Jemma Green is the Chairman and Co-founder of Power Ledger, which is disrupting and reimagining how we generate, buy, and sell energy. She was involved in Australia’s biggest initial coin offering of $34 million to fund her startup in 2016.
After completing a degree in finance, Jemma started her career in banking at J.P. Morgan in London. While there, she saw first hand the dilemmas and problems that came with bringing corporate social responsibility to the business world. After a decade in the UK, Jemma returned home to Perth to pursue a doctorate at Curtin University in electricity market disruption, which she completed in 2017.
This work turned out to be the perfect segue to starting up her own business, a blockchain-powered peer to peer energy and carbon credit trading platform called Power Ledger. The company is four years old and has projects in the US, Japan, Europe, Thailand, and Australia.
Jemma is an expert in residence at Curtin University helping with the commercialisation of technology and the startup ecosystem. She also serves on the board of Water Corporation. Somehow she found time to become Deputy Lord Mayor of the City of Perth and a mother of two children. Jemma helped set up Australia’s first fossil fuel-free superannuation fund and has sat on numerous boards championing sustainable business. She gives regular talks on technology and leadership in business and recently received the EY Fintech Entrepreneur of the Year award.
The Ultimate Guide to Website Traffic for Business
What you will learn
- The importance of downtime, silence, and space for inspiration
- The opportunity that comes from great timing
- How the intersection of different technologies is transforming the 100-year-old energy market
- How households are making money from their solar batteries and not just their solar panels
- How blockchain is disrupting the energy market
- Insights on fast-moving markets to fight, flight or innovate
- The importance of being customer-centric for business survival
- The advantages of blockchain funding over VC funding
- Scaling global growth through international collaboration
- Why backing yourself and your own judgment is a superpower
- The importance of learning from your failures
- Why you need the power of passion
Jeff Bullas: Hi, everyone and welcome to the Jeff Bullas Show. And today we're going to be having a chat with Jemma Green, who's the Executive Chairman of a company Power Ledger. So a little bit about Jemma before we dive into discovering her story. After completing a degree in finance, Jemma started a career in banking at JP Morgan in London. While there she saw firsthand the dilemmas and problems that came with bringing corporate social responsibility to the business world. After a decade in the UK, Jemma returned home to Perth to pursue a doctorate at Curtin University, Electricity Market Disruption which she completed in 2017. This work tend to be the perfect segue to starting up her own business.
Jeff Bullas: A blockchain powered peer to peer energy and carbon credit trading platform called Power Ledger. The company is three years old and has projects in the US, Japan, Europe, Thailand and Australia. Jemma is an expert in a residence at Curtin University helping with commercialization of technology and the startup ecosystem. She also serves on the Board of Water Corporation. Somehow, she's found time to become a Deputy Lord Mayor of the City of Perth and the mother of two children. Jemma has helped set up Australia's first fossil fuel free superannuation fund and has sat on numerous boards championing sustainable business.
Jeff Bullas: She gives regular talks on technology and leadership in business. Jemma recently received the Ernst & Young FinTech Entrepreneur Award and also she was the winner of Richard Branson's Extreme Tech Challenge in 2018.
Now, Jemma, that's quite a resume. And it's so great to have you here. Now I'm going to confess up front here that my area is more in digital business and digital marketing, but in peer to peer, power trading and blockchain I'm a little bit of a newbie. So I'm looking forward to our conversation. So great to have you on the show Jemma and thank you for giving us the time.
Jemma Green: Thank you for having me.
Jeff Bullas: So you've done quite a lot. And so you started off in banking at JP Morgan went to London. What sort of motivated that to go and leave the beautiful city of Perth and Australia?
Jemma Green: My father was Irish and I'm the beneficiary of an Irish passport which meant that I could live in work in Europe and it's sort of rite of passage for young people in Perth at least to finish their degree and do a bit of traveling. And I didn't anticipate in advance staying away for more than a decade. It was really a kind of the year or two long trip. Got extended on an annual basis. I'll stay another year. I'll stay another year. And hey, presto was nearly 11 years. So yeah, it wasn't through kind of fun. Yeah, architecture in advance that I'm going to do it like that. It just happened.
Jeff Bullas: So life unfolded and you are enjoying London? Yeah, London is one of my favorite cities. I've got a cousin who lives with his partner and it's one of my favorite cities in the world. And I love going back. So I can sort of see why you ended up putting a stake in the ground and spending that 10 years. So you worked in JP Morgan and you saw the dilemmas and problems that came with corporate social responsibility or lack thereof. Can you tell me a bit more about what was unfolding and what were your thoughts at that time?
Jemma Green: Sure. So around 2005 or '6, I think the banks were starting to realize that it wasn't just a matter of ensuring that the money they lent out to companies would be returned. But there were other expectations of society and these notions of social license to operate started emerging. So banks started to be attacked by activist organizations for funding rainforest destruction or employing child labor and these kinds of things started to become issues for the bank and areas of concern. And so at that time most of the banks were setting up environmental and social risk management units and looking at their lending and underwriting activities in developing countries where they perhaps weren't very good environmental and social regulations or they existed, but they weren't particularly well implemented.
