The content in this blog should not be considered as financial advice, but rather as a personal opinion.
Projects to watch: Starpower – A Decentralized Energy Network
Starpower ‘s core mission is to build a global, decentralized energy network that enhances energy efficiency and supports the transition to a zero-carbon world. The project’s foundation emphasizes values aligned with Web3 principles, such as stakeholder involvement and individual sovereignty, while also addressing global climate challenges.
Connecting air conditioners, home storage batteries and electric vehicles
Providing usage-based algorithms to save on electricity bills and addressing renewable energy supply volatility, aiding global energy transition.
Starpower is the largest energy DePIN on Solana.
What is Starpower
Starpower is a decentralized energy network that connects energy devices like air conditioners, home storage batteries and electric vehicles. We provide usage-based algorithms to increase energy efficiency, save on bills, and reduce energy system volatility by coordinating device charging and discharging accordingly. The volatile renewable energy supply is the bottleneck for global energy transition, and we are building the network for this decades’ trend.
Similar to how Uber aggregates vehicles globally, Starpower aggregates energy devices worldwide and responds to various application tasks. Whether it’s home air conditioners, water heaters, electric vehicles, or air conditioning and energy storage batteries in malls and factories, all can be linked to Starpower via hardware or software to earn $STAR rewards. These distributed energy device resources form a network effect, realizing applications such as virtual power plants on the energy internet, demand response, energy efficiency, and energy data monetization.
Starpower Missions & Values
The Starpower Foundation is committed to building a global network of energy devices, returning the value of the network to every user, with the mission of achieving a zero-carbon world as soon as possible.
The Problem Starpower claims to Solve
In recent years, the rapid installation of renewable energy has caused instability of grid equilibrium, power outages are happening more often. Simultaneously, the advancements in AI have fueled a surge in demand for electricity, with AI applications doubling their computational power requirements every three months and nearly tenfold every 18 months. This exponential growth has put a strain on the global energy system.
We currently face two significant energy challenges:
Power Shortage: Increasing energy demand, driven by widespread AI applications that consume large amounts of energy.
Grid Instability: The need for carbon neutrality, which requires the use of clean but often unstable renewable energy sources, leading to grid fluctuations.
To tackle these challenges, it is essential to interconnect energy devices into a virtual power plant (VPP) for unified scheduling. To better understand the reason behind, we can compare unstable renewable energy sources to monsoon. Monsoon annually brings flood and drought, while photovoltaics panels daily brings “flood” in the daytime and “drought” at night. To control and manage the monsoon, human build dams to “stablize” water. And now we build VPP as dams to “stabilize” electrons.
Now, the question becomes how to build more and big “electron dams”! Starpower addresses this problem by aggregating underutilized energy resources (such as EV, Batteries, cryptocurrency miners). These energy resources form a decentralized energy network, enabling engineers to obtain vast power in an easily accessible, customizable, cost-effective system. Since these energy resources are quite decentralized, we believe Web3 is the most efficient way to build “electron dams” globally.
Energy Internet and Virtual Power Plants (VPP)
The Energy Internet weaves energy resources into a tightly interconnected network, much like the internet connects information and people. In this network, various energy resources such as solar power, wind power, and energy storage devices collaborate to create a more efficient, flexible, and sustainable energy ecosystem. This represents not only a technological leap but also our bold vision for the future of energy.
Virtual Power Plants play a key role in this Energy Internet. Imagine a power plant that doesn’t physically exist but can aggregate dispersed energy resources through high-tech means, transforming them into a powerful force of electricity. VPPs leverage cutting-edge software and network technology to tightly integrate renewable energy sources, energy storage systems, and demand response devices—elements of the energy sector that are traditionally separate and independent—providing strong support for our power grids. This disrupts the concept of traditional power systems, bringing us a greener and smarter energy future.
Renewable energy plays a crucial role in addressing climate change. However, due to the instability of renewable energy sources, a smart and efficient system is needed to ensure the balance of energy supply and demand, which is the value of Virtual Power Plants. For example, in California, USA, a region exemplary for its use of renewable energy, the photovoltaic power generation can meet all the electricity needs of the area during certain periods. However, as shown in the following figure, the fluctuating nature of renewable energy sources has significantly impacted the stable operation of California’s power grid. Additionally, the volatility of generation and consumption sides caused by renewable energy and extreme weather conditions has led to extreme electricity prices in power wholesale markets in places like the United States, Australia, and China.
A Virtual Power Plant (VPP) is created by integrating dispersed renewable energy resources and energy storage systems into a unified network, making the management and dispatch of energy more flexible and efficient. Home appliances like air conditioners, water heaters, electric vehicles, commercial lighting in malls, and power equipment in factories are examples of distributed energy devices that need to be linked to a virtual power plant. However, due to the highly dispersed nature of these devices and the lack of communication standards, VPP operators face challenges in connecting these long-tail distributed energy devices into a unified network. Establishing a global network that links these long-tail distributed energy devices would significantly boost the development of the virtual power plant market. It would also mean accelerating the integration of more renewable energy devices into the grid, hastening the realization of a zero-carbon society.
$1 Trillion Market Size
Generally, the electricity managed by Virtual Power Plants accounts for 5%-20% of the total electricity consumption in their respective regions. This percentage is higher in areas with a greater share of renewable energy. According to statistics from the International Energy Agency, the total size of the global electricity market in 2022 was approximately 3 trillion USD, suggesting that the market size of global Virtual Power Plants could conservatively be estimated to exceed 100 billion USD. Additionally, the market size for energy efficiency, energy data, and carbon credits, all of which are involved in the Starpower project, is also estimated to be in the tens of billions of dollars.
Furthermore, as predicted by Elon Musk, the demand for electricity in 2045 will be three times what it is currently, which will drive a greater need for interconnected energy networks and dispatch.
Prof. Martin Green, the Father of Photovoltaics, also mentioned that “Our electricity supply system was designed for fossil fuel generators – it’s not well-suited for the energy sources of the future. That needs to change, and virtual power plants (VPP) are a way to maximize the benefits of solar.”
Beyond the aforementioned revenue scale, Starpower can also bring significant economic and social benefits. According to a survey by The Economist, to achieve the global net-zero carbon goal, the global power grid will need an annual investment of 1.1 trillion USD by 2050. Virtual Power Plants and energy storage batteries can effectively reduce this expenditure. According to data from the U.S. National Renewable Energy Laboratory, Virtual Power Plants could help reduce greenhouse gas emissions by 60 million tons by the year 2050.
The business models of existing participants in the energy market still rely on traditional models requiring heavy capital and operational investment. In contrast, Starpower adopts the DePIN (Decentralized Physical Infrastructure Networks) model to build its energy network. Those who join the Starpower network are not only builders of the network but also its owners and beneficiaries. The capital expenditures (CapEx) and operational expenses (OpEx) of the Starpower network are shared among all participants, which allows the pricing of Starpower’s products and services to be significantly lower than market levels.
Decentralized Energy and DePIN
With the emergence of zero-carbon and zero marginal cost electricity, along with a large influx of digitized energy devices into the power system, traditional independent power systems are evolving into the Energy Internet. Consequently, the volatility issues of the Energy Internet are being addressed through software solutions, namely Virtual Power Plants (VPP). Key global players in the VPP sector include companies like Tesla, OhmConnect (US CA), David Energy (US NY), Con Edison (US NY), Sunrun (US), Virtual Peaker (US), ShiftedEnergy (US Hawaii), Octopus (UK), Next Kraftwerke (Germany), SwitchDin (Australia), Itochu (Japan), each addressing the instability issues of the energy network from different angles through software solutions.
