© 2017-2018 power play energy gbr
TRANSCRIPT
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Legal Disclaimer
The purpose of this Whitepaper is to present Power Play Energy, its technology, business
model and the future PPE token to potential token holders in connection with the proposed
ICO. The information set forth below may not be exhaustive and does not imply any elements
of a contractual relationship. Its sole purpose is to provide relevant and reasonable
information to potential token holders in order to determine whether to undertake a
thorough analysis of the company with the intent of acquiring PPE tokens. All relevant legal
information is contained in the Token Purchase Terms and the Token Purchase Agreement.
This White Paper does not constitute an offer to sell or a solicitation of an offer to buy a
security in any jurisdiction in which it is unlawful to make such an offer or solicitation. Neither
the Liechtenstein’s FMA nor the United States Securities and Exchange Commission nor any
other foreign regulatory authority has approved an investment in the tokens.
The PPE token can be categorized as a security as it entitles token holders to exchange
tokens to shares of a future IPO. The token is, as such, subject to certain restrictions under US
security laws. The Power Play Energy ICO will be compliant with these rules and restricts
access for US-citizens, Greencard holders and residents of the US to the category of
“accredited investors”, pursuant to the US Security Act Regulation D Rule 506 (4). All relevant
legal information is contained in the Token Purchase Terms and the Token Purchase
Agreement.
Certain statements, estimates and financial information contained herein constitute forward-
looking statements or information. Such forward-looking statements or information concern
known and unknown risks and uncertainties, which may cause actual events or results to
differ materially from the estimates or the results implied or expressed in such forward-
looking statements.
This English-language Whitepaper is the primary official source of information about the PPE
token. The information contained herein may be translated into other languages from time to
time or may be used in the course of written or verbal communications with existing and
prospective community members, partners, etc. In the course of a translation or
communication like this, some of the information contained in this paper may be lost,
corrupted or misrepresented. The accuracy of such alternative communications cannot be
guaranteed. In the event of any conflicts or inconsistencies between such translations and
communications and this official English-language Whitepaper, the provisions of the original
English-language document shall prevail.
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Content Vision .................................................................................................................................................................................. - 4 -
The approach of Power Play Energy ................................................................................................................... - 5 -
Step I: The disruption of the energy market.............................................................................................. - 5 -
A - Technical approach .................................................................................................................................... - 6 -
B - Competition analysis .............................................................................................................................. - 11 -
C - Possible customer segments .............................................................................................................. - 12 -
D - Unique selling propositions ............................................................................................................ - 14 -
Step II: The disruption of energy trading ................................................................................................. - 16 -
A - Current energy trading.......................................................................................................................... - 16 -
B - Classic electricity trading ...................................................................................................................... - 18 -
C - What will the electricity market of the future look like?....................................................... - 19 -
D - What is a blockchain? ............................................................................................................................ - 21 -
E - What are the requirements for our blockchain for energy trading? .............................. - 23 -
F - The Power Play Energy trading software on blockchain basis........................................... - 23 -
G - Unique selling propositions ............................................................................................................ - 25 -
ICO Details .................................................................................................................................................................... - 27 -
Application of funds............................................................................................................................................ - 28 -
Future IPO ................................................................................................................................................................ - 28 -
Calculation & financing .......................................................................................................................................... - 29 -
Application of funds............................................................................................................................................ - 29 -
Finance planning................................................................................................................................................... - 29 -
Primary balancing power.................................................................................................................................. - 33 -
Industry partners................................................................................................................................................... - 33 -
The Team ....................................................................................................................................................................... - 35 -
The founders ........................................................................................................................................................... - 35 -
Other team members ......................................................................................................................................... - 37 -
Our advisers............................................................................................................................................................. - 38 -
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Vision
The 1-gigawatt project.
Digitalization and Industry 4.0 are essential to a successful energy turnaround, and this in
turn forms the basis for a sustainable economy and a green future.
In order to counteract the increasing volatility resulting from expansion of renewable
energies, we plan to install a total storage capacity of one gigawatt in several decentral ized
storage power plants and connect them together to form a virtual swarm power plant using
intelligent control software.
This enables us to store decentrally produced electricity from various renewable energy
sources and feed it into the power grid. We will on one hand, market our energy on the
energy balancing market, and on the other hand participate in energy trading on the EEX
platform using peak-shaving method.
In addition, we plan to develop a blockchain-based trading software that will allow every
market participant to trade electricity in a fully automated manner. This will be possible once
every user has a smart meter and our planned decentralized storage network has grown and
spread out. In the future, this will eliminate the need for an intermediary such as EEX or
another energy supplier, thus creating a benefit from the decreasing electricity prices due to
renewable energy sources.
Our goal is to break away from a centralized energy market and establish an automated and
intelligent solution to neutralize fluctuations and volatile generation and achieve price
advantages for all electricity customers.
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The approach of Power Play Energy
Step I: The disruption of the energy market
With the expansion of renewable energies, the fluctuation of the feed-ins, and thus, the
requirements for energy suppliers to coordinate these with the equally fluctuating
consumption side, are increasing. This is further aggravated when potentials are not used, ie.,
when wind power plants are shut down - although energy could still be generated and used
to prevent power failures potentially caused by an overcapacity of the power grid.
Our solution to this problem lies in creation of a network of battery storage power plants
which are decentralized, interconnected by intelligent control software and thus combined to
form a one virtual power plant.
Modern battery storage systems, when used as an interface between the volatile sources of
renewable energy and the transmission system operators, can offer several advantages in
stabilizing electricity network and reducing electricity prices in the future:
→ THEY ARE MUCH CHEAPER TO PURCHASE AND OPERATE THAN THE GAS AND PUMPED STORAGE
POWER PLANTS OTHERWISE USED.
→ THEIR REACTION TIMES ARE CONSIDERABLY SHORTER THAN THOSE OF ALL OTHER SOLUTIONS.
→ THE IMPACT ON THE ENVIRONMENT IS MINIMAL.
Our approach is to combine these advantages on an unprecedented scale. With a minimum
volume of 50 MWh, our large storage facilities will not only eclipse all previous storage
projects in Germany, but the combined swarm storage power plant with one gigawatt hour
(1,000 MWh) will also become the largest electricity storage facility in the world.
Our storage power plants can be easily built in densely populated areas and city centers.
They do not require lengthy planning procedures or public petitions, as the necessary
buildings can be integrated inconspicuously into any industrial site. Even large agricultural
halls can be used as well.
The swarm storage power plant will form the backbone of our future energy infrastructure.
These high storage capacities will eliminate the need for the very expensive and controversial
grid expansion and actively contribute to reducing electricity prices throughout Germany.
By using the Ifesca.AIVA AI software, already available to us, we will be able to connect our
decentralized storage power plants to form a virtual power plant. Using artificial intelligence,
we are able to perform data-based forecasting and optimization tasks in the shortest possible
time, thus reducing the complexity of managing electricity trading to a minimum. The high
degree of automation of the software allows intelligent workflows and creates efficient,
future-oriented software via modern interfaces.
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Through the constant expansion of the database, knowledge base and accompanied
extensive reporting, as well as, the fully automatic data analysis and forecast configuration,
this innovative system architecture guarantees the highest possible source of automation,
quality and flexibility.
A - Technical approach
The following schematic illustration shows the construction of a storage power station (SP S)
with an output of 500 kW and a battery storage of 1 MWh, which can be delivered in a 40-
foot container. The power unit (AIC) and the control unit are installed in the front part of the
container, while the individual batteries are installed in cabinets or shelves in the rear part.
Depending on battery type and climatic conditions, air conditioning/ventilation may be
required.
Figure: 500 kW/1 MWH storage power station (40')
Power section (Active Infeed Converter)
The AIC consists of bi-directional inverters which rectify the alternating and three-phase
current, to charge or discharge the batteries. This component is manufactured in Germany by
Batteries and Battery
Management System (BMS)
Air Conditioning
Control Unit
Access
Active Infeed
Converter (AIC)
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a well-known company which possesses many years of experience in this field and is active
worldwide as an OEM (Original Equipment Manufacturer) for companies such as Siemens.
