Craig Interviews David Martin, Co-Founder & Managing Director of Power Ledger


The Trader Cobb crypto show talking business
in blockchain. G’Day everybody! Welcome to the Trader Cobb
crypto show another fantastic guest here from the Melbourne blockchain center this fantastic
event with David Martin of one of Australia’s most successful ICO projects. PowerLedger. We haven’t had you on the show before, though.
So very appreciative of your time. Welcome to the Trader Cobb crypto show. Happy to be
here. Mate let’s kick this off straight away by
just going into depth. I know many of the viewers and listeners out there are familiar
with your project. PowerLedger. It is been absolute knockout in Australia. We’ll go into detail about that in a minute.
But for those that are in different parts of the world, we do have a global audience.
Tell us a little bit about your background, and also why PowerLedger is PowerLedger. Okay, my background so I’ve been working in
the energy industry in Australia for the last 20 years. And mostly in integrated utilities
regulated network utilities. But I was running a project for a network company about three
years ago, called the Emerging technology strategic think. And we’re running around the countryside connecting
big batteries and micro grids and disconnecting customers where it made sense. And the whole
while we were doing that, I started to get concerned that as the price of energy storage
fell, there was less and less keeping consumers connected to the grid, so less of a reason
to stay connected to the grid. And that’s a bad thing. Because as people
defect from the grid, or they find less of their energy from the grid, the price of the
grid supplied energy for everybody else goes up. And the people that are most impacted
by that are the people who can least do anything about it. So people who are financially or socially
marginalized, that live in rental apartments, they don’t have access to the right sort of
roof shape, or the roof pipes in the wrong direction. They’re the ones that get caught
holding the bag and paying more and more for their electricity. So about that time I met
one of my co founders business partners, Jemma Green, who was doing a PhD on disruptive technologies. And she was kind of following a similar tangent.
She was looking at the development of sustainable housing having spent 10 years as a merchant
banker in London, she found her conscience. It was I was playing in another space. But Jemma was trying to kind of solve that
problem of in a strata development or a condominium development. If there are two people living
under a shared roof, we have to agree to put PV on the roof. You work all day from seven
to seven, so you don’t see the sun, I work from home, I get the benefit of your investment
in PV, so we can never agree to make. So Jemma was trying to create a technology
or a business model that allows us to separate the value of energy from the energy itself.
So if I’m at home all day, using your energy, at least I’m paying you for it. So you get
the benefit of being able to invest confidently in rooftop PV. Get the benefits of access to cheap energy,
even if you’re not around to use it because your neighbor is using your energy is paying
you for it. So I met Jemma while she was doing some research work, we realized we were looking
at two sides of the same problem. And what we were trying to do was turn the
the electricity network, whether it was a regulated network where I was playing or an
embedded network in housing development where she was working into a trading platform. And we looked around for a technology that
allowed us to verify the provenance of every kilowatt hour that entered the system. So
where it ended, who owned it will have a generated at what price and the only technology we can
find to do that was blockchain. And so we worked with some out there three other co
founders who are experts in blockchain development, power system regulation. And we kind of sat back and said, Well, we’ve
got an opportunity here to to change the way people buy and sell energy. We can create
an environment where access to low cost, low carbon energy is available to everybody, not
just people who can afford to put PV panels on their roof. And we sat back and said, well,
what is this industry has been doing the same thing the same way for the last hundred years. Do we have the appetite to try and really
change – disrupt – or disrupt and change change the way that people see how they generate
and and will get access to energy. And we kind of realized it was going to be
hard work, but it needed to happen. Because say that, you know, we were not actually disrupting
the industry here we’ve got in Australia, probably the one of the highest penetration
to distributed renewables in the world. Where I’m from in Perth it’s one in four households
in Adelaide, it’s one in three Brisbane, that one in three. So we’ve got a really deep penetration
of distributed PV. That’s the disruption. And because people are getting more and more
of their energy of their own roof, the cost of getting energy from the grid for everybody
else is going up. So that disruption is occurring. PowerLedger platform allows people who have
invested in distributed renewables to sell their access to their neighbors. So if your neighbor can’t afford to put PV
on his roof, or his roof faces the wrong way, or shaded by trade, whatever it is, he can
still get access to that low cost and low carbon energy by buying it from you. And you benefit because instead of just spilling
your energy to the grid or selling it to a retailer, you know, four or five or six cents
you can sell it to your neighbour at 20 cents. So you can monetize your excess capacity in
the same way airbnb allows you to monetize your spare room or Uber allows you to monetize
your car, we allow you to monetize your excess PV capacity by selling your energy to your
neighbors. And that model has has application around
the world. So whether it’s to neighbors selling energy to themselves, or it’s a a company
like our partners BCBG in Thailand who, who are deploying large scale PV across commercial
buildings, and using our platform to sell energy to the owners of those buildings and
giving the owners of those buildings the ability to sell their excess to their neighbors, it
doesn’t really matter. What we’re trying to do is give more and more
people access to low cost, low carbon energy right around the world. Low cost low carbon.
