How a Clean Energy Entrepreneur is Betting on Blockchain
Dan Bates strives to provide energy to the powerless 1.2 billion people on earth as quickly as possible.
PHOTO CREDIT: Getty Images
Clean energy doesn't seem to be a priority anymore for many institutions. The process of implementing clean energy technology is extremely complicated and frustrating for inventors, which can prevent their ideas from seeing the light of day. There are 1.2 billion people around the world lacking electricity--but the current energy finance structure leaves them in the dark.
But what if entrepreneurs could more actively participate in the process? What if there was a way to circumnavigate the bureaucracy impeding progress? That's what CEO Dan Bates says he is pursuing with his company ImpactPPA. I recently spoke with Bates about his mission to transform the entire global energy finance industry.
Can you elaborate on how non-governmental organizations and government agencies are impeding energy innovation?
Bates: NGOs and government agencies are mandated to follow certain guidelines, and unfortunately these guidelines create an often slow and inefficient process when it comes to funding new energy projects. From start to finish, it is not uncommon for NGO's or government agencies to take years to fund and complete an energy project. With ImpactPPA's project finance and energy management platform we are trying to cut that implementation time from years down to months and in some cases even weeks.
We believe that access to power is a right not a privilege, so we are striving to provide energy to the powerless 1.2 billion people on earth as quickly as possible.
Throughout your career, did legacy financial institutions create any particular hurdles in your path to spreading clean energy that you were especially frustrated with?
Bates: I have been personally involved with many projects that required institutional or NGO funding, and sadly were not able to move forward. Many of these projects were in Africa where there exists challenging processes for approval. Some of the hurdles that must be overcome include: a country's poor credit rating, risk profile, letter of credit, or sovereign guarantees. Many of these issues can be satisfied through creative endeavors that a more traditional bank would not be willing to undertake.
This is the main driver for our need to decentralize project finance and use creative financial solutions and tools in order to accelerate the installation of renewables to ultimately help communities in need.
How did you come to the conclusion that it is important for ImpactPPA to use blockchain technology?
First, it offers access to capital through the crowd using the tokenization of Renewable Energy. Now, for the first time, a crowd of like-minded individuals can be connected with projects that are in need of capital and have a clear path to social good and revenue recognition. With the funds raised from the crowd we will be able to self finance all of our energy projects and bypass legacy financing. This solution creates a much faster and efficient deployment of energy to folks who, at present, do not have any power.
We also use the blockchain to manage our data and payment collection. The end users, or energy consumers, will pay for energy using our GEN credits on their mobile phones. In order for the end user to have access to energy they will need to interact with our smart meter that is connected to the blockchain. Smart meters will be located on the home or business and the end user will select the amount of power that they want (on their phone) and submit the appropriate number of GEN credits to the smart meter. This transaction is then mined and verified on the blockchain; when all of these steps are complete they receive energy and we receive payment.
This is not only important because it provides a reliable, secure, and transparent method to collect payment, but it also allows us to collect invaluable energy consumption data for a population that has never had it before. An increased accessibility to data allows us to continually improve on our installations.
Additionally, as we collect data we are giving identity to a large population that prior to this access to energy may not have had a digital footprint. This brings millions of the unbanked into this new economy.
How does blockchain allow for investors to see how their money is spent? How does this hold developers accountable to finish projects thoroughly and on time?
All aspects of the project will be transparent on the blockchain and in our smart contracts. Project costing, timelines, third parties, local partners, and labor and revenue generation will be made available. It is our goal to make the deployment of renewable energy projects open and available for all to see for the first time.
What is the purpose of using two different cryptocurrencies, the MPQ Tokens and GEN Credits, instead of just one?
Our two cryptocurrencies serve different purposes; simply put, the MPQ Token is used for project financing and is what an investor would purchase, while the GEN Credit is what the end user will use to purchase energy.
The reason we have separate currencies is that the value of the MPQ token can change based on various conditions in the market, while the GEN credit has a fixed price per kilowatt hour that is predetermined in the SmartPPA and is unique to each installation. We do not want the price of energy for our end user to be tied to an exchange where it can move up or down -- it needs to be a fixed price.
Is ImpactPPA already working on installing finished projects?
Yes! We currently have working projects in Haiti, Jamaica, and India. But these are just the beginning; we have 183 MW around under contract in our pipeline that are shovel ready and waiting to be deployed.