Jemma Green: And JP Morgan was no exception in terms of, taking a keener interest in this topic. And I was at that time already working in the bank, but in equity derivatives in risk and the bank had decided to set up that function, the global function based out of the London offices and I had just completed a voluntary project in the office to introduce recycling bins. It was very fun and exciting, but also it was amazing to me to see how much resistance there was to a very simple change in behavior. And I just became very curious about what it would take to get people to change the way that they did things or required things for clients. And I was fortunate enough to be chosen to help set up the team that looked at the bank lending and underwriting activities in high risk sectors. So mining oil and gas, electricity, power markets, commodities, heavy manufacturing, forestry, pulp and paper and things like that.
Jemma Green: So I ended up doing that for about six years and went on and did a Masters by research looking at sustainability, as well focused on mining in oil and gas sectors and looking at a BP Deepwater Horizon spill and whether you could have seen that coming by virtue of how they were managing and mitigating their environmental risks and whether that was baked into their credit ratings so that actually, you could have anticipated many of the things that had ultimately eventuated by virtual of the kind of leading and lagging indicators they had around environmental risk management and health and safety risk management.
Jeff Bullas: Right. As you ran the risk area, which is that one of your key responsibilities?
Jemma Green: Yeah. So I mean, in my... It was more looking at areas of financial risk in my old job, but in that area it was really looking at environmental risk, but looking at the kind of intersection between them and how they're quite intimately related. And so how poor environmental performance can ultimately become a financial issue and in the case of BP resulted in their credit rating daring downgraded multiple notches and nearly led to their demise. Because the perception around them was that they may not actually deal with this mess appropriately and their initial reactions were, is the subcontractors fault. But the US government reaction was not withstanding whatever the multi agency, contractual arrangements you've put in place. We think you are culpable. You are responsible.
Jeff Bullas: The buck stops with them. Yes.
Jemma Green: Exactly. And it wasn't till BP said that it would ultimately take responsibility for this, notwithstanding the contractual legal view of the situation that their share price stopped declining. And also the banks were at that time in a sort of Mexican standoff with each other to see if they would pull liquidity from BP, which would have ultimately led to their demise as well. And so it wasn't till those statements came out that there was a kind of shoring up of confidence in them and their ability to deal with it in the way that society would. So yeah, I looked at that and a range of other mining oil and gas companies and as part of my master's research into this topic and I just found it really fascinating to say this kind of changing norms and expectations of companies. Both the companies themselves and also the financiers of those companies.
Jeff Bullas: So you were doing the Masters in London?
Jemma Green: At Cambridge.
Jeff Bullas: At Cambridge. Okay, so in Cambridge. So you then decided to come back to Perth and do your doctorate in Electricity Mark disruption. So obviously, was this Master's one of the sort of major, I suppose discovery points that sort of drive you to come back and do that at Curtin University?
Jemma Green: Not exactly. No. So I submitted my Master's thesis and I'd be working full time and studying part time and I was quite tired. So I took a sabbatical and traveled quite extensively for about nine months. And I did quite a bit of hiking, I did the Camino de Santiago hike and also traveled through the Middle East and Nepal and South America. And originally, I was actually going to come and live in New York, or in Sydney and I'm working at a bank and I just felt, I really like to come home to Perth, and there's not really any investment banks here. And so it necessitated me thinking of some other things to do with my career and I actually had a sinking feeling that all my exciting career days would be over in returning home to Perth. That I was effectively prioritizing coming home to my family over having a career that I found particularly fulfilling.
Jemma Green: A friend of mine who'd done a PhD, I shared with her that on my hike I had this idea that I'd like to build an eco village and she said, "Oh, why don't you do a PhD in that topic and better inform the design of the development?" And I shared this idea with a professor, here at Curtin University called Peter Newman. And he said, "Oh, that's a great idea. You should do that and I'll get you a scholarship." And it just became oh, this is something that I'll do to see what happens next. And I designed a solar and battery system for an apartment building. And then I wanted to create a trading environment inside the development where you had been allocated units of solar electricity and if you weren't home to consume that you could trade that with your neighbors, but there wasn't any software I could find that would actually facilitate that.
Jemma Green: And by chance, about two thirds of the way through my PhD, a former banking colleague of mine who's based in Sydney, he introduced me to these two blockchain people in Perth and said, "Oh, you should meet them. They're doing some interesting stuff." And I had a conversation with them and they shared with me about this thing called the blockchain and how it was changing so many things in the world. And I was super excited about it. And I didn't really understand. But subsequent to that meeting looked into further details around what this technology did and whether there were applications in electricity and saw indeed they were. And started exploring that in more detail and introduced the blockchain people to a couple of other people in energy. And about four months later, we set up Power Ledger in May of 2016.
Jemma Green: So it was again, not by kind of grand architecture. I kind of fell into this business and fell into being an entrepreneur. It wasn't my intention, I thought I would end up getting a job at the end of my PhD. And yeah, and so I think we turned four in May of 2020. So yeah, it was entirely a surprise but yeah, I feel incredibly blessed and that it took that a once in a lifetime opportunity and I feel very excited to be able to do the work that we're doing every day.