Now let me ask you one question before we go any further PV? What does it mean? Photovoltaics solar power. Okay so i wasn’t
meant to know that. It’s a trick question and everybody should know that. No PV is photovoltaic
so solar panels on your roof or in a larger scale solar panels on a shopping center. Or the massive warehouse space all around
exactly that exists is not being utilized right now. They’re sitting there underneath
this sunburnt nation generating power, but they’re not. So it’s all about sharing within
the community. Yeah. And renewables. Yeah. So we’re helping
the consumer, and we’re helping the planet. Yeah. Now. Here’s my question right? That’s
a wonderful call. Yeah, I love the idea. Right now, how are you finding it? I mean why should I get a kilowatthours are
important. We need to have coal power. But don’t get me wrong. I’m not for coal at all.
But we need to make sure that the lights stay on the hospital. We do need to have coal for now. I hope this
is what happens. It shifts and dies out and we see our renewables take over the wind,
solar, whatever it may be. Why not integrate both so everyone wins? So that’s exactly what we’re doing. So I have
I kind of bristle somebody says we need coal now, because I don’t think honestly don’t
think we do. Great I am glad to hear that. The challenge we’re trying to get to is not
a technology one, right. So the technology for what we’re talking about has been available
for a long time in terms of energy transactions, energy sharing, blockchain, not so much. But the ability to install distributed renewables
for storage for the switching around faults for automating your power system, creating
smart networks. Yeah, that’s technology that’s been around
for at least 15 years. The reasons why they haven’t proliferated because they’re bloody
expensive things to build. But now we’ve got consumers who are on mass
building them for us. What we don’t have is an economic model that says, Well, tell you
what, you’ve got some excess capacity, we’ve got a system need. So why don’t you let me take control of your
battery for a period of time, I’ll pay for it. But let me use your battery to provide
the sort of things that were traditionally needed coal-fired plant to provide. So when we look at coal-fired plant, we look
at traditionally the power system we look at it at a 30,000 foot view we look at all
the big units are in we look at all the customers, we don’t look down to the detail. We just see it as a system as it is when you
take that view of the system. Yeah, you need coal-fired plant because you need spinning
sitting inertia you need… Becasue that’s part of that system. You’re
creating a different system. Well, we’re taking the systems, the existing system, and we’re
fractionalize it. Yeah. I guess. So we’re not saying that we’re selling
energy on our system from from Sydney to Melbourne or from Melbourne to Brisbane. It’s from John
to Sandra. Yeah, across the street. And when you break it down to that level that
that smaller bite sized chunk, you don’t need heaps of spinning inertia to main power system
control or better quality or frequency. You can use a power electronics for that. You
can use energy storage, you can use your power wall, you can use a distributed battery. So we’re changing the way we look at the system
rather than being one big system here to a bunch of interconnected and dynamic distributed
systems where we can manage without any big spinning machine. And does it save, if you look at power stations,
right, they are very expensive devices to create and when they built for my understanding
you need to build in 15 20 years capacity ahead so we might only be using this much
of what is required now, but you’ve got to build it because it’s so damn expensive and
there’s they typically funded by governments as well. It’s our taxpayer money that’s being used
in the system is not going to work for a very long time and then when they get close to
capacity, they’ve got to spend the next 10 bloody years lobbying to get the next one
built and you constantly playing catch up. Now that’s our taxpayer money sitting there
idle caught coming out with a negative diminishing return we’re saying here is that we can actually
interconnect and have it electricity on demand. On demand. And you can grow as you can grow
your system as demand grows, you can grow incrementally. So instead of having to build it in 300 400
500 megawatt lumps and like you say, wait for us to catch up, like we can build it in
smaller scale. So you know, when I when I started in this
