The NRGcoin mechanism replaces traditional high-risk renewable support policies with a novel blockchain-based Smart Contract, which better rewards green energy.
For every 1kWh of green energy consumers pay 1 NRGcoin directly to the Smart Contract. This ratio (1kWh=1NRGcoin) always holds, regardless the retail value of electricity. The Smart Contract then pays all grid fees and taxes to the DSO from the coins paid by the consumer. The Smart Contract then validates the reported injection of green energy by prosumers using a variety of methods.
If all reports check out, the Smart Contract mints new NRGcoins and rewards prosumers for their injected green energy. Prosumers can then sell those coins on a currency market, or use them to pay for green energy later on. The currency market is where consumers buy their NRGcoins from in order to pay for their consumption. When energy is paid, the associated coins are not destroyed, but remain in circulation. To prevent excessive inflation, the minting rate decreases with time.