Last week, energy startup EFFORCE, co-founded by Apple’s Steve Wozniak and billed as the first blockchain platform to securitize energy efficiency projects and financing, announced that its native utility token, WOZX, is now listed on the Gate.io exchange.
The debut of WOZX on Gate is the third such exchange rollout for EFFORCE’s Ethereum blockchain-based coin in recent weeks, following similar launches on exchanges HBTC and Bithumb Global.
EFFORCE cites figures from the International Energy Agency (IEA) that estimate the size of the global energy efficiency market at $241 billion and 10 percent growth rate per annum. Noting that more than two-thirds of global energy consumed is not currently covered by any efficiency energy standard, EFFORCE reckons the efficiency market is ripe for another $584 billion in global investment (yes, more than doubling) by 2025.
Per IEA and EFFORCE, the global transportation sector (particularly the automobile sector), which currently accounts for 36 percent of world energy consumption, is the first obvious target for energy efficiency investment. Manufacturing comes in second, with 23 percent of consumption, followed by the residential sector (particularly in Europe, and especially in the market for heating and domestic appliances) which represents 20 percent of global energy used.
Again, per EFFORCE, broad access to a tradable, decentralized market for energy efficiency investing has faced a number of significant barriers. Chief among these is the high initial cost of investment (would-be investors must commit a minimum of EUR 200,000, or roughly $244,000, to access existing networks).
Market access is also hampered by required technical knowledge of how energy systems and smart meters actually work; a lack of trust and absence of a marketplace for buyers and sellers to meet and facilitate price discovery; the difficulty of evaluating actual achievable savings on individual projects; difficulty in calculating returns on investment for financial institutions; and, finally, uncertainty regarding payback periods.
A new kind of energy derivatives market
According to EFFORCE, these barriers create a fundamental use case for blockchain, which can guarantee the integrity and uniqueness of the energy efficiency dataobtained through smart meters, and thereby allow for fractionalized investment in the energy saved.
The EFFORCE platform enables three groups of stakeholders to meet and trade: companies that undertake energy efficiency improvements in buildings or industrial processes, contributors who are repaid in WOZX tokens indexed to the energy savings (per kWh) generated by these improvements, and energy consumers (large and small) who use or buy these WOZX tokens.
WOZX token holders are able to participate in energy efficiency improvement projects by subscribing to EFFORCE’s Energy Performance Smart Contracts, which each represent 1 KWh of energy saved at a specific future time. Each of these project contracts must specify costs, percentage of savings share with contributors shared through the contract, contract duration, amount of savings generated, duration of the auction period, and intrinsic return of the operation.
“Energy efficiency projects offer a major opportunity to mitigate climate change and provide a direct reward mechanism, so we are excited to offer more tokens to more people around the world as EFFORCE takes off,” said Jacopo Visetti, Project Lead and Co-Founder at EFFORCE. “Since our first listing, we have moved quickly along our roadmap. We are now pleased to be on a third exchange. Public support for our mission has been massive, reflecting the value of bringing energy efficiency improvement projects to a broad audience.”
Notably, EFFORCE is only the second company that Steve Wozniak has co-founded, the first being Apple 45 years ago. For EFFORCE, he has partnered with a team of energy market veterans, His co-founded Jacopo Visetti previously founded Milan-based energy and environmental consulting firm AitherCO2, which has annual revenues of $240 million and no outside investment funding.