Siemens’ Energy Token Use Case | The relevance of energy tokens

Welcome, good morning, good afternoon, wherever you are! This is the Two Tokens Podcast, and today we have a special remote episode with guests from all over Europe. Our special guest is Tobias Weber, an expert in decentralized energy solutions in Zurich. We will be discussing energy tokenization and decentralized energy solutions with Michelle Shatila, a lawyer and the surviving captain of the Energy Token Working Group. But before we dive into the discussion, let’s give a brief introduction to the Energy Token Working Group and the Power of the Many project.

The Energy Token Working Group is a part of the Two Tokens organization, focused on exploring and navigating the energy ecosystem. Their goal is to empower individuals and communities in the new energy environment and accelerate the energy transition. In their initial phase, the group focused on understanding blockchain technology and tokenization in order to identify potential use cases. They discovered that tokenization could be applied to energy packages, creating two types of tokens: one representing the demand and supply of energy, and another representing the trading of energy.

However, the group soon realized that there was a growing movement towards local energy initiatives and cooperatives in Europe. This led them to expand their token set to include fractional ownership tokens, representing ownership of solar panels. They also explored tokenizing power purchase agreements and renewable energy certificates. Recently, they have been exploring the concept of dynamic NFTs (non-fungible tokens) to represent assets throughout their lifecycle.

Now, let’s turn our attention to Tobias Weber, who works at Siemens in decentralized energy solutions. Siemens focuses on providing infrastructure solutions for businesses globally, including building technology and energy management. Tobias explains that the energy landscape is shifting from traditional power grids to a decentralized energy cloud, with distributed and cleaner power flows. This shift requires a digital transformation of the energy infrastructure, combining energy with blockchain technology.

Siemens works with firms and factories to help them set up renewable energy sources and distributed energy systems. They aim to make buildings more sustainable by integrating renewable energy assets and charging infrastructure. However, Tobias acknowledges the challenge of separating buildings from the grid infrastructure, as they still rely on utility companies for backup supply and grid connectivity.

The conversation then shifts to the concept of energy tokenization and how it fits into Siemens’ decentralized energy solutions. Tobias explains that tokenization can help address the financing needs of renewable energy assets. By tokenizing assets, the ticket size of investments can be increased, making them more attractive to institutional investors. This can help bridge the gap between the need for financing and the availability of funds.

However, tokenization also presents regulatory challenges, as it involves both energy market regulations and financial market regulations. Tobias mentions the need for a framework that addresses these challenges and provides clarity for institutional investors. He also highlights the potential of blockchain technology to streamline asset management and reduce transaction costs by providing validated data on the blockchain.

The discussion then delves into the potential market for energy tokenization. While Siemens primarily focuses on institutional investors, there is a growing market for impact investing and sustainable assets. Tobias believes that the market for sustainable investments is skyrocketing, as investors shift their focus towards impact and sustainability. He also mentions the potential of dynamic NFTs as a token solution for representing assets and their performance data throughout their lifecycle.

The conversation concludes with a discussion on the inhibitors to progress in the energy domain. Tobias emphasizes the complexity of stakeholder dynamics and the need to create a value proposition for all stakeholders involved. He also highlights the challenges posed by energy market regulations and financial market regulations. Michelle adds that the regulatory environment and consumer protection laws can also impact the implementation of innovative energy solutions. However, both agree that B2B solutions and collaboration between stakeholders can help drive innovation in the energy sector.

In summary, the discussion highlights the potential of energy tokenization and decentralized energy solutions in accelerating the energy transition. Siemens’ focus on decentralized energy solutions and their exploration of dynamic NFTs demonstrate their commitment to innovation in the energy sector. While there are regulatory challenges to overcome, the market for sustainable investments is growing, creating opportunities for tokenization and impact investing.

FAQs:

1. What is the Energy Token Working Group?
The Energy Token Working Group is a part of the Two Tokens organization, focused on exploring and navigating the energy ecosystem. Their goal is to empower individuals and communities in the new energy environment and accelerate the energy transition.

2. What are the use cases for energy tokenization?
The use cases for energy tokenization include fractional ownership of solar panels, tokenizing power purchase agreements, and renewable energy certificates. The group is also exploring the concept of dynamic NFTs to represent assets throughout their lifecycle.

3. How does Siemens contribute to decentralized energy solutions?
Siemens works with firms and factories to help them set up renewable energy sources and distributed energy systems. They provide infrastructure solutions for buildings and integrate charging infrastructure. They also explore innovative financing solutions for sustainable assets.

4. What are the challenges of energy tokenization?
Energy tokenization faces regulatory challenges, as it involves both energy market regulations and financial market regulations. There is a need for a framework that addresses these challenges and provides clarity for institutional investors.

5. What is the potential market for energy tokenization?
The market for sustainable investments and impact investing is growing rapidly. Investors are shifting their focus towards sustainable assets, creating opportunities for energy tokenization. However, regulatory environments and consumer protection laws can impact the implementation of innovative energy solutions.

6. How can B2B solutions drive innovation in the energy sector?
B2B solutions can provide a more favorable regulatory environment for implementing innovative energy solutions. Collaboration between stakeholders, such as energy service companies and institutional investors, can help drive innovation and accelerate the energy transition.

Overall, the discussion highlights the potential of energy tokenization and decentralized energy solutions in transforming the energy sector. Siemens’ focus on innovation and their exploration of dynamic NFTs demonstrate their commitment to driving change in the industry. With the right regulatory framework and collaboration between stakeholders, energy tokenization can play a significant role in accelerating the transition to a sustainable energy future.