Some technical features of the AIC are:
▪ Low ripple
▪ Galvanic isolation
▪ Battery current limit
▪ Power- and temperature-dependent fan control
▪ Load break DC
▪ Load break AC
▪ Low network perturbation due to PFC
▪ Input power factor λ = 1 (without reactive power specification)
▪ Parallel connection option
▪ Intelligent monitoring functions
▪ Suitable for any type of battery with appropriate battery management system
▪ Modbus TCP or Profibus interface to the control system
Control unit with control module
The control unit consists of a control module for regulating charging, discharging and
standby operations. In addition, measuring and counting devices and components for remote
monitoring can be integrated according to purpose and requirements.
This allows communication channels with other service providers and network operators to
be opened, e.g. to participate in the energy balancing market or arbitrage trading.
Working part (battery part with battery management system)
The working part provides the work in kilowatt hours and thus provides the "range". By
expanding battery capacity to additional containers, self-sufficiency can be considerably
expanded as well. The battery management system (BMS) is also located here. It is used to
diagnose and monitor each battery individually and control the charging and discharging
processes. This ensures protection against overcharging and deep discharge. The BMS also
provides information on the state of charge, the instantaneous current and the respective cell
voltage.
Stationary energy storage units at Power Play Energy are designed with the lithium-iron
phosphate battery type (LiFePo4). The following advantages play a role here:
▪ Longevity
▪ Cycle stability
▪ Security
▪ Energy density
▪ Pricing level
▪ High-current capability
▪ Temperature behavior
▪ Gas-tightness
▪ Low maintenance requirements
- 8 -
These cell types have long since proven themselves in a wide range of applications. Thanks to
industrial mass production, their purchase price is very low. Taking into account all usage and
service life parameters, a high-quality and durable LiFePO cell is one of the most cost-
effective ways to minimize the cost per kWh of stored energy. The cells are provided by a
reliable supplier in China.
Power Play Energy closely monitors the market in order to identify possible alternatives at an
early stage. Lead crystal batteries or lithium titanite batteries could be used as alternatives in
the future, as each technology offers advantages in specific areas. Depending on the stage of
development and economic efficiency, future developments are included in the planning.
Applications and benefits of battery storage
Due to its modular design, there are many possible applications which depending on the
relevance for the company, can be subdivided into direct and indirect benefits. Direct
benefits relate to reducing electricity procurement costs, improving power quality and
integrating additional generation plants. Indirect advantages include generation of additional
income either by using the energy or making the capacities available to the network
operators.
The main focus of Power Play Energy's activities is the provision of large megawatt storage
units in the power range from 40 kW to >1 MW for network operators and consumers in the
industrial and commercial sector. For these target groups, the focus is on reducing current
electricity procurement costs, securing supply and flexibility for future developments.
ELECTRICITY TAX
§9 Tax exemptions, tax reductions of the Electricity Tax Act regulate the electricity tax
exemption for the generation of electricity for one’s own supply, in the spatial context and
the maximum output of the system of 2 MW. For example, it is possible to reclaim from the
main customs office the electricity tax for self-generated electricity. However, this savings
potential only opens up to you if you are an energy-intensive manufacturing business and
are not already exempt from electricity tax.
The electricity tax is currently 2.05 cents/kWh and can also be included in the calculation of
the efficiency of the SPS.
PEAK SHAVING / PEAK LOAD MANAGEMENT
Another possible application of a battery storage power station is the cutting of consumption
peaks in a supply network. The power section and the storage volume must be positioned in
such a way that the battery storage is able to absorb all the electrical work over the
respective period of time in high-performance phases. The savings and revenue potential
depend significantly on the characteristics and volatility of the to be compensated
consumption curve. High and short-term peak loads offer great potential for savings. The
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clever integration of volatile generation units also allows savings potentials to be achieved in
consumption load profiles, e.g. in three-shift operation.
The costs of purchasing services varies greatly from one distribution grid operator to another
and ranges from 60 Euro/kW to well over 100 Euro/kW. Thus, the estimation of the possible
savings by reducing the load peaks depends on the individual case.
With the SPS, costs can be sustainably reduced by making use of price differences through
waiving or shifting electricity purchases. On the spot market, price differences of over 50
Euro/MWh are not uncommon. By means of smart metering and load-variable, or even only
daytime-dependent tariffs, it is possible to react individually to price signals and avoid power
consumption during peak-price periods as far as possible.
Due to the delays in network expansion, the transmission system operators (TSOs) are
increasingly intervening. Controllable consumption can be a cost-efficient instrument for
stabilizing the network and thus generate additional revenue, as long as the consumption
curve and storage capacity allow it. However, the minimum load size of 50 MW can only be
achieved via a pool.
INTEGRATION OF OTHER GENERATION PLANTS
A battery storage allows for connection and active control of other power generation systems
such as PV, wind and combined heat and power plants (CHP). Depending on demand and
electricity market conditions, it will be decided whether the electricity is fed into the grid or
the storage facility, or whether immediate consumption might be more advantageous. New
plants can be connected just as easily as existing plants.
The special feature of the SPS and worth mentioning is the ability to actively control the
entire system. Often, other generation systems can only be connected on the DC side (direct
current) and are dependent on an external source for their functionality. If, for example,
several CHP units are in operation, it is possible with the SPS to operate them completely
independently (island network), but also in parallel with the network. No complex
synchronization between them is necessary, as they are decoupled via the AIC.
This allows the self-sufficiency rate to increase, even though the grid connection capacity
would normally not allow it or a new transformer, with a higher output, would have to be
purchased.
UNINTERRUPTIBLE POWER SUPPLY (UPS)
The UPS is intended to bridge short supply gaps until emergency power systems are up and
running or to enable sensitive loads to be switched off in the event of longer outages. UPS
with batteries are considered to be state- of the- art technology, but the combination with a
SPS is new and unique. In particular, the controlled shutdown of production plants and
machines can facilitate restarting and avoid costs due to shortage production. For operators
who must have a UPS (hospitals, data centers, etc.), the SPS can reduce replacement
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investments in emergency power generators, if these can afterwards be made obsolete.
Existing natural gas CHP plants, which are actually used for heating supply and feeding
electricity into the grid, can increase the self-sufficiency rate and be used for emergency
power supply.
PARTICIPATION IN ELECTRICITY TRADING
Participation in electricity trading is already possible today. Arbitrage trading suggests buying
cheap electricity and selling it later at better prices. The Power Play Energy SPS has the
necessary powerful batteries installed. Another interesting feature is the short-term
compensation for forecast errors in the feed-in or load profiles, which can significantly reduce
the costs of control energy.
POWER QUALITY
As already explained, the power drawn from the network or from other generators is directly
fed into the AIC, constantly converted into "digitized" alternating electricity or generated
anew. Thus, the potential consumers are separated from the supply network and receive
"pure current" with a specified frequency and voltage on a permanent basis. In combination
with the compensation of reactive current, the power consumption is reduced, and the
consumers no longer have to be selected according to apparent power, but according to the
actual active power required. This leads to lower operating and investment costs.
OFFERING NETWORK AND SYSTEM SERVICES
The term system service refers to the use of electrical generation flexibility for voltage and
frequency maintenance in a supply network. So far, these have been provided by large
thermal and hydraulic generating plants. In the course of the energy transition, alternative
providers must offer these necessary system services.
FREQUENCY HOLDING
Grid frequency is a key factor in electrical power generation. Frequency is the change in
direction of the current flow in an AC. The frequency is directly linked to the speed of rotation
of generators. Most importantly, frequency is not a fixed value. Keeping and guaranteeing a
constant grid frequency is a challenge and most popular system service. It is obtained in
relation to the responsible transmission grid operator - by retrieval of control power
subdivided into:
→ PRIMARY BALANCING POWER (PBP)
→ SECONDARY RESERVE POWER (SRP)
→ MINUTE RESERVE (TERTIARY RESERVE POWER)
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But, as this responsibility is increasingly being transferred to the distribution grid operators,
new models will be created here which will be relevant for battery storage power plants.
