Trading renewable energy certificates digitally
Sector: Tertiary sector · Industry: Renewable energy · Organisation: American Public Power Association (APPA), Energy Blocks · Maturity level: Pilot
The American Public Power Association partnered with Energy Blocks to deploy a blockchain platform for tracking and trading renewable energy certificates. The shared ledger records the complete lifecycle of each certificate from power generation to final retirement without intermediaries. Public utilities across the United States benefit from streamlined compliance processes and verified proofs of green energy origin.
Documentation status
- Project status: Pilot (as of 08 July 2019) — The project was publicly presented in July 2019 as a pilot project for municipal energy suppliers of the APPA.
- Evidence: Evidence medium
- Editorial review: pending
Description
The American Public Power Association, together with Energy Blocks, designed a DLT solution that enables municipal energy suppliers to trade green electricity certificates with trust. Until now, the recording and resale of green electricity certificates required elaborate manual register reconciliations between various involved parties. Through the shared ledger, every unit of electricity generated is documented fraud-proof, reducing administrative costs and effectively preventing abuse.
Within the cooperation between the American Public Power Association (APPA) and the technology provider Energy Blocks, a platform was created for tracing and trading Renewable Energy Certificates (RECs). The technology is based on a permissioned distributed ledger that stores the lifecycle of each certificate from original electricity generation through ownership changes to final retirement. This addresses the widespread risk of double sales or non-transparent intermediary fees in conventional REC registers. The project specifically targets public and cooperative utilities in the United States, which often have fewer personnel resources in energy trading than large corporations. Through standardised transactions and transparent proofs, the REC market is intended to be made more liquid and efficient for municipal providers.
Perspectives
B2B — organisations perspective
The platform enables suppliers and commercial buyers to trade certificates directly and audit-proof without costly intermediaries. Smart contracts regulate the settlement and guarantee the immutable cancellation after quota fulfilment.
B2C — consumers perspective
End customers benefit indirectly from a verifiable declaration of the green electricity they receive from their local supplier. The risk of misinformation about actual environmental contributions is minimised by the tamper-proof proof chain.
Employees perspective
Employees in energy data management and regulation are relieved from manual spreadsheet reconciliation and lengthy register checks. The system automates transaction confirmations and simplifies the preparation of sustainability reports.
Benefits
General
- Increased transparency throughout the entire lifecycle of green electricity certificates
- Complete protection against double redemption or counting
- Reduction of administrative processing and auditing costs
B2B — organisations
- More efficient market access for smaller suppliers and industrial buyers
- Direct billing without intermediaries
Employees
- Elimination of time-consuming reconciliation and booking steps
- Higher reliability of audit data
Challenges
General
- Lack of uniform nationwide regulatory standards for DLT certificates in the USA
- Complexity in integrating existing metering and legacy systems
B2B — organisations
- Need for a critical mass of participating market players for sufficient liquidity
Employees
- Required development of technological understanding for DLT-based registry management
Technology foundation
Permissioned Distributed Ledger (Energy Blocks Blockchain Platform)
Implementation examples
APPA and Energy Blocks REC Trading Platform
Traditional trading of certificates of origin is characterised by manual registration processes, incomplete transparency, and high brokerage costs. Municipal utilities require a streamlined solution to reliably and auditably certify renewable energy.
In 2019, APPA partnered with Energy Blocks to develop a blockchain-based trading system for green energy certificates. The platform is intended to enable member companies to transparently track and trade certificates of origin.
In July 2019, the American Public Power Association announced, together with Energy Blocks, the development of a permissioned distributed ledger platform for Renewable Energy Certificates. The solution records RECs from the point of electricity generation through sale and transfer to final retirement by the end user. This approach aims to reduce administrative friction losses for municipal energy suppliers and facilitate compliance with regulatory environmental requirements.
Elimination of double counting risks and reduction of administrative overhead in the transfer of environmental certificates.
Tags
Guarantees of origin, Renewable energies, Distributed Ledger, Smart Contracts, Certificate trading