Jeff Bullas: Yeah. Well, I think what's fascinating to hear the first part of your story here is that, what you're doing actually is potentially exponential in its spread. But it seemed a section of multiple technologies that allow that to happen, isn't it? So you've got blockchain, you've got battery technology and you've got solar technology. And also there's a social movement happening that people want to look out for the planet. We're on this planet Earth together. We actually can't keep trashing it and we need to look after it and social responsibility. And you stepped back from this busyness that you would have obviously been involved in, in London.
Jeff Bullas: And busyness is almost worn like a badge of honor. But you stepped sort of off a planet into quietness for nine months. And you just by accident met someone, where you discussed an idea. And I think it's really... I never cease to be amazed at what shows up when you actually take the time to not be so busy and to actually do that. So you met these two guys, you start Power Ledger. So I've taken a few notes about what you guys do. And so you're essentially in the areas of energy trading. In other words, you've... We now have solar panels on the roofs and we now have battery packs which essentially are being democratized and pushed by Elon Musk and other entrepreneurs now which allows us to store power for peak periods.
Jeff Bullas: And then we've got, you also the environmental commodity trading which is more on the blockchain area which provides security and stops double counting and makes it more accountable. And then you are also in the area of renewable asset ownership. So blockchain, you started it, you met with two guys on... You started Power Ledger, you met these two guys in blockchain. So you started the company. Tell me a little bit more about how energy trading works, because I think this may be the best place to start.
Jemma Green: Sure. So we connect to smart meters to measure output of generating assets. So solar farms or wind farms or any type of generation battery and the consumption side, so the meter at a house or business. And that creates a record of a transaction between the generator as seller and the consumer as buyer. And using a blockchain what it provides is the ability for the transaction and settlement to be one entry on the ledger and thereby facilitating real time agile trading and settlement environment. And why that is exciting is that electricity markets typically settle quite latently. Households get their bill every 60 days and pay 30 days later and so using a blockchain, you can actually create a more efficient market and facilitate more complex cut types of trades.
Jemma Green: So if you've got multiple electricity retailers, they could trade with each other's customers. So you might have one retailer that could trade with another retailer's customers and settle on the blockchain. And so if that household got a battery, it could be selling to its own retailer or another retailer and optimize the income for its battery and to sell into the peak. So having cross retailer trading and settlement without the need for an intermediary or an exchange and the retailer has an alternative source of supply of electricity services. I think that frequency and control services to the wholesale market and the ability to purchase those perhaps at a discount to the wholesale market to cheaper hedging. And they could do so and attract and retain their own customers as well or those in the trading network.
Jemma Green: And particularly on the East Coast of Australia, the National electricity market that's very attractive because there's so much, in fact too much renewables. Like too much solar and wind, it's caused instability in the system. So it's actually caused very significant problems. And the battery storage is able to absorb that during the day and then dispatch it later at night. And you can just absorb it during the day and be used for self consumption in the home but a more higher value use of that is also to size the battery larger and then dispatch into the market. And so it could enhance the payback period on the investment in a battery. And for households that are already contemplating putting a battery in this is an extra income kicker or passive income source.
Jemma Green: But the block chain facilitates it in real time and then we have an agile and efficient market and the ability for a market mechanism that's low cost to integrate to, to drive the actual physical outcomes you want in the electricity system. As opposed to how it's been for pretty much a century where the physical electricity system was built as it was and then the market set on top of it. So it's kind of re imagining how the system works driven by market mechanisms and democratizing power and enabling citizen utilities to participate in those markets.
Jeff Bullas: So it's interesting, you've got quite a few different stakeholders in the matrix, haven't you? You've got the power companies then you've got distributors as well that run the grid. They quite often are separate though, is that correct?
Jemma Green: Yeah, you'll often find that they are separate, but they're absolutely a piece of the puzzle and they need to be paid for use of their network. And electricity moves across the network like any network access arrangement whether it be railways or internet or electricity networks. They're a stakeholder in the market.
Jeff Bullas: Yeah. So Power Ledger maybe couldn't have existed four or five years ago because the intersection of the technologies wasn't available at that stage. Would that be a correct statement or not?
Jemma Green: Yeah. There were no smart meters and it's not possible to create that kind of real time trading environment. You'd be effectively reading the meters every two months in arrears and retrospectively running trade. So yeah, it's not. It's driven by the advent of smart meters, a lot of solar in the system and now volatile prices which are making the economics of battery stack up. So it is a kind of coalescing of these factors. And as you say, there are many actors involved in bringing all this together. Yes, so it is a kind of perfect storm.
Jeff Bullas: Yeah. How long have smart meters been in the Australian market, and even globally?
Jemma Green: Well, as a mass for all it's been going on for the better part of a decade. In Australia, Victoria has widespread adoption of them and there's rollout in every other state and territory underway right now. So for example, in Italy the entire country has smart meters. Germany doesn't have smart meters, they have actually some concerns around privacy around kind of revealing what you're doing in your house by virtue of what you're consuming electricity wise. But by and large, there's a global trend towards adoption of smart meters.