Due to its characteristic fast reactivity, the battery storage is essentially predestined for
offering primary control power. However, an application in the area of secondary reserve
capacity is also conceivable and depends on the economic conditions.
The demand for PBPs is currently constant at 783 MW. Battery storage capacity has increased
from approximately 1 MW in 2012 to 27 MW in 2015 and more than 100 MW are planned.
At present, offers must be submitted to SRP and PBP on a weekly basis. However, it is already
possible for service providers to pool the standard service capacities and act as one provider
and responsible entity to the TSO. This would allow battery storage units to offer parts of the
storage capacity in a time-flexible manner.
REACTIVE POWER PROVISION
In order to keep the voltage in the supply networks within the specified limits, a locally
controlled reactive power balance is required. Decentralized generation plants can take over
this task from conventional power plants. This applies in particular to wind turbines operating
in the high-voltage level. This are is not really interesting for battery storage due to the
required information and communication technology (Deutsche Energie-Agentur - dena,
2014).
BLACK-START CAPABILITY
Although the expansion of renewable energies is often used for blackout scenarios, the risk
of malfunctions in parts of the system or the overall system is rather low. Black-start-capable
power plants administer their own requirements independently of the grid and thus enable
the start-up of further power plants. Each TSO is responsible for the contracting and so far,
the existing pumped storage facilities, have served as the first contracting parties. In the
future, it will be possible to contribute to network reconstruction via local battery storage in
the distribution network.
However, there exist challenges. The necessary communication structures and critical mass
required to be able to negotiate with the TSOs, are problematic. Pooling, just as with
standard power, could be a possibility if it were not for the costs. These have ranged between
five and ten million euros per year in recent years (according to the BNetzA (Federal Network
Agency), making this market segment inferior.
B - Competition analysis
Battery storage power stations
There are currently several battery storage power stations in Germany of which only three are
in a power class of >10MW and only one in the class >50MW. So far, these power stations
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have been mainly used for marketing on the energy balancing market. A holistic marketing
approach is not evident there.
The cluster approach, prioritized by Power Play Energy, with its several power plants
distributed at strategically important points in the German power grid, is new and not
covered by any competitor. According to our market research, a blockchain solution for
automated electricity trading which includes IOT integration does not currently exist on the
market.
Pumped-storage power plants
In Germany, the maximum number of pumped-storage power plants has already been
reached and new projects cannot currently be implemented. Several factors are responsible
for this: massive interference in the environment, public protests, etc. The current marketing
situation of pumped-storage power plants is also not appealing as it requires high levels of
man power and therefore is too expensive.
Gas-fired power plants
Gas-fired power plants possess limited flexibility during operation. The operating flexibility is
often constrained by the flexibility of the gas inflow. One key to a turbine's fuel-to-power
efficiency is the temperature at which it operates. Gas-fired power plants require an
appropriate preparation time (several hours to days) to begin at the cold start process. At
the moment, as a result of the low electricity vs. high gas prices, they are unprofitable and
undesirable with even relatively new plants being partly shut down or rather transferred to
the cold reserve. However, this process still requires running costs.
Power-to-Gas
In principle, power-to-gas solution offers a good alternative but at the moment the
technology has not yet matured beyond the prototype stage. There is no nationwide
marketing and furthermore, these plants have an infrastructural problem.
At the locations where excess electricity is generated, a gas network into which the recovered
gas could be fed, is not always available. This results in additional costs to integrate the
process into the current supply structure.
C - Possible customer segments
Wind farms
Several thousand wind turbines in Germany will be marketed directly on the electricity
trading market or possibly phased out in the next decade when their funding through state
subsidies expires. Should there be no visible increase in price of electricity in the next
decade, the high costs will result in demise of most of the wind turbines with only a few
plants being able to hold their own in a market without the subsidies.
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The most important point is the electricity price from 2021. The old wind turbines, which have
been connected to the grid for 20 years or more, will lose their subsidies under the
Renewable Energy Sources Act (EEG), but not their operating license. They could continue to
operate if marketing remained economical. However, like all older machines, wind power
plants suffer from wear and tear and after 20 years of use will most likely require repairs and
be more maintenance-intensive than new machines. Their operating costs will rise and should
the current electricity price of around three cents per kilowatt hour continue, they will not be
able to compete on the market and stay in operation without the subsidy privileges
In the first year alone, 5,700 wind turbines with an output of 4,500 megawatts will no longer
be eligible for funding. In each of the following years, this will be 2,000 to 3,000 megawatts.
The German Wind Energy Association estimates that around 14,000 megawatts of installed
capacity will hang in the balance by 2023. That would be more than a quarter of the currently
installed wind energy capacity on land, which would be eliminated for the time being.
With our storage solutions we can offer these wind farms a reliable alternative by purchasing
their entire produced electricity at a fixed price over the long term and distribute it further at
favorable prices via our own network of industrial companies in the region. In addition, we
can ensure that peak loads are balanced and that power production at the feed-in point is
homogenized. Revenues will be generated via system services and direct marketing.
Industrial businesses
Another customer segment of Power Play Energy are companies that have relatively high-
power consumption but have not yet benefited from the special equalization regulation to
reduce the EEG levy.
By combining wind farms, PV systems, our own power grids and battery storage power
plants, we can offer these companies an electricity tariff that is up to 30% lower than that of
their previous suppliers. In addition, the supply security and quality of the electricity is
increased.
With that, it is only of secondary importance whether the offer is taken up by a single large
customer or several medium-sized customers within an industrial or commercial area. Power
Play Energy feeds into the local supply network and settles directly with the industrial end
user. Due to the planned size of our storage facilities, the target group's consumption wil l be
in the megawatt range (>5 MW).
Power grid operators
In order to be able to compensate for fluctuations in their respective grid sections, power
grid operators must purchase corresponding control energy capacity on the market. The
volume of required capacity is estimated at about 3000 MW per week for the European and
about 750 MW per week for the German market.
In contrast to all other solutions, battery storage systems offer the great advantage of being
able to release and absorb energy in fractions of a second, while gas-fired power plants, for
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example, can only achieve this in a smaller range and in running condition. In addition,
conversion measures are necessary in advance. The number of fluctuations continues to
increase as more renewable energy systems with very volatile feed-ins are added. Even at
lower distribution levels, it is necessary to correct the current flows in both delivery directions
in the future. Power Play Energy's battery storage systems cover a broad field of business in
this area. Billing, settlement and delivery are carried out via the blockchain technology.
Small producers
Small producers are becoming increasingly important. Already today, more and more
households in Germany own a PV system on their own roof. Older plants usually feed the
entire electricity produced into the local supply grid due to the high EEG reimbursement.
Newer, recently built plants, are mainly used to optimize their own consumption. This results
that there is seasonal excess and under-supply which must be handled in the grid.
Particularly, as, for the first plants, the remuneration under the EEG will cease to apply in the
coming years. These quantities will have to be distributed in the local network and
compensated financially. In order to process this large number of contracts, a block chain
technology and a large storage system are required. The latter serves to guarantee security of
supply. Power Play Energy is able to map and implement such a marketing construct. The
turnover to be generated is enormous.
D - Unique selling propositions
→ FLEXIBILITY
We consider the idea of Industry 4.0 as a key driver for tapping potentials for
improvements in the energy market. The term covers intelligent, horizontal and
vertical networking of people, machines and ICT systems for the dynamic
management of complex systems.
With Power Play Energy, we manage to combine any number of decentralized storage
units, equipped with semi-autonomous software, into one unit in the form of a virtual
power plant.
→ STABILITY
Taking into account unused storage potential on the one hand and the ability to take
energy from the power grid for interim storage on the other, we will be able to
significantly reduce grid instabilities in the future and smooth out the currently highly
fluctuating electricity prices. With this, we not only create the technical conditions for
a supply with 100% renewable energies, but also reduce the EEG levy.
→ SCALABILITY
To realize our power plants, we use standardized components that simplify any
scalability. Thanks to our intelligent software and the technical equipment of the
storage power plants, we are also able to cover the demand on a large scale and in a
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decentralized manner with a minimum of personnel, from small autonomous battery
parks to large swarm power plants.
