American PowerNet has selected Signature Bank’s digital payments platform, Signet to provide real-time payments within the renewable energy sector and to purchase power for Pennsylvania.
The Commonwealth of Pennsylvania, through its electric supplier relationship with American PowerNet, is the first entity in the country to purchase its power using Signets, which are digital representations of US dollars that settle in real-time on the Bank’s Signet Platform.
American PowerNet, an independent energy management company developing and providing wholesale electric procurement services to large retail clients, is offering the first end-to-end blockchain-enabled platform for purchasing renewable energy, Verde Blocks. Signet’s role in Verde Blocks is to facilitate payments for the delivery of energy.
Signet affords American PowerNet, via their Verde Blocks platform, the ability to settle with power generators on a daily basis once schedules are confirmed, compared with the traditional 30-day payment structure that has long been the industry standard.
The Commonwealth of Pennsylvania and the Lancaster County Solid Waste Management Authority have begun to incorporate Signet into their regular transactions of buying and selling power via American PowerNet’s leading edge Verde Blocks platform, a blockchain technology that provides large retail electric buyers direct access to sustainable power generators utilizing smart contracts protocols to automate many of the functions. The Verde Blocks platform helps large retail electric buyers and sustainable generators find one another.
By incorporating one of the key advantages of blockchain technology, a smart contract structure will create a single ledger and will automatically hold and disperse payments. Signet is the payment structure for Verde Blocks. One of the advantages of Verde Blocks is its ability to confirm with the Independent System Operator (ISO) each day the agreed-upon generation has been scheduled into the system. Subsequently, Signet, for which there are no transaction fees and no transaction limits, enables daily settlement to the generators for the delivery of their power, versus the industry standard of monthly, 10 days after the end of the 30-day delivery period.
American PowerNet CEO R. Scott Helm commented on incorporating Signet into the renewable energy eco-system within which his business operates and said: “The Commonwealth and the Authority are confident in both the structure and the security Signet and Verde Blocks provide since blockchain-based architecture validates transactions in real-time while deposits on the platform are FDIC insured. The approval of Signet by the New York State Department of Financial Services as the first ever blockchain-based payments system offered by a chartered bank to receive such support speaks volumes to the veracity of the structure and is a strong indication of the direction in which the electric industry is headed. The ability to transact in real-time with a bank-backed digital USD currency instills a new level of confidence for companies to participate. Generators find it attractive because their standard bilateral contracts have never before provided an avenue in which to be paid daily, based on confirmed delivery.
“The electric industry and the finance industry are changing quickly, right before our eyes. Verde Blocks’ automation of sustainable power purchases utilizing Signet provides a platform all participants can trust and rely upon. The Verde Blocks platform provides large retail electric buyers a cost-efficient, low-risk approach to purchasing sustainable power without entering into extended commitments. This marks an important and revolutionary shift within the energy ecosystem, which has been underserved to date. Using Signet’s USD blockchain-based payments platform will enable significant transformation throughout the renewable energy space as it fully automates a process within a multi-billion industry that hasn’t witnessed change in decades.”
Source: Company Press Release