W have seen some ICOs with some very big ambitions. The Zero Carbon Project is perhaps the biggest of them all: tackling global warming.
The white-paper gives depressingly familiar evidence that temperatures are continuing to rise and that extreme weather events are more common. Quoting from the Nature Climate Change journal, the authors suggest that it is unlikely that world temperatures will rise by less than 2 degrees by century’s end, and governments should plan for the 2-5 degree range.
“The likely range of global temperature increase is 2.0–4.9 °C, with median 3.2 °C and a 5% chance that it will be less than 2 °C.”
Not only does the world have a problem, but the obvious solution, renewable energy sources, also have a problem: they are still too expensive. Though they have declined in price, they are still relatively more costly than fossil fuel options. Whilst this remains the case there is little incentive for people to move towards renewable sources. What’s more, government subsidies are being reduced, so it will be years before renewables can outcompete fossil fuels.
The Zero Carbon Project works from the principle that it would be catastrophic to wait until renewables are cheap enough to encourage mass adoption. It plans to leverage international carbon credits and blockchain technology to reduce carbon emissions and provide electricity which is cheaper than both renewable sources and traditional fossil fuel-derived energy.
The white-paper goes out of its way to ensure that potential investors understand the risks and legal implications of the ICO. In fact, there are four pages of legal warnings before you get to the contents index page.
Throughout there is a reassuring awareness that an idea, or business, does not exist in isolation. Instead it is part of a legal and competitive landscape which is constantly being influenced by other actors. In addition to the legalities, the white-paper uses considerable space acknowledging its competitors and detailing how this proposition is different. The key distinction is the use of international carbon credits, allowing for immediate reductions in emissions.
International Carbon Credits
CER (Certified Emission Reduction) credits were introduced by the Clean Development Mechanism, set up by the 1997 Kyoto Protocol. Projects in developing countries which reduce emissions, for instance by preventing deforestation or closing a greenhouse gas-emitting factory, can earn CER. These may then be sold on international markets to buyers from the developed world who can use them to offset their carbon emission targets.
According to the Zero Carbon Project, “carbon offsets can reduce global carbon emissions for about 2% of the premium required to cover the cost of electricity from new local renewable energy projects.”
As part of the project’s due diligence, any energy suppliers on the platform must be able to show that their CERs come from reputable and transparent projects.
Zero Carbon Markets
The project aims to achieve a material reduction in CO2 emissions, which can only happen if customers embrace zero carbon energy. The individual’s incentives must be aligned with the planet’s; zero carbon energy must be cheaper than the alternative.
The ICO hopes to achieve lower prices through intense competition of suppliers bidding for customers. The Zero Carbon Market will list different suppliers’ offers and the customer then chooses the supplier they prefer. The supplier then provides zero carbon power, whether from a renewable source or by purchasing international carbon credits to offset the emissions.
Customers benefit from lower prices, while suppliers gain access to new customers.
The Energis token (NRG) has been designed to offer an added incentive to customers considering making a switch in energy contracts. All suppliers must pay transaction costs in NRG, guaranteeing buyers in the market and a value for the token. Some are also given to customers as rewards for certain behaviours — signing up, referring a friend etc — who may then hold them or sell them to buyers through a crypto-exchange.
The Zero Carbon Project roadmap is straightforward and does not make the mistake of predicting too far into the future.
This quarter will see the deployment of smart contracts, the release of the NRG token and the registration of UK suppliers. By the end of the year the ICO plans to have deployed those contracts, listed NRG on crypto exchanges and started the Zero Carbon Market in the UK.
2019 should see rolling launches into different energy markets. Australia, first, then Germany and parts of the US, before expansion to other major markets like France, Italy, Canada and Japan.
The project hopes to have a customer base of 30,000 households by the end of next year.
The core team for the Zero Carbon Project comes from Beond, an energy and carbon consultancy which “assists clients dealing with the complexities arising from the global climate change challenge and the consequential shift from a centralised fossil fuel economy to distributed clean tech market.” Most relevantly it helps “businesses save money by securing the best market prices for energy and helping them become more energy efficient.” Beond has over 600 customers in the UK including Salford County Council and Capita.