→ GROWTH
With the help of our reinvestment strategy, we can exploit the market potential within
a short period of time and constantly expand our market shares.
→ MOBILITY
As fully configured modules, our power plants, also in the form of PPE boxes, can be
transported to any desired location, installed and connected within a few days.
Depending on requirements, it is possible to adapt the individual modules to the
specific application and therefore be able to offer them special solutions for every
purpose. Each of our industrial partners receives a tailor-made battery storage power
plant.
- 16 -
Step II: The disruption of energy trading
A - Current energy trading
The 1998 amendment to the Energy Act liberalized both the electricity and gas markets.
Previously, electricity and gas supplies were regarded as natural monopolies. Utilities became
electricity generators and consumers became customers. Today, the monopoly position is
limited to transport and distribution, i.e. local distribution networks and supra-regional
transmission networks.
Due to the multiple interconnection of the German and European power grid, one can speak
of a "lake of electricity" or a large copper plate, which makes it possible to feed in electricity
at any place and to withdraw it again at any other place.
From this basic constellation and the physical reality that electricity can currently only be
stored to a very limited extent, various trading relationships, constellations and products have
been developed between the respective market participants in the years since this time.
Market participants:
→ EXCHANGES (e.g. EEX, EPEX, ...) represent the marketplace for traded electricity and gas
products. One will find them in almost every European country but with different
levels of liquidity. They act as a market price indicator for the individual electricity
trading products, as each electricity product traded is assigned a clear price in the
respective trading period. These marketplaces are monitored by national regulators.
→ BROKERS provide separate trading platforms on which traders can bilaterally offer or
buy electricity. Traders can operate both on exchanges and on OTC markets. In
contrast to the stock exchanges, it is not necessarily required to contract every
quantity offered at the offered price.
→ CLEARING HOUSES carry out the financial and physical settlement of energy
transactions and are usually affiliated to one or more exchanges. In the event of a
participant's default, the clearing house enters as a market participant and procures
the defaulting delivery quantity or compensates for the payment defaults. It acts kind
of as a insurance for the trading business.
→ GENERATORS are electricity producers of any kind. They include operators of
photovoltaic plants, wind farms and biogas plants, as well as block heating, gas, coal
and nuclear power plants. All of them supply electricity to the market, but at different
production costs and at different production times.
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→ TRADERS buy energy contracts from producers on the wholesale market and sell them
on to other traders and suppliers. Its radius of action does not refer exclusively to
Germany but is rather a Europe-wide marketplace. It is quite normal that the
respective products are traded many times over before they finally reach the
consumer.
→ OTC TRADING means the settlement of transactions directly with the counterparty.
OTC stands for "Over the Counter". When we talk about OTC trading, we mean that
the purchase and sale of electricity is carried out outside the exchange and that price
and quantity can therefore be negotiated individually. However, prices are based on
the exchange prices.
→ STANDARDIZATION COMMITTEES define the framework conditions and regulations for
energy trading. The institutions are associations of TSOs in the electricity and gas
sectors.
→ The TRANSMISSION SYSTEM OPERATOR (TSO) is responsible for the operation of the
transport grid at extra-high voltage level (electricity highway). Thus, they are
responsible for the reliable transport of electrical energy from A to B in the respective
region. They maintain the associated technical facilities and coordinate the feed-ins
and withdrawals. This includes frequency regulation and voltage maintenance (in
cooperation with other TSOs) and the procurement of the necessary control energy.
→ Most end consumers are supplied with electrical energy or natural gas via distribution
networks. Their operators are referred to as DISTRIBUTION NETWORK OPERATORS. These
are partly large energy supply companies, but often also municipal utilities as
companies owned by municipalities. They are usually the respective base supplier. In
the case of electrical distribution networks, the main focus is on the medium and low
voltage levels, although distribution network operators can, in sections, also operate
lines at higher voltage levels.
Products:
→ In INTRADAY TRADING - short-term electricity trading - electricity deliveries are
generally traded in both 15-minute and hour blocks for the current day; trading of
larger blocks is also possible.
A position can be traded up to 30 minutes before it matures.
- 18 -
→ The SPOT MARKET is used to optimize supply and demand for usually the next day. The
day is divided into its 24 hours and a unique price is assigned to each hourly contract.
The special feature is - every quantity offered receives its individual price.
So, if a power plant supplier or consumer has not yet sold or bought its output on the
futures market, the electricity is offered and traded on the spot market.
→ At the so-called FUTURES MARKET, the electricity is traded for the next years, quarters
and months. This long-term electricity trading usually works with so-called futures and
forwards:
These specify that a certain quantity of electricity is to be purchased or supplied at a
fixed price in a future delivery period. Futures and forwards are standardized energy
contracts traded on an exchange or OTC market.
→ In YESTERDAY TRADING, B2B contracts are traded between two market participants
whose settlement period was already one day ago. Market participants trade non-
contracted volumes (mostly forecast deviations or delivery defaults) at bilaterally
negotiated prices.
B - Classic electricity trading
Almost all transactions in energy trading are classic B2B processes whose place of execution
and type can be very different. Thus, different trading or stock exchange platforms are
available to the respective traders.
Many different, but mostly standardized products can be traded between the individua l
market participants. There are long-term contracts such as the annual, quarterly or monthly
base loads and peak loads traded on the futures market. In the short-term area, day-ahead
and intraday contracts as well as individual hours are traded.
Products on the futures market can be divided into physical and financial products. The
former are subject to a delivery obligation, the later are derivative products such as options
or swap transactions. These are primarily used to hedge physical deliveries against price
fluctuations.
A trading transaction on a broker's platform is concluded when trader A and trader B agree
on the quantity, period and price of an electricity supply. They document this demonstrably
by exchanging trade data via a defined channel (fax, mail). The data is then transferred to the
relevant trading system and credited to the relevant portfolio. As there is no leading system
in trading, the verification of the individual transactions is based on the eCM standard
(electronic Confirmation Matching) of the European Federation of Energy Traders (EFET).
If both parties agree on exchange-based clearing, the trading data is settled via an exchange-
based clearing house. In OTC clearing, a broker transfers the trading data to his book. In any
case, the default risk of one of the two parties is reduced.
- 19 -
Depending on the number of market participants - many of whom also trade with each other
several times - a large amount of trading data is generated which must be processed and
linked together by the existing IT systems.
Once the transactions have been completed and the physical delivery has taken place, this is
carried out in a standardized procedure, the timetable management. The created timetable
documents the supply or purchase of electricity via the respective supply grid to the
transmission system operator. In the total balance of the sum of all deliveries and purchases,
the balance must be zero in each 15-minute interval – therefore the timetable must be
balanced. If this is not the case, the TSO rejects it and does not recognize it. Traders - or their
IT systems - must be able to create and send these schedules reliably and in an up-to-date
manner on the wholesale market. For transactions executed on the exchange, the clearing
house partially assumes this task. However, this also incurs fees that are not worthwhile for
smaller merchants. If electricity is traded in smaller quantities at lower distribution levels, such
B2B business is not yet profitable today.
Once the timetables have been drawn up, sent and confirmed by the TSO between all market
participants, the electricity product ordered is physically delivered or received. Ideally, this
means that all generators produce exactly the electricity that was indicated in their
timetables. In return, all consumers only use the electricity that they indicated in their
timetables. In reality, of course, this cannot be achieved. For example, faulty weather
forecasts, power plant malfunctions or even failures and deviating consumption patterns lead
to physical deviations in the timetables. To a certain extent, these can be offset by intraday
trading or in the short term by the TSO, which is done in form of control energy.
The TSO calls up power plant capacities at different intervals (30 seconds to >60 minutes)
depending on the need. The power plant capacities are provided as reserve capacity or
reserves by market participants in the control energy market against payment. There are
three types of reserve capacities that are also remunerated differently.
The prices for the control energy are determined by the TSO in a bidding procedure by
tendering the required reserve quantities for the respective time units. The TSO purchases the
control energy capacity from the suppliers and invoices the traders about the schedule
deviations according to the originator. Afterwards the variances are calculated subsequently
using the meter readings.
C - What will the electricity market of the future look like?
