You are here
SP Group to launch platform for home owners to sell solar energy certs
POWER grid operator SP Group is tapping blockchain technology to link up residential and other small producers of solar energy with businesses that have a carbon footprint.
The blockchain-enabled digital platform - expected to be a global first when launched by the end of this year - could speed up the use of solar panels and also offer a variation of carbon emissions trading.
It would transform the local market that has until now been dominated by large producers and buyers of solar energy and also accelerate the adoption of solar photovoltaics (PV) in Singapore, said the Temasek-owned firm.
The platform, developed by an in-house SP team, allows those with registered solar PV panels to display the amount of renewable energy they have produced in the form of renewable energy certificates (RECs).
Companies or other organisations can purchase these to offset their carbon emissions. The platform enables buyers to filter listings by various criteria, including the amount of energy, originating country and asset type.
RECs represent electricity produced using environmentally friendly processes. They are similar to the concept of carbon emissions trading, but measured in kilowatt hours instead of tonnes of avoided carbon.
Companies with a mandate to use green power, but without the ability to invest in their own solar panels or other renewable energy sources, often buy RECs to offset their energy consumption.
REC registries can be found in countries such as India, the US and Australia; these require independent certification parties to verify that the electricity represented by the RECs is green and that no double counting of environmental benefits has taken place.
SP's platform will not require such verification because the blockchain system eliminates the possibility of fraud and double counting, said the firm.
Furthermore, with the platform, buyers and sellers would no longer have to spend time and effort working out bilateral agreements for solar energy, as is the case in Singapore today.
All of these combined means the platform would help users reduce their transaction and administrative costs in selling or buying solar energy, SP said.
SP chief digital officer Samuel Tan, who was in Germany to present the platform at a energy-sector blockchain event, told reporters in a video conference: "By aggregating the masses, we hope that this will help the buyers to meet their sustainability goal."
SP plans to roll out the platform by the end of the year, and will make it free to use at the start.
How it would eventually earn revenue through the platform is yet to be determined, said chief executive Wong Kim Yin.
While the platform is targeted at companies, SP does not rule out having individuals as buyers, which would effectively enable peer-to-peer energy trading. With the platform transacting only RECs and not energy itself, it will not need the prior approval of energy regulator Energy Market Authority, SP said.
The platform would also be an international one, as the blockchain infrastructure enables transactions to take place across countries. "This marketplace is global immediately," said Mr Wong.
Solar adoption in Singapore is still low. Installed capacity was only 145 megawatts-peak as at the end of last September, compared to peak system demand of about 7,000 megawatts.
But SP hopes the platform would be ready when solar energy takes off in the country.
SP managing director of digital technology Chang Sau Sheong said: "It's always a chicken-and-egg story. We want to use this to drive the adoption of solar."
A similar registry for REC was launched by American environmental infrastructure solutions provider APX two years ago, with the Solar Energy Research Institute of Singapore as the third-party verification agency. APX did not respond to The Business Times' queries on how well the registry has performed since then.
The announcement by SP comes as activity picks up in Singapore's solar sector, with generation companies such as Sembcorp Industries and Senoko Energy venturing into developing solar systems in the past two years, though the solar generation market is still dominated by solar developer Sunseap.
Sunseap and energy startup Sun Electric are among the pioneers in Singapore in separating the generation of solar power from its consumption. In November 2015, Sunseap signed a deal with Apple for the tech giant to receive power generated by solar-energy systems on the rooftops of other buildings, on top of that generated by its own.
Sun Electric, which started operations in 2013 and currently has 2MW of solar capacity installed, connects organisations wishing to adopt renewable-energy options but which are hobbled by space constraints, with parties with excess rooftop space.