How WePower’s blockchain-based energy financing will revolutionize traditional financing for renewable energy systems
https://medium.com/wepower/how-wepowers-blockchain-based-energy-financing-will-revolutionize-traditional-financing-for-f93cf11a7145Mobilizing finance for investment and innovation in low-carbon renewable power systems is a key driver for climate change mitigation.
There are currently many ways to finance renewable power systems including traditional private equity financing, tax equity, renewable energy bonds, leases, power purchase agreements and more recently crowdsourcing, property assessed clean energy, virtual net metering and other creative methods for financing renewable energy projects.
Traditional project finance is subject to geographic, government, and regulatory uncertainty based on different rules and regulations depending on where renewable energy systems are being developed. As well, a major bottleneck limitation with traditional renewable energy financing is that most projects require power offtake agreements such as Power Purchase Agreements (PPAs) to be in place before financing is approved creating many risks for developers. This creates a situation where many projects are not approved due to the financing methodologies requiring that the entire projects output be accounted for over the life of the project typically 15 to 20 years. What this typically means is that the entire energy output of the renewable power system must be bought with a guarantee for the life of the project limiting projects to those who can commit to 15- 20 years of green energy purchases.
WePower is a blockchain-based green energy trading platform. WePower enables renewable energy producers to raise capital by issuing their own energy tokens. These tokens represent energy they commit to produce and deliver. Energy tokenization standardizes, simplifies and opens up a globally energy investment ecosystem. As a result, energy producers can trade directly with the green energy buyers (consumers and investors) and raise capital by selling energy upfront, at below market rates. Energy tokenization ensures liquidity and extends much needed access to capital..........