This project was conducted by EDF, one of the world’s largest electricity producers, REDEX, a leading renewable energy certificates (RECs) solutions provider and Rekursive Labs, a specialist in Web3 distributed ledger technology (DLT) enterprise solutions. The goal of this project is to streamline efficiency, transparency, and verification in the $19 billion renewable energy certificate market.
Renewable Energy Certificates (RECs) are a type of Energy Attribute Certificate (EAC) that represent the environmental attributes of the generation of a one-megawatt-hour (MWh) of energy produced by renewable sources. RECs are a market-based instrument that certifies the bearer owns one MWh of electricity generated from a renewable energy resource. Once the power provider has fed the energy into the grid, the REC received can then be sold on the open market as an energy commodity. The global renewable energy certificate market was valued at USD 10 billion in 2022 and is expected to reach USD 114.87 billion by 2032, poised to grow at a CAGR of 27.70%.
This instrument is used to trace power consumption to renewable energy sources. As a result of the Proof of Concept, any renewable energy production or consumption system can now achieve full automation of the REC lifecycle, from issuance to redemption.
In practice, the project enables end consumers to retire small quantities of RECs in real time. This gives people the opportunity to show that they care about the usage of renewable energy and holds of proof of such a claim and the energy that they actually consumed. Indeed, Distributed Ledgers like blockchain allows for transparency, traceability and immutability of the data. Any one can verify that the claim regarding the energy consumption is true and has not been altered with.
Current processes in many industries such as mining, supply chain, and energy are very opaque, analog or rely on outdated systems. In a world where efficiency and transparency matter more and more, these systems are not adapted and needs to be replaced. In the case of the REC, blockchain is the appropriate technology to revolutionise this industry.
Proof of Concept in practice: how the solution works:
The project has been tested in Singapore using EDF’s MASERA Microgrid demonstrator. Using the PoC, they proceeded to an automatic redemption of tokenized RECs at electric vehicle charging stations.
In order to have an accurate estimate of energy consumption, they first compute the rate of green energy production into the grid. This requires the collection and analysis of various data sources such as solar panels, generators, and energy storage systems. Then, they know the energy generated through the renewable energy source.
Afterwards, this data was matched in near-real time with the energy consumed by electric vehicle chargers, to ensure that the certified green energy usage perfectly matched the actual consumption at the charging stations.
Why is this necessary?
There is a growing necessity to measure carbon emissions and make the future more sustainable. For that matter, countries all over the world, and in our case the European Union, regulate this market. According to REDEX, that is one of the key motives for developing the project. “Europe’s Carbon Border Adjustment Mechanism (CBAM) has created an urgent need to calculate and track the embedded carbon of traded goods” said Zhaotan Xiao, Executive Director at REDEX. He strongly believes that tokenization will enable to create a scalable infrastructure to track environmental attributes across global supply chains.