What are the current and future developments in the electricity market and why is the topic
of "blockchain" so interesting for the electricity market in its current or future form?
With the increasing production of renewable energies and the associated progress of the
energy transition, the way of electricity trading has changed greatly. The basic mechanisms
have remained, but their chronologically coordinated terminology and the generation
structure have shifted, causing price shifts due to oversupply of electricity at certain times of
the day and night. For example, on very sunny days in the midday hours, there is an
enormous drop in prices on the stock markets. The reason for this are the many PV systems
- 20 -
that reach their maximum production in the middle of the day at the highest position of the
sun and thus throw an oversupply of electricity onto the market. A similar phenomenon is
experienced on low load days such as Sundays and holidays. Consumption is very low during
these times. If the weather situation then gears towards sunny with a lot of wind, it can be
assumed that the oversupply of electricity is so high that it can lead to negative prices on the
stock market. In the simplest case, this means that a consumer receives money if he increases
his consumption or, conversely, a supplier has to pay money to sell his electricity on the
market.
As a result of these trends, a shift from the futures market to the spot market can be noted.
The volatility of power generation and use means that price hedging in large quantities is
becoming less and less profitable on the futures market in the long term. Traders are now
tending to contract volumes on the spot market at more favorable prices. In addition,
electricity prices will fall on average due to very low marginal costs for PV and wind energy
and the high and rising share of renewable energies. It is therefore increasingly lucrative for
traders to procure their electricity volumes on the spot markets.
This also results in a reduction in transaction volumes and a simultaneous increase in the
frequency of transactions. Overall, we are therefore registering an increasing number of
smaller volumes traded at short notice at reduced prices. If transaction costs do not fall at the
same time as quantity increases, trading becomes a loss-making business. Some trading
companies are already unprofitable today.
A driving factor here are the costs incurred internally. As the number of transactions
increases, so does the volume of data and thus the investment in the necessary IT structures.
Further costs arise for:
→ THE TRADERS THEMSELVES
→ THE LEGAL DEPARTMENTS
→ THE FRONT OFFICE (TRADE)
→ THE MIDDLE OFFICE
→ THE BACK OFFICE (TIMETABLE MANAGEMENT)
But also, external costs from trades, brokers or trading licenses and clearing fees put specific
pressure on the margins of the individual transactions.
In addition, another trend is noticeable that describes a shift in the task of distributing
energy. So far, only the transactions and prices on the wholesale market have been examined.
In this case, the TSO is the general coordinator of electricity supplies. With increasing
expansion of renewable energies, feed-ins take place at the distribution grid level. The
distribution of energy is also increasingly taking place in the regional area. This can lead to
overload situations in the transmission grid between the distribution grids in individual
regions.
As a result, the role of the TSO is increasingly being transferred to the role of the distribution
system operator. Consequently, tasks that the TSO had previously held are increasingly being
transferred to the distribution system operators. This applies not only to the transport of
- 21 -
energy but also to the compensation of power fluctuations in the regional distribution
network. Thus, in the future, the system service providing control energy lies in the
responsibility of the distribution grid operators and these to a varying degree depend on the
frequency of the grid. Generation plants and consumers are controlled remotely to provide
compensation in the local network.
Currently, small and medium-sized plants participate in the constellation of pooling in the
market for balancing energy or intraday trading. The pool operator offers the service to the
TSO. This construct results from the system of the central energy distribution. However, if a
liberalized micro-trade in the future is established in the lower distribution networks, small
producers in the distribution network can sell their energy to consumers with whom they
have agreed on a price. Flexibility can therefore be called up locally without having to t ravel
the long way via the TSO.
In order for this system to become economical, however, it requires an infrastructure which
reduces the costs even further for the relatively small-scale transactions in the distribution
network.
If we assume that in a few years we will be in a network of countless producers and
consumers entering bilateral electricity supply relationships with each other, we know that
our present IT systems will not be able to sustain these requirements. Higher real-time
requirements, updating software systems during operation, ensuring 100% availability while
at the same time forcing cost reduction and the overall goal of supply security, require a new
approach in evaluating and planning of IT infrastructures.
Small producers cannot be expected to draw up a daily timetable for the delivery of their
energy quantities and report it to the TSO. On the contrary - if these tasks are not carried out
with the right care, the security of supply would be jeopardized.
To conclude, it can be said that huge amounts of data will be exchanged in various directions
in future energy trading and the result in changes within administration and implementation
processes. Each process is individual. If very small quantities are to be traded, exchanged and
paid for in real time at very low prices and with guaranteed supply security, this will only be
possible using a new IT structure such as the BLOCKCHAIN.
D - What is a blockchain?
A blockchain is a continuously growing list of data sets called blocks that are li nked and
secured by cryptography. Each block typically contains a cryptographic hash - a so-called
encryption value - of the previous block, a timestamp and transaction data. A blockchain is
inherently resistant to any data modification. It is an open, distributed node book (distributed
ledger) that can efficiently, transparently and permanently record transactions between two
parties. For use as a distributed node book, a block chain is typically managed by a peer -to-
peer network that collectively adheres to a protocol for validating new blocks. Once recorded,
the data in any given block cannot be changed retroactively without changing all subsequent
blocks, which requires a network majority agreement.
- 22 -
Blockchains are secure in concept and an example of a distributed computer systems with
high Byzantine fault tolerance; a decentralized consensus is created. This makes blockchains
potentially suitable for recording events, medical records and other file management
activities, such as identity management, transaction tracking, origin documentation, food
traceability or elections.
- 23 -
E - What are the requirements for our blockchain for energy trading?
→ The blockchain should be able to enforce some 100 transactions per second
including the required data. This is an enormous advantage, especially with larger
load thrusts.
→ The data volume in the blockchain is many times higher than it is known from
current systems.
→ The system represents a maximum of availability. Within a few minutes, it is
functional again or should establish a connection to an alternative node in a few
seconds.
→ For certain long-term trading processes, it is necessary to write these long-term into
the blockchain. With shorter-term processes, such as timetable registration, the data
loses importance after a few days. The storage of this data results in a high volume of
data garbage. The block chain allows you to separate and delete historical blocks.
→ It is sufficient if a block is completed after 30-60 seconds (block time). The
processes of today's IT systems are significantly slower.
→ The blockchain is administered by authorized participants. Thereby, certain
participants (TSOs, regulators) have the right to identify other participants. General ly,
the anonymity of the market participants must be given, since they are in
competition. Transaction files from traders or certain transaction data are only
accessible to authorized users.
→ Proof-of-stake is performed by the node operators, making proof-of-work
superfluous. Smart Contracts can also be relinquished because data exchange and
synchronization are in the foreground. The same applies to the payment procedure
and an associated currency.
F - The Power Play Energy trading software on blockchain basis
Our trading software revolutionizes energy trading and reduces its costs to a minimum,
making the micro-trading system possible, especially in the lower distribution networks.
We create our blockchain for fully automatic energy trading on the basis of a powerful
platform. Our goal is to make energy trading so efficient that transaction fees can be reduced
to a fraction of current fees. In addition, every producer and consumer should be able to sel l
- 24 -
or purchase their electricity directly, easily and at low cost. For this purpose, we develop the
Power Play Energy Blockchain. Every energy producer (companies, as well as private
individuals) and storage operator can offer its services here.
Customers (e.g. companies, private households, etc.) can purchase electricity via the
Blockchain. In order to promote consumption close to the place of generation, three
categories are defined for grid usage fees:
→ WITHIN THE REGION
→ WITHIN THE COUNTRY
→ INTERNATIONALLY
Each category has its own price category. The further energy production is away from the
consumer, the more expensive the electricity purchased or to be sold becomes.
Within the block chain, a control algorithm acting as an agent decides whether generated
energy should be fed into the network, consumed locally or stored. This optimal decision is
influenced by any change in energy demand (for example, new consumers are put into
operation). These efficient decisions are based on the supply and demand price. The current
conditions (high generation of PV energy or high demand for energy from industry) are
decisive factors in this respect. Thus, the algorithm always finds the most efficient option and
this completely automatically. Another advantage is that there is a transparent energy market
and all players can get the same conditions.
