How DAOs work in the Energy Sector?
A decentralized autonomous organization (DAO) is a type of organization that is governed by its members through a set of rules encoded in a smart contract. Each microgrid have a DAO that governs the LEM (Local Energy Market) and the VPP (Virtual Power Plant) which is associated to a geographic area.
Key points:
Transparency: All DAO transactions are recorded on the Green Grid Network (GGN), which makes them transparent and verifiable.
Decentralization: DAOs are not controlled by any single entity, which makes them more resilient to censorship and fraud.
Efficiency: DAOs will automate many of the tasks that are typically performed by humans in traditional organizations, such as accounting and decision-making.
DAO Organizational Structure
The decentralized energy management system GGN uses a two-token model, a utility token and governance token. The governance token is used by the DAO to govern the microgrid and the utility token for access to services or products.
DAO key basic elements:
Members: DAO members are represented by tokens, which give them the right to vote on proposals and participate in the microgrid governance.
Members Groups: DAO members groups(Minimum of two members) are represented by tokens delegated by its DAO members, which give them the right to vote on proposals and participate in the microgrid governance.
Proposals: DAO members groups can submit proposals for new features, changes to the microgrid rules, or other actions. Proposals are typically voted on by all members of the DAO.
Smart contracts: Smart contracts are used to implement the DAO's rules and automate its operations.
Geographic area allocation for a microgrid
A country grid is normally divided into several microgrids. For the purpose of this example we will consider only one geographic area. A geographic area value has several factors involved, for this example the distribution of governance tokens will be equal to all.
Geographic area
The geographic area have a total allocation of 200 governance tokens. (The mechanism for determinate a geographic area value in governance tokens, will not be depicted in this example.)
Members Groups per geographic area:
Generation company (companies/prosumers that produces electricity for the microgrid), holds 50 governance tokens.
Transmission company (companies that operates the high-voltage transmission lines that carry electricity from microgrid A to microgrid B), holds 50 governance tokens.
Distribution company (companies that operates the low-voltage distribution lines that deliver electricity to consumers and businesses), holds 50 governance tokens.
NGO (non-governmental organization)/Trust (representing consumers that delegate governance tokens to them), holds 50 governance tokens.
Note: The Supply company (company that buy electricity from the wholesale market, sell it on to their customers and are responsible for billing customers) is obsolete in a blockchain because the Generation companies are able to sell energy directly to the consumers using smart contracts via utility tokens.
In simple terms how this works?
If a "Generation company" wants to offer their services to a geographic area (microgrid). It will need to submit a motion for that microgrid. This microgrid will have infrastructure operated by a Transmission and Distribution company and potential interested consumers (normally represented by a NGO/Trust). The "Generation company" will have to make a motion, presented to the governance tokens holders for that microgrid plus the Foundation Members Group (Energy Regulator). The Foundation Members Group act as the ecosystem guardians. A motion will need a majority of votes to to be approved. If it passes, the "Generation company" is allowed to buy the governance tokens allocated for that area for the position Generation company.
Governance tokens allocations for Generation, Transmission or Distribution companies are time-bound. Meaning this allocation will work like a lease where by the end of each period a new motion will need to be presented to the governance tokens holders for renewing the allocation.
