Introduction

The “Internet of Energy”: A Decentralized Payment & Tokenization Layer for The $10T Global Electric Utility Industry

Over $10T are paid in energy bills across the consumer and industrial sectors each year, making it one of the world’s largest sectors for day-to-day monetary transactions. With the rise of Advanced Metering Infrastructure (AMI) and Distributed Energy Resources (DERs), the current payment infrastructure is not fit for purpose. Legacy off-chain payment systems are not optimized for machine automated processes and smart devices such as electric vehicles, solar, batteries, and controllable thermostats. They lack the ability to tailor micropayments to the unique use cases that smart energy offers, and suffer from centralization, long winded settlements, and security issues when handling aggregated and virtualized distributed energy networks. Additionally, revenue grade metering infrastructures that serve as the basis for electric utility billing are increasingly being outpaced by time-series data, living within the customer sided DERs and smart-energy endpoints themselves:

This chart provides the basis that the world is moving from measuring and metering entire building consumption to sub-metering customer owned assets, that provide both consumption and production sides of the meter, necessitating a modernized and digital payment network.

However, whilst the likes of Ripple have developed solutions to enable the comparable rise of the on-chain banking industry, currently no decentralized on-chain payment layer is tailored to the much more bespoke needs of the energy utility sector in terms of a digital payment network for a consumer driven device, energy, and tokenized economy.

This is the problem that OpenVPP is designed to solve. OpenVPP is building the global “internet for energy,” which will allow energy utilities to harness decentralized, on-chain, 24/7 stablecoin-based accounting, usage tracking, and payment solutions optimized to the specific needs of different smart energy use cases.

OpenVPP has partnered with a world leading stablecoin issuer and a multi-billion dollar energy, power & utilities infrastructure provider (both to be announced upon launch) to provide a complete end-to-end decentralized payment layer for the energy economy. The solution is grounded in three key technical innovations: 1. Bespoke Stablecoin Payments Layer: Utilities can either integrate stablecoins into automated smart energy payment flows or wrap them into bespoke tokens customized for specific energy use cases via specialized oracles.

2. Decentralized Integration Layer for Distributed Energy Resources (DERs): A universal routing and integration layer that connects utilities with device providers through a decentralized point-to-point “DNS for DERs”. This allows both utilities and device providers to interact seamlessly without relying on centralized intermediaries.

Using this tech stack, utilities will be able to create tailored, decentralized payment flows specific to unique smart energy and DER use cases, intra-national regions, and international geographies. Simultaneously it creates a trust-layer for different utilities and device providers to financially interact without the security and privacy concerns of centralized systems.

During the most critical times, grid operators are able to aggregate, dispatch, and compensate the network, down to the device level, allowing for the creation of a global Virtual Power Plant (VPP). The entire multi-trillion dollar energy payments economy is about to come on-chain as OpenVPP serves as the regulatory compliant payments network and orchestration layer for energy assets.

3. Gas Abstraction For Seamless Utility End Customer Experience (CX): By design, electric utility customers are still far from utilizing mobile applications to access, read their metering, and pay their utility bills. We believe in a future where the electric utility experience will be mobile first where their accounts would be connected to a wallet app, although they alleviate the complexities needed for creating secure wallet access through an OAuth integration.

OpenVPP will serve as the regulated integration layer for a highly secure programmable wallets infrastructure into mobile first electric utility customer experiences, where utility customers gain access to all of their utility related billing information as well as upcoming and opting into customer programs.

All of the transactions that occur between electric utility end-customers with OpenVPP will feature gas abstraction. This alleviates the need for users to hold native tokens by paying gas fees with the native token involved in the utility program, either $OVPP or a Stablecoin. This works with 3 key features of the OpenVPP API: User OAuth gives permissions to sign transactions, Gas Sponsor, a relayer broadcasts the transaction on-chain and pays the gas in native tokens, and finally the payment for gas - OpenVPP on behalf of the customer can deduct the equivalent gas cost in $OVPP or Stablecoins (or potentially absorb if the electric utility acts as the sponsor based on the program) from the user’s balance.