Should the algorithm come to the decision that it makes more economic sense to store the
energy than to sell it, then this surplus energy is stored in our Power Play Energy stores and
later sold again at better conditions (than at the time of storage). Within the blockchain
technology, our storage is the only permanently reliable, efficient and cost-effective energy
supply.
The advantage for the private energy producer (for example with its own PV system) is not
only the optimal use of its own power generation, but also the saving of time. He/she does
not have to worry about anything, all transactions are carried out fully automatically by the
agents. Thanks to us, small private energy producers can now use the energy they produce as
efficient as possible and are no longer dependent on aggregators (as they still exist today),
that market their energy and thereby reduce their potential profit (because the small energy
producer only receives a certain amount per unit sold).
Other advantages of our blockchain solution compared to the current situation are the
following aspects:
▪ The blockchain is always available, even if individual nodes fail, a connection to
another node can be established within a few seconds.
▪ Once transactions have been received, they cannot be deleted or forgotten, so there
is absolute security against manipulation.
▪ The individual transactions do not require their own Smart Contracts.
▪ There are no high annual fees to pay as currently at the electricity exchange in order
to be allowed to trade energy.
▪ In addition, the ever-growing demand for energy requires an efficient transaction
platform provided by our blockchain solution.
- 25 -
Our blockchain technology also replaces the currently prevailing complicated physical
settlement of trading transactions. The blockchain eliminates the need for energy timetables
that are currently still needed. Since each actor enters its trading data in the blockchain, the
network operator can read the delivery quantities directly from the blockchain. This
eliminates the need for 15-minute reconciliation and the accumulation of all balances, as is
currently done by all energy traders. The enormous utilization of the IT infrastructure as well
as the high energy and superfluous labor costs are eliminated in our solution and can
therefore be saved.
Power Play Energy as a clearing house
In order to ensure the execution of transactions, blockchain-based electricity trading also
continues to require an instance that hedges large volumes. Due to the inherent transparency
of the blockchain, these guarantees can be represented by an insurance model. The fees start
at a certain level for each trading partner and then decrease continuously with each
successful trading transaction.
As a result, the individual trading partners no longer have to deposit money in a central
location as before. As a neutral partner of the market in case of a trading partner´s default,
PPE provides the corresponding values from the pool of insurance fees or the corresponding
amount of electricity from its own battery stores.
A central point to be considered in fully automated trading systems is the possible
discrimination against topologically disadvantaged nodes. Since a decentralized system is
inherently slower than a centralized exchange system due to the necessary transfers via
different nodes, it must be ensured that no market participant can gain an advantage due to
the positioning of its trading nodes.
Since it may well take a few seconds to confirm a transaction in energy product trading, we
will force a random distribution of the corresponding events in the network in order to level
topologically disadvantageously positioned nodes with the more favorably positioned ones.
G - Unique selling propositions
→ FLEXIBILITY
Power Play Energy creates a network in which countless producers and consumers can
enter into bilateral electricity supply relationships with each other. The disruption of
traditional energy trading enables every private energy producer to make the optimal
use of his/her own electricity. In addition, there are no high annual fees as they are
currently payable at the electricity exchange.
→ STABILITY
With the imminent innovation of microtransactions in energy trading, we are charging
our system with a data volume that far exceeds the system performance of today's IT
- 26 -
structure. The Power Play Energy blockchain-based trading software will be able to
handle several 100 transactions per second including the required data.
→ AVAILABILITY
The Power Play Energy System will provide maximum availability. Even in the event of
a failure, the system reboots automatically in a few minutes. In addition, individual
nodes can establish a connection to an alternate node within a few seconds.
→ SECURITY
Power Play Energy ensures the security of the system and its users in three
independent steps:
➢ Once transactions have been received, they cannot be deleted or forgotten, so there
is absolute security against manipulation.
➢ The block chain is administered by authorized participants (TSOs, regulators, ...).
➢ Power Play Energy works as a clearing house.
- 27 -
ICO Details In order to raise the financial resources for the necessary investments, we will carry out an
initial coin offering. We are currently assessing different options on token models. Any further
details will be announced as we finished the design process.
Nevertheless, our token will be one of the first security tokens, which will allow any token
holder to exchange their PPE - tokens with shares of our future IPO.
The tokens will be offered by Power Play Energy GmbH publicly and worldwide. Restrictions
apply to investors from the USA and Switzerland.
Token Issuing volume tba.
Token Price at issue 1 USD
Distribution 80% Token owners
10% Founder team
10% Power Play Energy GmbH as reserve
10%
10%
80%
DISTRIBUTION OF TOKENS
Gründerteam Power Play Energy GmbH Token BesitzerFounder team Token owners
- 28 -
Website www.powerplayenergy.com
Accepted Payment Methods BTC, ETH, credit card
ICO Start/Closing Date tba.
Discounts We will have a timeframe of various discounts.
Token Issue Day 2 to 4 weeks after ICO - closing
Application of funds
80% Hardware / Investment in battery storage power plants
10% Operations
5% Research & Development
4% Marketing
1% Legal
Future IPO
If the company, at a later date, places shares on the stock exchange, token holders have the
right to exchange tokens for shares. Approximately 25% of all shares in the company are
reserved for token holders, who can receive a quarter of the company shares if the IPO is
successful. In return for the shares, the tokens are transferred to the company.
- 29 -
Calculation & financing
Application of funds
If we assume an issuing volume of 250,000,000 tokens, 80% will be sold under the ICO, which
corresponds to 200,000,000 tokens. 10% of the remaining tokens will go to the founders and
10% are held in reserve. In pre-sale, a maximum of 25% of all tokens are to be sold. The
remaining tokens are to be sold at their nominal value.
For example, the following scenarios arise for the above-mentioned sales prices:
I. No tokens are sold during pre-sale and all tokens are sold at face value (US$ 1),
corresponding to revenues of US$ 200,000,000.
II. 25% of all tokens are sold during pre-sale and 55% at the nominal value (US$ 1),
corresponding to revenues of US$ 181,250,000.
This result, for example, in a lower limit of US$ 181,250,000 and maximum possible proceeds
of US$ 200,000,000
There are exchange fees for the exchange in US$ of about 1%.
Fees of approximately 1% are also charged for the conversion to €.
At an exchange rate of 1 € = 1.20 US$, assuming that we sell 25% of the tokens in pre-sale
and 55% at face value (US$ 1), taking into account the exchange fees, results in an income of
179,000,000 (approx. € 148,000,000).
These revenues are used for investments in battery storage power plants, as well as hardware
and software. It will also finance the development of our blockchain solution, the marketing
and legal costs incurred and still to be incurred.
Finance planning
As recent as 2017, Hyundai built a 150 MW battery storage facility at a total cost of US$
45,000,000 (equivalent to approx. US$ 300 per installed kWh). However, there are also costs
related to project planning and connection to the power grid.
The connection costs are estimated at 4% of the net investment sum of the installed storage
capacity. We assume costs of US$ 350 for each kWh of storage capacity installed.
In order to achieve the maximum return on investment at the beginning, we do not intend to
acquire any land / buildings, but to rent them. The annual rent for land and buildings for a 50
MW battery storage power plant is approximately US$ 300,000 (gross).
For a 100 MW battery storage power plant, the annual rent for land and buildings is
approximately US$ 350,000.
- 30 -
Price per kWh 1.050,00$ 1.000,00$ 950,00$ 900,00$ 850,00$ 800,00$
Total Size in MWh 100 100 100 100 100 100
Total Costs 64.974.000,00$ 61.880.000,00$ 58.786.000,00$ 55.692.000,00$ 52.598.000,00$ 49.504.000,00$
Price per kWh 750,00$ 700,00$ 650,00$ 600,00$ 550,00$ 500,00$
Total Size in MWh 100 100 100 100 100 100
Total Costs 46.410.000,00$ 43.316.000,00$ 40.222.000,00$ 37.128.000,00$ 34.034.000,00$ 30.940.000,00$
Price per kWh 450,00$ 400,00$ 350,00$ 300,00$ 250,00$ 200,00$
Total Size in MWh 100 100 100 100 100 100
Total Costs 27.846.000,00$ 24.752.000,00$ 21.658.000,00$ 18.564.000,00$ 15.470.000,00$ 12.376.000,00$
List of potential Acquisition Costs for a 50 MW Battery Power Plant
$-
$10.000.000,00
$20.000.000,00
$30.000.000,00
$40.000.000,00
$50.000.000,00
$60.000.000,00
$70.000.000,00
$80.000.000,00
$1.100,00 $1.000,00 $900,00 $800,00 $700,00 $600,00 $500,00 $400,00 $300,00 $200,00
Acquisition Costs for a 50 MW Battery Power Plant
Total Costs
Here an overview of the costs of the battery storage plus land and building costs.