Jeff Bullas: Right. So what's the penetration rate in Australia with smart meters from your data or research? What level do you think it is sitting at?
Jemma Green: I don't know nationally, where we're at right now. But I think for example, in Western Australia, they're going to roll that a couple of 100,000 over the next few years. And I think there's about 900,000 households. So I think in the case of Victoria, they did it all as one large rollout that happened in a quite a short time space of time. And there were quite a few lessons that were learned from that, that have kind of been incorporated into the designs, and we now have some different types of smart meters that are being implemented in other states and territories in Australia.
Jeff Bullas: Right. So is Victoria leading the win Nationally in the Australian market?
Jemma Green: Win so far as it is like 100% adoption of smart meters in the State of Victoria. Yes, yes.
Jeff Bullas: Well, okay, cool. So internationally, you've got countries like you mentioned Italy has got a 100% penetration rate. What about the US? Where do they sit?
Jemma Green: So it varies from state to state. So where you have deregulated markets, then you'll often find smart meters have been installed. So where there's more competition, that would be in Texas, New York, California these are the places where there is a lot of smart meter adoption.
Jeff Bullas: Right. Okay. So now obviously, the grids have been designed for 100 year old infrastructure. I have heard in some of my reading over time is that the grid is designed to operate for an old style system, which is now being disrupted. So what are some of the challenges for the grid?
Jemma Green: It's quite a lot. So firstly, the system has been largely characterized by big power stations sending electricity in one direction. So a unidirectional system, sending direct electricity to people's homes and businesses. And that would be largely coal and gas fired power stations. And then in the past 15 years as people have installed rooftop solar, the distribution part of the electricity network has also been a source of generation of supply. Not just the transmission network bringing electricity to the distribution network. And then there's been income generated from those solar assets and usually by virtue of large government subsidies and more recently smaller ones through feed in tariffs.
Jemma Green: And now batteries also attract subsidies from the government to drive the adoption of them from subsidies and grants. And then also through virtual power plants providing an economic incentive for people to purchase them that provides that sort of income enhancement to them. But if you just look at the amount of solar and wind both large scale and small scale solar and wind, so some of the large scale solar and wind has been in the transmission network, but that also has caused system instability because for example, the wind might be blowing when the electricity is not needed and that actually causes issues in the grid over supply. Or too much solar in the day in places where it's not needed. So this causes blackouts and system interruption.
Jemma Green: And so there's a need to actually absorb that electricity by some means. Whether it be through a battery or using it to power turbines for pumped hydro storage or things like this. And so there's lots of different things that are being investigated to absorb that electricity so that it doesn't cause the system problems. And so the most basic thing is, absorb it into a battery and then consume it at that wherever the battery is located. But a higher order use for it in addition to that is to actually dispatch it into the market and provide services. So it's kind of like the batteries out there kind of providing the assistance to deal with the problems that renewables have created.
Jeff Bullas: Yeah. So my observation is that the battery which can store energy which can't be used at current time because the biggest issue with renewables has been baseload, isn't it really so? Wind runs when it wants. Solar running turns up during the day.
Jemma Green: Perfect. So the baseload power is one aspect of it and then also dealing with things like frequency control and ancillary services as well, that baseload providers deliver to the market that batteries could do in lieu of traditional sources of baseload.
Jeff Bullas: Yeah. So what you're doing is, you're bringing democratization of the power market, aren't you? That's really also enabling people to use renewable power to actually feed the grid. So where do you see the... I suppose how quickly do you think this is going to take up and disrupt the market? And then also the other part is, the electricity companies, do you see them as being in danger over the years or in the future? Because the power is being distributed by everyone or provided by everyone into a grid. Electricity companies are not going to go away, but how do you see that playing out the individual providers on a macro level?
Jeff Bullas: It's like what happened to computer power, back in the '70s, '90s. The PCs turned up and democratized computing, whereas before it was always centralized. So mainframes just basically are still part of the game but nothing like we are seeing today with personal computers being everywhere, which is the democratization of computing and now we are seeing the democratization of power. So what do you think the future is for electricity companies?
Jemma Green: Okay. Look historically at other sectors like your mainframe example. IBM used to... It was in mainframes and then got into personal computers and now does a lot of consulting services and they really evolve their product offering business model and commercial models to adapt around the new market conditions. And I think for incumbent utilities it will be the same thing. So those that want to innovate and not just around the edges will start to offer new products and services that are providing value to consumers in this market.
Jemma Green: So for example, selling solar and battery systems to customers or offering them to them with no money upfront under a power purchase agreement. Assisting customers to monetize their investments in that so the retailer buys ancillary services from its customer rather than the market and therefore endearing the customer to them. Facilitating the customer and making more money through looking at different income streams, through cross retailer trading and settlement. So our view is we partner with retailers and it's a service that we offer to them. They want to allow their customers to trade peer to peer or trade into the virtual power plant for our transactive energy product portfolio. And in doing so, they are able to give customers what they want and create a more compelling proposition to them.