industry, I remember one of the first general managers I worked for is running the transmission
system patted me on the head and said, son this industry is about scale, the bigger you
might your power stations are the bigger you make your transmission systems, you know,
the lower unit cost, the lower losses make it bigger. And that that whole idea has just been turned
on. Its yes, because we can build it to scale. Instead of making one big risky multimillion
dollar investment, we can make thousands of low risk individual investments as individuals
to provide the same level of capacity without the risk without the risk of stranding without
the huge investment cost. And we can do that in a way that benefits
us as consumers and our neighbors and the people around us and the environment, as you
say. So the industry itself and the technology
that’s developed over the last 10 or 15 years has changed emphatically the way this industry
needs to look at itself. So the challenge isn’t technology anymore. The challenge is
cognitive. Can we conceive of an energy system that is
different to the one that we’ve we’ve had to use, or we’ve developed over the last hundred
years. So we are you finding that and you talked about, I think was in Thailand, you’re
talking about partners at Thailand. Are you finding that the government’s that you’re
working with at the moment are they open and receptive? Are they? Are they funding? Are they helping
and they open the door and saying we would love a solution here or you find the closing
the door in your face and going it ain’t broke let’s not fix it we get in the back hand is
perhaps you didn’t hear that here? You know what I mean. How? How much are they embracing this? So
depending on where we are, the level of embracing is either warm or very warm. Oh, good. So nobody would nobody can deny
that the past system that we run here in Australia is broken. It is in the news every week, it’s
in the news every week, consumers are paying more for it. They’re demanding a better quality
of supply, from reliability terms as well as cost as well as carbon. So when we’re working in an environment like
the one we’re in working, working with in Thailand with our partners there, the the
level of kind of entrenched maturity around the regulatory framework, there isn’t what
we’ve experienced. So we’ve been under this regulatory regime
or this regulatory glide path for a lot longer than some of the more developing economies.
So you’re Southeast Asia you’re Africa’s you’re India’s. So they’re, they’re kind of reliance or their
addiction to the existing regulatory framework just isn’t there. So we can propose a new
way of doing things you know, so kind of wedded to a particular faction. So, in the same way that mobile telephony
can have leapfrogged terrestrial telephone lines in parts of the developing economies,
we can do the same thing with with with the power systems and move away from large scale
interconnected systems to a series of dynamic distributed, integrated distribution systems
like we are in Thailand in a way that doesn’t confront. But even in Australia, we were running a program
in Perth at Smart Cities project that’s funded by the Commonwealth Government. So there is
a level of commitment to understanding how a new energy system can evolve how a new energy
economy can evolve. So nobody will tell you that the past is is
not broken. So we don’t need to fix it. What they’ll tell you is it’s broken, we’re not
sure how to fix it. And we’re looking at a range of ways that
can preserve the value of our existing system to preserve the value of the networks that
we’ve got there and all this big investment in a you know, what is a fundamentally an
economic asset, but at its core, a social asset as well. And we can preserve the value of those things
by rethinking the way we use them and the way we encourage consumers to invest in distributed
renewables to share the value of the excess capacity that they’ve got in a way that provides
a good economic outcome for them and incentivizes more and more people to take part in that
distributed energy economy. So listen from from one of the most successful
ICOs possibly the most successful I don’t know how we going to measure that but you
did very well on your raise. I remember was it December last year was August through October. I remember seeing it on the TV remember seeing
the press he did have you run a very tight campaign shall we say you hit all the right
channels so well done on that. But the rubber is hitting the road now. Yeah.