The cost per kWh installed in US$ can be seen on the horizontal axis. The vertical axis shows
in US$ 10 million steps the total gross costs for a 50 MW battery storage power plant
including connection fees to the supply grid and all taxes to be paid.
- 31 -
$-
$20.000.000,00
$40.000.000,00
$60.000.000,00
$80.000.000,00
$100.000.000,00
$120.000.000,00
$140.000.000,00
$160.000.000,00
$1.100,00 $1.000,00 $900,00 $800,00 $700,00 $600,00 $500,00 $400,00 $300,00 $200,00
Acquisition Costs for a 100 MW Battery Power Plant
Total Costs
Price per kWh 1.050,00$ 1.000,00$ 950,00$ 900,00$ 850,00$ 800,00$
Total Size in MWh 100 100 100 100 100 100
Total Costs 129.948.000,00$ 123.760.000,00$ 117.572.000,00$ 111.384.000,00$ 105.196.000,00$ 99.008.000,00$
Price per kWh 750,00$ 700,00$ 650,00$ 600,00$ 550,00$ 500,00$
Total Size in MWh 100 100 100 100 100 100
Total Costs 92.820.000,00$ 86.632.000,00$ 80.444.000,00$ 74.256.000,00$ 68.068.000,00$ 61.880.000,00$
Price per kWh 450,00$ 400,00$ 350,00$ 300,00$ 250,00$ 200,00$
Total Size in MWh 100 100 100 100 100 100
Total Costs 55.692.000,00$ 49.504.000,00$ 43.316.000,00$ 37.128.000,00$ 30.940.000,00$ 24.752.000,00$
List of potential Acquisition Costs for a 100 MW Battery Power Plant
The cost per kWh installed in US$ can be seen on the horizontal axis. The vertical axis shows
in US$ 20 million-steps the total gross costs for a 100 MW battery storage power plant
including connection fees to the supply grid and all taxes to be paid.
The operating costs amount to approximately US$ 1,200,000 per year, with 50 MWh of
installed storage capacity. With an installed storage capacity of 100 MW, the annual
operating costs are reduced to approx. US$ 1.500.000.
Among other things, personnel savings and lower security costs have a positive effect on
annual operating costs.
The annual operating costs include all costs of the required cooling / ventilation, insurance,
safety monitoring and energy costs of the battery power plant.
- 32 -
$(100.000.000,00)
$-
$100.000.000,00
$200.000.000,00
$300.000.000,00
$400.000.000,00
$500.000.000,00
$600.000.000,00
$700.000.000,00
$800.000.000,00
2018 2019 2020 2021 2022 2023
Investments Revenue EBIT Net earnings
The 6-year plan – with successful ICO (sale of all available tokens) – will look similar to this:
Already from the 2nd year (1st operating year), our EBIT margin is expected to exceed 50%.
The expected sales in the 5th year will be approximately US$ 255 mi llion, the expected net
income will be approximately $81 million, and EBIT is estimated to be $136 million. This wil l
be achieved with a total installed and commissioned storage capacity of 1,500 MW.
The expected sales in the 6th year will be approximately US$ 395 mi llion, the expected net
income will be approximately $112 million, and EBIT is estimated to be $191 million. This wil l
be achieved with a total installed and commissioned storage capacity of 2,300 MW.
Here is the expected
development of our
investment, sales, net
profit & EBIT totals for
the years 2018 to 2023.
2018 2019 2020 2021 2022 2023
Gesamtinvestitionen $ 43.31 6.000,00 $ 1 62.230.000,00 $ 248.862.000,00 $ 367.776.000,00 $ 51 2.784.000,00 $ 657.792.000,00
Gesamteinnahmen $ - $ 22.360.000,00 $ 71 .895.000,00 $ 1 38.930.000,00 $ 255.500.000,00 $ 395.31 0.000,00
Kosten-Gesamt $ 5.391 .452,00 $ 8.358.675,00 $ 1 8.31 4.41 8,75 $ 32.1 45.885,94 $ 56.722.1 52,42 $ 91 .455.698,03
MwSt. $ - $ (2.780.460,00) $ (4.679.754,29) $ (7.1 85.900,59) $ 2.1 84.228,82 $ 1 9.089.360,67
Abschreibungen $ - $ 3.640.000,00 $ 1 5.01 2.289,92 $ 33.664.579,83 $ 60.1 64.1 59,66 $ 93.656.764,71
Zinszahlungen $ - $ - $ 5.625.000,00 $ 1 2.727.500,00 $ 20.932.500,00 $ 31 .657.500,00
Gewinn $ (5.391 .452,00) $ 1 3.1 41 .785,00 $ 37.623.045,62 $ 67.577.934,82 $ 1 1 5.496.959,09 $ 1 59.450.676,59
Steuern $ - $ 3.942.535,50 $ 1 1 .286.91 3,69 $ 20.273.380,45 $ 34.649.087,73 $ 47.835.202,98
Nettogewinn $ (5.391 .452,00) $ 9.1 99.249,50 $ 26.336.1 31 ,93 $ 47.304.554,37 $ 80.847.871 ,36 $ 1 1 1 .61 5.473,62
Cash Flow Ende $ 1 21 .292.548,00 $ 29.401 .797,50 $ 3.638.21 9,35 $ 5.331 .353,55 $ 1 5.559.384,58 $ 1 0.539.622,90
Kredite $ - $ 57.500.000,00 $ 239.250.000,00 $ 527.750.000,00 $ 909.750.000,00 $ 1 .357.250.000,00
Sachanlagevermögen $ 43.31 6.000,00 $ 201 .906.000,00 $ 435.755.71 0,08 $ 769.867.1 30,25 $ 1 .222.486.970,59 $ 1 .786.622.205,88
Eigenkapital $ 1 64.608.548,00 $ 1 73.807.797,50 $ 200.1 43.929,43 $ 247.448.483,81 $ 328.296.355,1 7 $ 439.91 1 .828,79
EBIT $ (5.391 .452,00) $ 1 3.1 41 .785,00 $ 43.248.045,62 $ 80.305.434,82 $ 1 36.429.459,09 $ 1 91 .1 08.1 76,59
EBIT-Marge No earnings 58,774% 60,154% 57,803% 53,397% 48,344%
- 33 -
Our expected targets for 2023:
→ TOTAL INVESTMENTS (ACCUMULATED): US$ 1.993 billion
→ EBIT (ACCUMULATED): US$ 459 million
→ NET INCOME (ACCUMULATED): US$ 270 million
Primary balancing power
A weekly performance price is calculated for the PBP according to the "pay-as-bid principle".
The price for this was mostly between US$ 3,000 and US$ 4,800 per MW per week between
2014 and 2016, with a steadily growing lower limit becoming apparent.
The tendered area ranges from approx. 1,200 to 1,400 MW per week (Germany, France, the
Netherlands, Austria, Switzerland and Belgium). Germany accounts for the most part with
approx. 600 MW per week (regelleistung.net).
With our planned 50 MW battery storage, we can therefore cover about 8% of the total
German market but only about 3 - 4% of the market in Germany, France, the Netherlands,
Austria, Switzerland and Belgium.
For our calculation, we assume an occupancy rate of 52 weeks and take into account the
prevailing German tax legislation.
With an average revenue of US$ 4,300 per MW per week for the PBP and acquisition costs of
US$ 350 per kWh, the average annual EBIT margin (in the first 10 years of operation) is
approximately 54% with an installed storage capacity of 50 MW and approximately 59% with
an installed storage capacity of 100 MW.