Jemma Green: And if you look at disruptive innovation theory, incumbent players that are perhaps losing market share or having their profit margins eroded can do one or a combination of three things. They could fight, flight or innovate. And fight means perhaps fighting against the renewable energy targets or fighting against feeding tariffs. Fighting against trying to increase fixed charges. So customers pay high daily fixed rates regardless of how much electricity they use from the grid and they're examples of that going on all over the world in electricity markets.
And then flight is either do nothing or divest. And we're also seeing large utilities particularly in Europe, where the market has developed faster in terms of the energy transition creating two separate entities. One with their old energy assets and one with their new and selling down a lot of their old assets. So we're seeing that happen where they've got all of that going, that's not long term where we want to be.
Jemma Green: And even with petroleum companies doing that as well. So setting up large venture, corporate venture partnering arms where they're investing in new technology. So as an example, Shell has purchased EOLFI, one of the largest retailers in Australia and also invested and wholly owns a largest solar company in India and also sign in a German battery manufacturer. So they're starting to kind of realign their business with the new trends that they see emerging. So flight can look like that. And then innovate means that you might be doing either non cannibalistic or cannibalistic innovation. So non cannibalistic innovation is where you pursue new things that you haven't done before. So a retailer might go to regional areas that it's not currently present in and start offering microgrids to displace diesel.
Jemma Green: Cannibalistic activity is where they go to their existing customers and offer them products and services that reduce their profit margin, but they do so because if they don't, someone else will. So oh, let's offer them solar panels which means they'll buy electricity from us, but we'll make money up front on the solar. And if we don't do that someone else will. And it's been that space I think, where you're going to see the utilities of today transforming to the utilities of tomorrow that are very customer centric. And they're only just doing innovation around the edges that's not going to happen. And I think you will see disruption occur, but not necessarily destruction of value for those utilities that want to innovate. And we say our product is supporting those that truly want to innovate and then service the customer in new ways.
Jeff Bullas: Right. So basically, the electricity companies that are going to survive in the future are those that disrupt themselves and innovate. Then that's obviously going to be the case. So Jemma, tell me... I'm interested in the business model and some of the challenges you've had as an entrepreneur. So we've talked about the tech and I find that pretty exciting. I think you're in the middle of one of the most exciting times in power generation that the world has ever seen. And I think you're obviously passionate about it and that's why you started Power Ledger. And I'm excited to see how it all unfolds. And this is going to be another century of innovation because this is not going to change quickly. This is a long game.
Jemma Green: It is. I think you'll see a lot more unfold in the next three to five years, though. Going to be very formative in terms of what the next 10 or 20 years actually looks like.
Jeff Bullas: Yeah. Well, I left my original career as a teacher. So I went and joined the technology industry in the mid '80s. And I left right in the middle of the PC revolution. And the next 10 years it was mind blowing, it was a ball. It was like the Wild West. And you're right, I think what's going to happen is that there's going to be a lot of fast change. And then as in any industry, it's then going to mature. And we're seeing that happening with social media. Social media was the Wild West 12 years ago. Now it's big business. Facebook is now one of the largest companies in the world. So you're going to see the maturation of your industry, but this is going to be rapid, fast change over a few years.
Jeff Bullas: So in terms of Power Ledger, what were some of the challenges you've had? Obviously, when you kicked it off... Okay, who's going to pay for this? Who's going to pay for stuff? Who is going to pay for my life? So what were some of the challenges including the funding of Power Ledger and how'd you get started?
Jemma Green: Well, the founders funded the business in the initial phase and then we received some venture investment and then we also undertook Australia's first initial coin offering. So we created a cryptocurrency called the Power Token, which is used as a bond on our platform for utilities to allow their customers to trade electricity. So it's a kind of security bond which replicates what happens in the electricity markets. So if you want to play in the wholesale market you need to put up what's called a Prudential. Which covers the outstanding debts that you've got with other counterparties during the settlement period and the Power Token replicates that on our marketplace. But because the settlement period is shorter, the bond requirements are too.
Jemma Green: And so we did that in 2017 and we raised $34 million, which provided a very good chunk of funding for early stage company and meant that a tech company based in Perth was able to compete internationally and position ourselves in as a leader in this space which is super exciting. So we have projects now in I think nine countries. Partnered with KEPCO in Japan, NASDAQ listed company in the US called Clearway and the Malaysian government, Thai partner listed on the stock exchange with about 500 megawatts in its portfolio called BCBG. There's quite a lot of projects that we are involved in now that the funding has provided us access to. And I think this new and innovative form of capital raising I think, has created more innovation and experimental business models that you can see in the blockchain space.
Jemma Green: Distinct from not traditional sources of capital for early stage companies would be venture capital, and they have a view of what they want to fund and it's based on where they see the biggest returns the quickest, and it's not always the best outcomes for society or what actually is the most viable longer term. And so I think that it was very exciting for it to be a company based in Perth and have that opportunity and to be able to... Notwithstanding the fact that we're not in Silicon Valley to be in a leading position in that respect because of this new form of capital raising. And I think we're starting to see countries that want to prioritize the blockchain sector in their countries and are developing regulations and legislation to be supportive of that so that they see it as a form of competitive advantage and to drive more innovation, but also better outcomes for customers as an example.
