Dear Green Power,

Open and transparent communication is at the core of our community efforts and this is why we believe that openly sharing due diligence information can serve as another great way for you to learn all details about WePower.

In the overview below we are sharing due diligence questions we’ve recently received from one of the top crypto funds along with the answers we’ve provided.

Enjoy reading and don’t forget to ask anything you want on our Telegram group.

1. Brief Logline of Your Solution

WePower is a green energy trading platform powered by blockchain and smart contracts. With WePower renewable energy producers can raise capital by issuing their own energy tokens while energy buyers and investors purchase energy upfront at reduced cost. Each energy token represents real energy.

2. Status of Your Product & Next Steps

WePower MVP was created in August 2017. It allows you to trade energy tokens on the Ethereum testnet environment.

In September 2017, a MoU was signed between WePower and Estonian electricity transmission system operator Elering, which has since evolved into an infrastructure integration pilot project starting in January 2018. During this pilot, our consumer platform (MVP product) will be integrated with the grid system. We will also test Ethereum Casper, EOS, NEM and a few other blockchains/protocols to determine the best fitting and scalable solutions for a large scale energy tokenization.

Alongside the grid integration pilot, we will start working with the necessary metering data integrations between our first customers in Spain and the Spanish wholesale market OMIE. We expect to launch our platform in Spain in November 2018. We have already secured commitments from 3 utility size energy producers. They have committed to to sell 200 million EUR worth of energy tokens on the WePower platform.

Last but not least, WePower has been admitted to the SBC Energy Accelerator, supported by Energy Australia. WePower will have a separate team operating in Australia starting in Q1 2018 focused on developing a proof of concept (POC) for the Australian energy system.

Next steps:

Finalise the opening of Spanish office;

Submit application to become an independent energy supplier in Spain;

Launch the pilot project with Elering;

Start accelerator program in Australia for the Australian POC development;

Launch operations in Australia and Spain after testing the platform with the first clients.

4. Market Problem & Size

WePowers solution will increase renewable energy adoption by creating a global platform that will help green energy project developers raise capital faster by selling their energy to consumers upfront at cheaper rates as well as fix energy grid inefficiencies associated with high renewable energy penetration. This is important because:

Banks and other institutional investors have recently started requiring higher debt to equity ratios for new green energy project financing. As a result, renewable energy producers face problems raising capital to build new projects and increase clean energy volumes in the market. We are solving this problem by innovating existing market with blockchain and smart contracts. Consumers will be able to buy energy directly from producers on a 1 kWh basis through smart contracts — energy tokens — allowing for bundling and micro-investing. This solution will also open global investment opportunities in the best green energy projects to everyone. As a result, WePower will accelerate non-subsidized, market-driven renewable green energy development and remove access barriers for those who want to invest in renewables in places where the environmental and regulatory conditions are favourable;

Energy grids needs better solutions to manage uneven energy production from the renewable resources. Through a data driven energy trading platform and energy grid integrations, WePower will eventually evolve into a Virtual Power plant with demand side response capabilities in place. This will create opportunities for a more efficient prediction and algorithmic energy trading, which will result in a much better utilization of energy grids given the uneven nature of energy production from renewable resources.

Global energy market figures:

24,756 TWh energy produced each year in total.

24,756,000,000 MWh energy produced from renewable sources.

Assuming the LEC (levelized energy cost) from solar and wind averages 50 EUR/MWh (most likely less costly), total market of energy production alone and sales is 1.24 trillion USD.

Current yearly investments in renewable energy amount to 242 billion USD.

5. Solution, Including Role of Token and Blockchain (i.e. what are the use cases for tokens in circulation? What can the tokens be used for? Why are tokens unequivocally required to solve your market problem? What affects supply and demand of tokens in the future?)

The WePower solution uses a two token system:

Internal Energy token;

WPR token.

The internal energy token represents a redeemable 1kWh of energy. It is created when a producer raises capital on the WePower platform and represents producers commitment to produce and deliver energy to the token holder. The energy (in the form of tokens) can be consumed by the retail market or sold on the wholesale market. Blockchain technology helps to innovate the currently existing Power Purchase Agreement (PPA) market, where agreements to produce and deliver energy for a fixed price are concluded for 10–15 years. This market is closed and only big companies participate in it (producers, big corporates and energy market market makers). It also lacks liquidity. By dividing each PPA to 1kWh PPA and putting it on the Blockchain, WePower disrupts this market by opening it to everyone (end users, speculators), providing liquidity and creating global access to capital for green development projects.

Moreover, the use of blockchain removes the need for WePower to be a trusted intermediary. It is practically not feasible to be a globally secure and trusted intermediary that trades renewable energy on a centralized database. Past practices show that buyers sometimes are mislead that they are buying clean energy because there is no transparent green energy accounting mechanism.

The WPR token is a versatile trading asset with two functions:

Auction priority. Each renewable energy producer sells energy tokens using an auction model on the WePower platform. During first the 48 hours only WPR token holders can participate in the auction and buy emitted energy tokens. WPR token holders can buy energy at the best initial price set by the auction holder proportional to the amount of WPR tokens he/she held. Note that WPR is not used to pay for the energy tokens. Auction model is crucial to attract traders and speculators to use the platform as each auction features a speculation opportunity. After the first 48 hours, everyone can join the auction;

Access to the green energy donation pool. All renewable energy producers will be required to directly donate 0.9% of energy tokens emitted on the WePower platform to the WPR token holders. WPR holders can use those energy tokens: i) for their energy consumption; ii) inter-platform trading or iii) selling to the wholesale market for a margin.

WePower Token Value Explainer

6. User Acquisition — How Do You Acquire First 1M Users?

WePower’s first clients are big renewable energy producers, energy market makers/commodity traders, investors investing into renewable energy projects. Trading volume is hence a better measure to assess platforms traction than the total number of users. WePower with the first clients will issue energy tokens worth 200 million EUR.

The financing model created by WePower incentivizes both producers and energy buyers to use WePower platform. WePower helps to increase ROE for the producers by 20–25%. This led to sign first clients (Conquista Solar, Civittas Projects, Novocorex) with 1 billion EUR worth solar energy development projects. On the other side, investors buy energy upfront for the reduced cost, which creates them IRR 17% annually. Because of these advantages, a large investment firm [confidential until mid-January] is going to use WePower platform. It is planning to deploy 2.1 billion EUR of capital into Spanish green projects within 2018 alone. The existing partnerships ensure project pipeline for two years and instant capital injection. The acquisition of clients will be based on direct sales principles because otherwise there would not be scale.

7. Please List Your Management Team Principals

WePower aims to empower the transition to 100% renewable and sustainable future with market constraints and opportunities taken into account. In order to achieve this, WePower must become a wildly successful company. This purpose is bigger than our personal goals. In our decision making — we always prioritize the business and its purpose above our personal goals, even if it means personally and emotionally difficult choices.

8. Please List Any Competitors Tackling Same Problem (and their strengths/ weaknesses)

Please read our recent article about energy landscape and WePower position.