If the acquisition cost drops to US$ 300 per kWh of installed battery storage capacity, the
average annual EBIT margin (in the first 10 years of operation) is approximately 56% with an
installed storage capacity of 50 MW and approximately 61% with an installed storage
capacity of 100 MW.
Industry partners
In this division, a wind farm and a battery storage facility are leased to an industry partner for
a fixed amount. In addition, the industry partner hires technical operators from us to manage
the combination of wind farm and battery storage. The usual electricity price in Germany for
industrial customers is approx. US$ 0.252 per kWh (€ 0.21*1.20). We are able to rent a wind
farm with an output of approx. 36 MWp to the customer in combination with a 50 MWh
battery storage at an annual gross price of US$ 16,825,000 in addition to annual rent
payments to us for the necessary personnel and operating costs of US$ 1,600,000. In total,
the customer pays US$ 18,425,000 per year. This corresponds to an approximate average
electricity price of US$ 0.192 per kWh for the customer - a saving of over 23% per year. For
this saving, the customer only has to transfer a security deposit to a blocked account before
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construction begins. All contracts are concluded for a minimum term of 10 years. The figures
given here may of course differ depending on the required performance of the wind farm
and the battery storage.
Our expected return on investment (EBIT margin) is approximately 26% annually, in the first
10 years, the expected average is in fact at approximately 28% (in the first 10 years and
acquisition costs for the battery storage amounting to US$ 350 per kWh).
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The Team
The founders
Marcus Hartmüller
Marcus is CEO of Power Play Energy. He studied computer
science, geography, business administration and archaeology
in Kaiserslautern and Heidelberg. Since 2011 Marcus has been
working as a freelancer in project development for renewable
energies and urban planning. In his career to date, he has
been significantly involved in several bioenergy and wind
energy projects, among others with juwi and UKA Meißen
Projektentwicklung.
On the urban planning level, he developed a comprehensive
parking concept together with the Johannes Zech office in
2014 and 2015.
In the Power Play Energy team, Marcus will be primarily responsible for cooperation with
business partners in the energy sector and HR.
Maximilian Gschoßmann
Maximilian is CFO of Power Play Energy. After completing a
semester abroad in Milan, he will soon be completing his
Master in Economics (M. Sc.) at the Ruprecht-Karls-University
in Heidelberg. Maximilian also holds a Bachelor of Science in
Economics which he studied in Heidelberg from 2012 to 2015.
During his studies he not only dealt with classical economic
topics, but also with the topics of corporate management and
financial investments / corporate finance.
In 2017, Maximilian also completed a five-month internship in
an international energy and automation group in treasury -
cash and FX management.
Within the Power Play Energy team, Maximilian will be responsible for Corporate Finance and
Controlling.
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Michael König
Michael is CTO of Power Play Energy. Since 1999 he has been
working in the energy sector under the conditions of the
liberalized electricity market. Michael has extensive experience
in the field of power plant marketing, electricity procurement
and direct marketing of renewable energies in accordance with
current legal requirements. He holds a degree in engineering
and built up the portfolio management and energy trading
division for a municipal energy supplier at the beginning of his
career in the energy industry. This included the marketing of
the in-house power plant and the procurement of the
electricity volumes for the customer load.
Michael advised industrial customers and municipal utilities on the procurement and sales
strategy in electricity trading (exchange and OTC) for a Swiss company in the area of
consulting. With the introduction of the market premium and the gradual integration of
renewable energies into demand-driven production under liberalized market conditions, he
has gained extensive experience and knowledge in the construction and handling of directly
marketed power generation plants and virtual power plants in recent years.
Within the Power Play Energy Team Michael will lead the Power Trading and Technical Sales
divisions.
Felix Römer
Felix Römer is CIO of Power Play Energy. He started
programming Text Adventures in BASIC at the age of 11. At
the age of 14 he was significantly involved in the
implementation of the modification "GladiatorZ" for the 3D
game "Unreal Tournament" and was already leading a team of
7 people.
After graduating from high school and training as an IT
specialist, Felix worked for almost 7 years as an IT freelancer,
especially in web development. Since May 2015 Felix has been
Senior Engineering Specialist at Hyperloop Transportation
Technologies Inc. In January 2016 Felix founds the corporation
RömerIT UG.
Felix will be responsible for IT in the Power Play Energy Team. Among other things, he is
responsible for the website and programming the Smart Contract (Power Play Energy Token)
for the Initial Coin Offering (ICO). During the ICO he will also support the team with his
knowledge of performance-based marketing.
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Anh Tuan Truong
Anh Tuan is CMO of Power Play Energy. He is currently still
studying business administration (B. A.) at the htw Saar.
Through his work as a research assistant under Prof. Dr.
Markus Münter in the workshop series "Startups and new
business models", he acquired a great deal of interest, but also
a broad wealth of knowledge on the topic of "self-founding".
In 2016, he worked as a fundraiser for Wesser GmbH for
several weeks and gained experience in cold and direct
acquisition during this time. Anh Tuan worked for imc AG as a
working student for four months between 2017 and 2018,
during which time he expanded his knowledge in the areas of
CRM and marketing analytics.
Anh Tuan will be responsible for marketing (PR & Communication) in the Power Play Energy
team.
Other team members
After a successful ICO our team will be strengthened by further employees. Our future head
of power plant technology and project implementation, Udo Fischer, deserves special
mention here.
Udo Fischer
Udo is an electrical engineer and has been running an engineering office dealing with the
planning and installation of PV systems since 1999. Until 2009 he worked as a management
consultant for project and process management as well as software and database technology
for major German and European customers. Since then he has been involved in energy
consulting, primarily for renewable energies and energy saving in general as well as storage
facilities in particular. He holds a degree in electrical engineering and a diploma in
mechanical engineering.
Udo will be in charge of power plant technology and project implementation.
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Our advisers
Every new company needs reliable partners who can help and advise the founding team.
Ifesca
ifesca GmbH is a company founded in Ilmenau
in December 2016. The currently seven team
members have been working together for
several years in the areas of software
development, project development, support
and research and form a perfectly coordinated
team.
The aim of the company - which specializes in the energy industry - is to provide optimum
support for decision support processes by offering innovative software solutions, particularly
in the area of forecasting and optimization in energy trading and the associated services. The
focus is on maximum ease of use and intuitive handling of business processes.
As specialists in machine learning, they are available to their partner companies with
innovative solutions and artificial intelligence algorithms as development partners for all
questions relating to battery storage power plants.
Prof. Dr. Frank Hälsig
Prof. Dr. Frank Hälsig is Professor for Marketing, Pricing, Sales Management and E-Business,
Management Trainer and Management Consultant with 15 years of consulting experience as
project manager in Germany and abroad and lecturer at numerous universities.
Previously, Prof. Hälsig was Director at Simon-Kucher & Partners - Strategy & Marketing
Consultants. The focus of the global strategy consulting is on marketing, sales and pricing.
Simon-Kucher & Partners is regarded as the world's leading pricing consultancy.
Mr. Hälsig has extensive project experience in various service industries, the energy sector,
the industrial goods sector, logistics, the telecommunications industry as well as in the trade
and automotive industry. He is a speaker and author on various topics, especially in the areas
of pricing & sales, customer loyalty and e-business & digitization. Among other things, he
was awarded the 1st prize of the German Market Research.
Tax Consultancy Michael Reinehr
With over 20 employees, REINEHR is one of the largest consulting firms in the Donnersberg
district. The principle of all-round support and the comprehensive network are recognized
strengths. Their wide-ranging expertise and industry knowledge in the areas of tax and
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management consulting, accounting as well as financial and payroll accounting are second to
none.
KWT of Saarland University
The Contact Point for Knowledge and Technology Transfer (KWT) provides ways for a
successful cooperation at the interface of science and industry. Due to the many different
departments and specializations of the University of Saarland, KWT provides competent
contacts for partner companies in a wide variety of areas, from IT-law in relation to
blockchain technologies until general corporate management. An unbeatable advantage for
all companies that want to be at the cutting edge with new topics and developments.