Jemma Green: Like in blockchain in the financial services sector, you're able to spin up technology services in a much more low cost fashion than traditional infrastructure. And so that means that more products come to market which provide better outcomes for consumers. And so it's not just about creating these new businesses and enterprises, but it's the actual products and services that are delivered in that high market as well as the value to the economy. So I think that you're starting to see countries that are getting ahead of that and really trying to become the blockchain cities of the future and centers of the future.
Jeff Bullas: Right. So I was going to ask two questions. Number one, I want to find out. So Power Ledger, what's the business model? What sort of services do you provide? Is it as a consulting model? Is it an equity model? Is it a hybrid? So what's your business model in terms of revenue growth?
Jemma Green: So depending on the product. So environmental commodity trading, so REC (Renewable Energy Certificate) trading is a percentage of the value of the certificates traded on our platform. And for Peer to Peer Energy Trading, it's a transaction feed based on the volume of electricity traded. And for the “Virtual Power Plant” (VPP), it's what's called a software as a service. So it's a daily fixed charge to access the VPP network. So it varies from product to product, but all of them show their revenue growth based on scale which is a function of the amount of users, the amount of RECs traded or the amount of energy that's traded.
Jeff Bullas: Great. So it sounds like you've got a very scalable model. Because you've got access to global markets, haven't you?
Jemma Green: Yeah. So I think that some of the challenges that blockchain faces, it's a new tech. So there's a lot more work that needs to be done around literacy for potential parties. So if you look at Rogers diffusion curve, which shows the adoption of new technologies, firstly, you have innovators trialing it then early adopters, then later adopters and then the majority and then the laggards. And so in the innovator and early adopters space, there's not a lot of scale. But then as those projects are proved up or the technology is evidence is working then there's greater scale and that's what we're seeing in our sector where we initially had MVP, (minimum viable products) and then proof of concept projects, and then commercial trials and commercial deployments.
Jemma Green: So we've just announced a commercial deployment in France with a retailer called it ekWateur, who want to get 200,000 customers in the next two years in doing a tracking piece. So it's a product called Vision. And what it means is, customers can specify renewables in something like, that I want solar from this farm or wind from that farm, as opposed to I just generally want renewable energy. And so they're able to support the particular generation assets that they would like and might be ones that they personally think are important or are close to them. So supporting localized electricity markets.
Jemma Green: And in the US we have a partnership with a company called Clearway Energy, and they have six gigawatts of renewables in their portfolio and a big trader of Renewable Energy Certificates. And so we see opportunities for large scale in that market as well, just a couple of illustrations, but if we get by and large we're starting to see that glide path from the small scale proof of concept projects to larger scale deployments.
Jeff Bullas: Yeah. Because you don't know if it's going to exactly work the way you envisioned is going to work until you actually dive in and start running it.
Jemma Green: Well, I think it's more that these utilities go back to the kind of fight or flight or innovate. They need to understand what's the commercial business model that's going to underpin these new products in the market. So they need to get their head around that and understand what are the implications for their existing portfolio and how can they design these products so that they are really fit for purpose. There's a lot of experimentation going on and innovation around the tariffs and the product presentation to the market. And so we are supporting clients around that with consulting services as well. But yeah, there's... I think, historically, utilities move at a glacial speed. But with that, they faster kind of turnaround time and recognition as they... Were getting it up to the pointy end of the market where they're like, "Oh, we need to actually make it whole here."
Jemma Green: So we're seeing kind of emerge in terms of more rapid decision making and literacy as well on the technology as well and our understanding of the benefits that it provides not just to trying piece of tech or you might see on your laptop Intel inside, but you don't actually know what that does. So they're now understanding oh, this is the benefit to us in our market.
Jeff Bullas: Right. So essentially, when you start a project you're bringing expertise and IP which basically educates the partner you're working with. And then you actually then can provide the technology then to actually then scale the revenue through whether it's a software as a service subscription or whether it's taking a clip of the actual trading. Is that correct?
Jemma Green: Yeah, I think that's a really important point that you make. We're not just about selling a piece of tech to the client. We really want to understand the market conditions they're in and what's of fundamental importance to them. Where they'd like to be in the next 12 months and longer and how could our technology support them in achieving those ambitions. And so that's the process that we go through in scoping projects and partnerships.
Jeff Bullas: Yeah, yeah. And you must come across a lot of different government policies around the world and regulation. So they're almost... I suppose each project is custom built from the ground up almost, but you bring the experience and expertise to that. Is that correct?
Jemma Green: Yeah. So the different regulatory environments. We get asked a lot, is the regulation a barrier? I think the answer to that is, in some markets, yeah it doesn't work. But there's plenty of places for which the regulation makes our tech work and it's fit for purpose. But understanding the market conditions in the regulation settings is key to designing a project. So for example, in Malaysia the cost of electricity for residential customers is much lower than commercial and the government wants to increase the uptake of renewables in Malaysia. So if they can facilitate peer to peer trading from residential customers to commercial, the ready customer can sell their solar electricity at a premium to the commercial customer and they're incentivized to put more solar in.
