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Energy Business and Blockchain #4 The latest trends in energy ICO
In my previous article, I looked at the dawn, present and future potential of energy trading platforms, the most popular application of blockchain technology in the energy sector. In this article, I will cover energy-sector ICOs. After first taking a bird’s-eye view of overall ICO trends beyond energy, we will then consider the future of ICOs in the energy sector. The current state of ICOs Following a sharp increase in ICOs in 2017, the first half of 2018 saw ICOs continue to boom with over 100 each month. A downward trend began in the second half, however, and according to Coin Schedule, January 2019 had only 24. Figure 1 shows Coin Schedule’s number of ICOs implemented each month from January 2016 to January 2019.1  1. Although the numbers differ depending on the source, this data is quoted from Coin Schedule, which provides data from 2016 to the present. I believe it is sufficient to observe the trend. Other sources include ICObench and Coindesk ICO tracker.   Figure 2 shows the change in the amount of capital raised through ICOs and the cryptocurrency market capitalization over the same period. The peaks are shifted slightly from the cryptocurrency market cap but show the same trend – a current downturn. The March and June 2018 peaks consist primarily of the super-large Telegram and EOS ICOs, which raised $1.7 billion (approx. 187 billion yen2) and $4.2 billion (approx. 462 billion yen) respectively. 2. The exchange rate is 110 yen per $1. Overview of energy-sector ICOs According to Coin Schedule, of ICOs implemented in 2018, “Energy and Utilities” projects raised $322 million (approx. 35.4 billion yen), 1.5% of the total. From the second quarter of 2017 to the first quarter of 2018, blockchain-related energy-sector startups raised almost the same amount, $324 million, 75% of which…
Energy Business and Blockchain #2 Financing in the era of infrastructure democratization
In my previous article, I reviewed the trend of deregulation and liberalization of the utility sector and explained that transactions that used to be self-contained internally are now being externalized, that customers’ DERs (Distributed Energy Resources) are being utilized for grid management upon increase in variable renewable energy such as solar PV and wind, and that platforms are being developed to realize the new concept of peer-to-peer (P2P) energy trading. In this article, I will discuss how blockchain technology and ICO (Initial Coin Offering) can be utilized for democratization of energy infrastructure. Still halfway on democratization of infrastructure Power generation plants, positioned on the upstream of energy infrastructure, used to be large scale, centralized, and built by state-run corporations or corporations with large capital. However, building power generation plants has become much less difficult because of cost reduction of solar PV and wind power technology in the past decade. A small-scale plant can be built on the rooftop of a house, unused land, or in a factory. Energy is being decentralized, and a foundation is being built for the democratization of infrastructure.   In Japan, solar PV has been booming since 2012, the year feed-in-tariff (FIT) started until around 2015. “Mega solar, ” megawatt-class (1MW=1,000kW, a 1MW plant can power approx. 200 houses) solar PV plants have been built all over Japan mainly for investment purpose. Solar PV plants of this scale require capital of 100s million yen (millions US dollars), and only corporations that have capitals in addition to capabilities of land procurement and development can built mega solar PV plants.   Under the current policy, owners of generation plants receive sales of energy that is funded by “renewable energy generation promotion levy” paid by organizations and households on top of electricity charges. If a owner of generation plants…