And what are we like to see on this show and interviewers speak to is people that are doing,
you’re not people to try to find solutions to fix you are doing. You’ve talked about
your Thailand partner you talked about as a Fremantle just now you expalined with the
Australian Government. What else has PowerLedger got in the pipeline that you are able to talk
about? Talk about? Sure. That so we’re working with
KEPCO in Japan’s a KEPCO is the Kansai power company. The biggest private utility in Japan.
And we’re working on a virtual powerpack project with them, you know, Osaka. We’ve got trading programs or trade trading
environments on both sides of the US, so in Chicago with Northwestern University as part
of a master’s in engineering program doing training across their Chicago campus. And one of the really exciting ones working
in Silicon Valley with Silicon Valley power in the city of Santa Clara, where it’s a derivative
of energy trading, we’re still using the base functionality of being able to identify where
every kilowatt hour came from. But we’re doing that in a way that allows
us to tie a the creation of a carbon credit if you like a low carbon fuel certification
credit to allow people who are charging EVs from purely renewable sources to participate
in a low carbon fuel substitution program in in California. And that’s cool for us taking a technology
we developed in Perth at you know the far reaches of the universe to a place like Silicon
Valley. And being noticed. And being noticed, and I think that’s, you
know, in the environment that we’re in, everything we do is, is under the glare of public scrutiny. It’s an interesting environment. The technology
we’re using is you know, it’s it’s, it’s cutting edge so that a lot of people are interested
in it for a whole range of reasons, but kind of the crypto side as well as the blockchain
technology, so and the renewables and the renewable side and it’s an industry that touches
all of us. So I think from that perspective, everything
we do feels like it’s in the spotlight. But we’ve never resolved from that fact we’ve
we’ve wanted this to the spotlight to pull on us to say that we’re we’re doing this thing
you know in a way that? Responsible too? It forces that on you, doesn’t it? It makes
sure that what you do you’re doing for the right reasons. So the people that are supporting
you can have some comfort that these guys, you know, we might make mistakes along the
way. But what we’re doing we intend to do for all
of the right reasons to support our supporters, and to fundamentally the change the way that
we enjoy our electricity. And so that’s, that’s really what we’re about making sure that low
cost low carbon energy is available to everybody. So what is the reason for the Token? So the
Token provides three things, it provides access to our software, it provides access to a pool
of cryptographic tokens that allow us to do that instant or latency-free transaction for
the value of energy, and it provides a prudential guarantee so that if you’re hosting a trading
environment, we require you to stake an element of POWR tokens, and they sit in escrow. You don’t lose them, you don’t you don’t sell
them, they’re yours, but you don’t have access to them for the period that you’re running
a trading environment. And so having them there presents your your energy traders who
you doing a run up. If you disappear with their money, we’ve got
your power tag and so provides that prudential guarantee, which is which is what happens
in a in a, in a traditional mature energy market. Big players are required provider
a bank guarantee or prudential guaranteed to cover their, their their trading exposure. Yeah. So it really mirrors that by using the
cryptographic currency to to provide that, that coverage. Wow! Well, I it’s been absolute
pleasure. I can’t believe we haven’t spoken prior to this. It’s great having you on the show. For those
of you who want to find out more about PowerLedger where do they find out? What can they plug
into? Powerledger.io we’ve got telegram groups.
You can follow us on Twitter, on Facebook and all the other social platforms but our
telegram groups are really well enough patronized against or or used and one of us is always
in it. So you know the questions come thick and fast
and I’ve asked before so this you know, the community answers a lot of yourselves. But
our community managers are always on hand and more often than not, there’s one of the
teams available answer questions as well. So we try and stay really in touch with our
community. So the telegram group, probably the best one. Excellent. Well, ladies and gentlemen, David Martin,
the CEO of PowerLedger, thank you so much for your time. Look forward to continuing
to watch your progress. And I wish you all the success in the world for so many reasons. So thank you – thank you again – very much
for your time. My pleasure. There you go guys. Have a great day! Bye for now. The Trader Cobb crypto podcast is hosted by
Craig Cobb. All Trader cobb courses, products and tools can be found at tradercobb.com because
experience matters.

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