus: Dual-mining renewable energy network
Core Team: Fredrik Ahlgren (CEO), Tobias Olsson (CTO), Viktor Olofsson (BD), David Mozart Andraws, Johan Leitet
Funding Insights:
Pre-seed Round: July 31, 2024; Amount Raised: Over $500,000; Investors: Borderless Capital (lead), Helium Foundation
Sourceful addresses the core challenges of renewable energy by creating a blockchain ecosystem that combines decentralized energy resources with incentives and accessible technology, promoting a more decentralized and sustainable energy grid.
Key Data and Approach:
- Entry Barriers: The Sourceful platform challenges the dominance of non-renewable energy by lowering the integration threshold for DER within VPP structures. VPPs are supported by the Helium network and powered by IoT devices, leveraging DER to provide grid stability and flexibility.
- Incentive Mechanism: Sourceful mimics Helium's token economics, incentivizing DER owners through the ENERGY token system, rewarding users for providing grid services and flexibility contributions. Beta participants currently earn points; after launch, participants will earn tokens for actions like executing grid balancing.
- Cost Reduction: By standardizing DER connections through the Energy Gateway (an IoT device with cryptographic security features), Sourceful minimizes upfront costs and operational efficiency. The gateway communicates directly with inverters using the Modbus protocol, simplifying data flow and validating contributions through Helium's LoRaWAN network, enhancing security and reducing third-party costs.
How It Works:
- Energy Gateway: Sourceful's IoT-based gateway securely connects DER to the grid, facilitating seamless energy data transmission and control.
- Virtual Power Plant (VPP): Sourceful aggregates DER, allowing small producers to participate in services like grid stability. During peak demand, connected DER provides flexibility, stabilizing supply-demand balance. Availability and active participation are rewarded, supporting grid stability.
- Token Economics and Burn Model: The ENERGY token adopts a mint-and-burn balance model, where tokens are minted for contributors and burned when energy services are used, stabilizing token supply and rewarding users and grid operators.
By lowering entry barriers, providing strong incentives, and implementing cost-effective DER integration, Sourceful promotes the adoption of decentralized energy. Through the ENERGY token and scalable VPP, Sourceful is reshaping the energy market into a resilient, community-driven ecosystem.
Power Ledger
Focus: Energy trading and traceability software
Core Team: Jemma Green, John Bulich
Funding Situation:
- Initial Token Offering: September 4, 2017; Amount Raised: $34 million; Investors: Galaxy, Blockchain Capital, Bill Tai, George Burke, Fundamental Labs, Alexis Berthoud, Limitless Crypto Investments, Andreas Schwartz
- Grant: November 17, 2017; Amount Raised: $8 million; Investors: Australian Government
- Seed Round: September 1, 2018; Amount Raised: $3 million; Investors: BetterLabs Ventures
- Venture Round: June 16, 2022; Amount Raised: Undisclosed; Investors: Sangha Capital (lead)
POWR/USD
Power Ledger is the only project introduced today with a publicly traded token, providing users the ability to engage in P2P energy trading and market decentralized energy resources (DER) to energy companies. The platform is organized around two main pillars: energy trading and traceability, as well as environmental commodity trading.
The energy trading and traceability components enable individuals to monitor their energy consumption and facilitate P2P trading of excess grid energy.
The environmental commodity trading component provides traders access to carbon credits, renewable energy certificates, and other energy derivatives markets. While the long-term viability of carbon credit markets remains uncertain, the potential and scale of P2P energy trading are significant.
The decentralized energy industry faces numerous challenges and can be considered one of the most complex and nuanced verticals within DePIN. In addition to the need for regulatory clarity, large-scale infrastructure reform is essential. Despite considerable barriers in this landscape, it presents significant opportunities for those capable of accelerating the transition to a decentralized energy future.
In addition to the projects detailed above, the following projects are also worth exploring:
- PowerPod: Focused on building a shared ownership charging network, providing a collaborative approach to charging infrastructure.
- DeCharge: Committed to enhancing electric vehicle infrastructure by adhering to the OCPP global standard, which allows for universal compatibility across EV charging stations. This project particularly focuses on the Indian market.
- Arkreen: Utilizing Web3 technology to create digital infrastructure supporting globally distributed renewable energy.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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