Jemma Green: But you've got to understand the dynamics in that market to come up with oh, that's a peer to peer project that would work really well there by contrast to Europe where provenance is more of a thing or on the East Coast of Australia where volatility from too much wind and solar is driving the adoption of batteries to Renewable Energy Certificates. Huge in the US, $3 billion issued each year, but traded via brokers. So it's true these insights that you can see where the opportunities are for the tech to really add value and drive efficiencies.
Jeff Bullas: Right. So what's the size of the team? Obviously, you've got a lot of expertise within your experience. So what's the size of the team today in 2020?
Jemma Green: About 25 staff in Perth.
Jeff Bullas: Okay, cool. And do you have any offices around the world? I suppose that was going to happen over time as you get I suppose traction in different countries or is it all done pretty well remotely?
Jemma Green: Yes.
Jeff Bullas: Or you send out like a SWAT team to actually do some work?
Jemma Green: I mean, pre COVID we've done a lot of traveling to these places. But we also do have channel partners in different locations. So in Thailand we have a partner there. Channel partner, BCBG. In Europe, we have a number of partners and in the US as well. And so they also assist us in getting our technology into those markets as well as us traveling out there as well.
Jeff Bullas: Yeah. Yeah, one of the biggest challenges we've heard from many entrepreneurs is actually scaling a business. So you are actually starting to scale your business by actually working with partners that actually have I suppose context and knowledge of an industry already on the ground. So do you see that as strategic for you moving forward to actually build that sort of distribution globally so you actually can scale your company?
Jemma Green: Yes, absolutely. I don't think we will have a generic way we do it. Different market necessitate different ways of doing that. But yeah, absolutely. I think that for us rapidly democratizing power and enabling citizen utilities is something that is really a fundamental importance to Power Ledger as a company and looking at ways that we can do that with speed is really important. So partnerships that can facilitate that is really key.
Jeff Bullas: Yeah. Because that is the biggest challenge to actually get your message out to the world and also your technology and your IP out there. You want to make... And also it's an arms race where you're playing with other companies around the world. And the arms race is not just technology, the arms race is actually distribution and sales. And quite often funding enables you to do that. I'm on the board of two startups and you have just got to keep running as fast as possible.
Jemma Green: Yeah. I think you do. You're going to drill a lot of holes like you would if you were mining oil and gas companies and see where the wells are. And yeah, it's speed to scale literally.
Jeff Bullas: Yeah. So what are some of the... So basically, you've got the funding, worked a way through using blockchain technology. So what are some of the other challenges you found with growing the business and managing it?
Jemma Green: Everything.
Jeff Bullas: How long have you got? There are many!
Jemma Green: Yeah. I mean, there's literally something every day. I saw this graph, I think if you Google like life as an entrepreneur it's this funny graph and it kind of goes like a zigzag. And again it goes, everything's going well, everything's going terrible. Everything's going well, everything's terrible. And it's part of a boiler room. It's a very intense experience and you are doing a lot of things and you don't know exactly which one is going to come off first or the biggest. And so yeah, it's kind of, it's quite a roller coaster. And it's not for the faint hearted and it requires a lot of effort. But when you start to say the proof points of it working that is inherently going really well and propels you forward, particularly also if you've got this big motivator, a bigger mission that you're trying to accomplish.
Jemma Green: But, I mean, you could... I thought I had a keen kind of commercial acumen by virtue of my banking history, but you don't realize not all that translates to working in a startup. There's so many things that you would do differently but by and large if you make enough good decisions over and above the ones that haven't worked out you're still thriving and propelling yourself forward and that's the way that we look at it. But yeah, there's challenges on every level and every front.
Jeff Bullas: Yeah. One the best quotes I heard was from Danny Iny recently. And he went to one of the top venture capitals entrepreneurs, venture capital fund COs. And he noticed his desk was completely clean, not even a computer on it. He's going... This is in San Francisco, right? And it was a working lunch sandwich on a desk. Anyway, he said, "Why have you got such a clean desk?" And this guy said, "Well, I've realized as an entrepreneur, that it's not the quality of work you do is the quality of the decisions you make." And I went, "Wow. That's so true."
Jemma Green: Yeah, it's absolutely a very powerful insight and if you make important decisions yeah, that can clear a lot of extra work for you. Well...
Jeff Bullas: This entrepreneur actually spends three to four hours a day walking. So I went, "Okay, that's interesting" But why to just to get his head clear and find some head space.
Jemma Green: I think that for me was the kind of big revelation from the sabbatical that I took. Because I went on all these walking trips and I wasn't a hiker or a walker beforehand, but I did find that it was just so good for my thinking. And you made that comment at the beginning about stepping out of the matrix, essentially. And I think that that provided new opportunities to think in ideas that ultimately have led me to the situation that I find myself in right now. But the walking as a kind of daily practice, notwithstanding the fact that you are still in the matrix I think provides access to that same kind of level of faculty and thinking and yeah, it's a bit hard for me at the moment to walk largely since because I'm nearly eight months pregnant, but...
