WESM explores digital electricity tokens

By Myrna M. Velasco – August 27, 2018, 10:00 PM
from Manila Bulletin

WESM-Mindanao

 

Post its transition into having an independent market operator (IMO), the country’s Wholesale Electricity Spot Market (WESM) indicated openness to exploring ‘digital currency for electricity’ as added layer on its future market trading portfolio.

According to Independent Electricity Market Operator of the Philippines (IEMOP) President Saturnino C. Juan, power tokens are among the options they could foresee happening in the future, although he qualified that the WESM has yet to undertake formal studies on such.

“All these things can happen in the future. We are seeing a lot of promise with that transition into an independent market operator and with an entity now fully private, we can leverage on the experience of our personnel and also the information that we gather as market operator and explore these other markets, including the derivatives market,” he said.

Blockchain applications, which could include digital ‘energy tokens’, have been emerging as part of viable trading alternatives in electricity markets.

This digital currency trading for electricity could come in the form of cryptocurrency or any other digital application of tokenizing the buying and selling of a kilowatt-hour of power commodity.

Global experts have been noting that after the ‘oilcoin’ of the petroleum sector, a ‘power-based token’ or digital currency; as well as other methods of electricity commodity trading will definitely come as the next big wave of innovation in the energy sector.

While bitcoin is currently the most well known blockchain trading system, energy companies are devising other ways on how to “tokenize and hedge” on electricity selling and purchasing with the deployment of other digital applications.

German conglomerate Siemens, which is also the technology supplier of the new market trading platform for WESM, has been advancing into this sphere – initially with Lo3 Energy in the United States, a trailblazing blockchain-enabled microgrid system in Brooklyn, in which transactions are done with what they term as “exergy,” or energy token which takes the form of distributed ledgers with cryptographic security.

This enabled the connection of 60 solar sites and has been empowering facility owners, not just to exercise hedging but also for them to sell and buy electricity to and from the system at any time they want.

Going forward into the future, blockchain technologies are being pushed into market core to become part of energy’s digital future. It is reckoned that pioneers and early adopters will eventually emerge as the winners in the marketplace.

The decentralized systems, like micro-grids, are considered perfect candidates for blockchain application. And on the whole, this could democratize and revolutionize how energy is traded across the market chain.

It is also seen that these digital tools would be able to create new business models from energy suppliers to the consumers, hence, it will be expanding the choice for electricity end-users.

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