As might be hoped for, a deep understanding of the energy markets runs throughout the ICO team.
CEO Derek Myers leads Beond and is also the Chair of the West London Sustainability and Climate Change Commission. With a background in management consultancy he has been involved in the energy markets for two decades. Director Thomas Schmitz also has extensive experience in energy exchanges, running the London office of the European Energy Exchange as Head of Sales and Clearing.
As well as having experience in the technical side of the markets, the team has a decent amount of sector-specific sales and marketing expertise. Commercial Director Ian White is well versed in the energy industry, but from the perspective of client acquisition and management.
Unlike some ICOs, this one shows a healthy respect for the perhaps less glamorous but no less necessary aspects of running a business. Rob Antulov brings knowledge of startup financing and raising capital while Sarah Myers, former Director of Talent Management for Sky, provides vital HR experience.
The Zero Carbon Project ICO is also working with several high profile ICO consultants like Bok Consulting for smart contract development and auditing and Renowned and Co. for marketing.
This is a well-balanced team which is used to working together and full of relevant experience and expertise. In the areas where they have less direct know-how — for instance, smart contracts — they have brought in experts.
The Energis token is built on Ethereum ERC20 specifications and total supply is capped at 240 million. This will be distributed as follows:
- 15% retained by Beond
- 2% to team members and advisors
- 2.4% for bounties and bonuses
- 51.4% for the token sale
- 30% for the reward pool
Beond’s tokens will be kept in escrow and released 25% at a time. The first release will be after the main sale, with the following three coming at six month intervals.
There will be a private pre-sale, hard capped at $3 million. Any remaining tokens will offered in the first public pre-sale along with another 33,330,000 Energis tokens. Tokens will be priced at the ETH equivalent of $0.15. The main sale will consist of any Energis tokens remaining from the pre-sales, along with an extra 60,000,000 NRG. These will be priced at $0.20.
Any unsold tokens will be offered in a reserve token sale, occurring within a year of the end of the main sale and priced 20% than the exchange market price.
The bulk of the proceeds from the sale, 45%, will go towards marketing activities: paying for advertising, PR, events etc, with the rest allocated for operations, development and taxes.
Having NRG listed and liquid on cryptocurrency exchanges key to the proper functioning of the Energis ecosystem. Energy suppliers are buyers in the system, requiring Energis to pay for Zero Carbon Markets’ transaction fees.
According to the white-paper the team will make “commercially reasonable efforts to list the Energis tokens on the crypto-exchanges with most buyers, sellers, trading volumes and liquidity.” While traders are waiting for such listings they may trade on distributed exchanges.
There are 11 smart contracts in total, one for the Energis token, six related to the token sales, and four relating to the Energis economy. All can be seen on github.
The Zero Carbon Project have presented a very polished case with website, white-paper and other materials all professionally presented and well-communicated.
The ICO is present on all the expected social media platforms, although perhaps it has spread itself a little too thin. There is no good reason for it to have an Instagram profile, for instance, and it doesn’t seem to know what to do with it. However, it has used other channels to great effect, particularly YouTube and Medium.
In Myers they have a talented communicator who has been getting out in front of cameras and microphones to spread the message clearly and effectively.
As well as the clarity of their message, the Zero Carbon Project has carefully considered how it can acquire customers. Interestingly for an energy project it plans to market to cryptocurrency enthusiasts for its first adopters, hoping to attract them with the Energis token. Word of mouth plus referral awards should spread the customer base from there.
This is a knowledgeable and well-balanced team with years of experience in the markets they hope to disrupt. Their message of cheaper prices plus real environmental benefit is extremely powerful and should resonate widely, provided they can get potential customers’ attention.
As with any new project, particularly one of this scale, it is impossible to accurately predict success. However, the team’s depth of expertise in energy markets and the clarity of their message places the project on solid foundations.
Ratings Score Methodology: a weighted average across three scores: Concept (10% weight), Blockchain Fit (30% weight), Execution (60% weight).
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