Jeff Bullas: I had heard that rumor.
Jemma Green: Yeah. But I'm very much looking forward to being able to get around again at a faster speed rather than in slow motion.
Jeff Bullas: Yeah. Yeah. It's fascinating about you taking that nine month sabbatical and that provided the silence and the space for actually creative thinking and ideas to actually show up. And my biggest inspirations come from downtimes as well. I was between jobs 12 years ago, before I started jeffbullas.com and because I had the downtime I did a lot of reading. I had the space and time to actually observe and watch. And the opportunity came out of the silence. And this is something I think we often see constant busyness as a badge of honor. Look at frantically busy I am, but it's very hard for ideas and clarity to emerge from that when there's so much noise.
Jemma Green: White noise.
Jeff Bullas: Yeah, absolutely white noise. And I walked twice today and also cycled. And I actually meditate at least once a day and I give myself 20 minutes trying to quiet the mind. And most fabulous book I read in the last 10 or 12 years by Michael Singer ended up running one of America's biggest medical practices software companies called Untethered Soul. And he then wrote another book called The Surrender Experiment, which is basically about if you're willing to be silent and the world actually will show up in the most unexpected and glorious ways. And it doesn't mean you're not doing anything it just means you surrender to the beautiful imperfection that we have on this planet and as we are as humans. The Untethered Soul is one of the best books I've read in terms of the art and science of actually learning to be quiet and still the mind and you get stuff done.
Jemma Green: Yeah. I admire people that are able to sit and meditate. I find walking is my kind of equivalent of that. But you're right, I think whatever it is that gives you access to that stillness and peace. I think that's where true creativity originates from.
Jeff Bullas: Yeah. Well, for me what I've discovered too is that meditation actually isn't stopping just for 20 minutes. Is actually the art of just observing and trying to still the mind and noticing the chatter the other, the observer asking the soul observing the chattering person is like, if you're just aware first to actually go, "This person is chattering about crap, right? I don't know what even that..." Because it's uninvited chatter as we know. So there's things that are inspired by input such as what we watch and listen to. But then on the other hand, it's just conversations which about 90% of the conversation in the head just show up uninvited. And I was talking to a psychologist friend of mine recently and the name he gave to the chatter in the head was the “evil uncle”.
Jeff Bullas: They just show up and they knock and knock on your front door going, you should have done this, you should have done that, look what happened in the past, what's going to happen in the future? If you actually allow them into your home, you would actually kick them out if they're a physical person. So he called it the evil uncle. And I thought it was a very, very good analogy, frankly so... But I'm really just to hear your story, especially that the nine month sabbatical was from my observation, maybe the start of the inspiration when you met someone. And then the rest of the journey unfolded and you never... You said there was no grand plan to be an entrepreneur. So I'm aware of your time.
Jeff Bullas: What are some of the major lessons you've learned along the way in this journey as an entrepreneur that you would like to share maybe two or three things you've learned along the way that you think are really important for those that are actually thinking of starting a business or already running a business?
Jemma Green: Well, I think that you have to really back yourself and believe in yourself to take on a project like that. And that doesn't mean that you always get it right. So you have to accept that you're going to make lots of mistakes and that you don't want to be ashamed of those. You have to kind of wear them as a kind of badge of honor or have a failure resume of some kind and use them as learning experiences for you and other people that you work with. So I think that's really important. But you can't expect yourself to be perfect. And you're rapidly learning from those and getting beyond them, get back on the horse to use that kind of cliche.
Jemma Green: What else? I think, you have to really have something that you're passionate about on some fundamental level because the amount of work that's involved is profound and vast and if you don't have it you won't do what is required to get there. And then I think you need good people around you that you can have trust in, that can support you. And that's both in the business and also on the outside in your personal life. Really important because there will be trying times and you need to have people that you can count on, rely on for support. I think that they are critical sort of elements if you like.
Jeff Bullas: I think that's a very important observation. And so number one, you said that you need to back yourself and then learn from the mistakes. You will learn from that along the way. Number two, is to keep learning and especially in the digital world we live today. We're in the middle of the fastest changing business environment seen ever. And also getting great people and I think their great observations. So I would like to thank you very much, Jemma for making the time to come on the show and thank you for sharing your insights in your journey.
Jeff Bullas: I think you are in the middle of making an amazing change to the planet. And I look forward to actually watching Power Ledger grow and make a difference, because I think you're in a place where creating a sustainable planet that democratizes and gives power back to the people in terms of taking responsibility for it as well, I think it's an amazing space to be playing in. So I look forward to hearing more and we might even yeah, we might have a shot later on down the track to see whether things are unfolding. But thank you very much, Jemma for taking the time. It's been an absolute pleasure to meet you.
Jemma Green: Thank you. It's been great to be part of this conversation. Thank you for having me and have a great day.
Jeff Bullas: Thank you, Jemma.
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