Chain of custody, in renewable energy, is the record of who has owned and operated an asset and why the important decisions about it were made. When an asset changes hands, the documents usually make the trip; the reasoning behind them usually doesn't. I call that context erosion, and it matters for tokenization because ownership can move on-chain in seconds, but an asset's history can't be rebuilt that fast.
When I first started exploring real-world asset (RWA) tokenization, I was focused on ownership and how it should be represented. But ownership was rarely the hardest part; the real challenge was reconstructing the asset's history. A few years ago, I worked on a newly acquired portfolio of existing power plants where the documentation was messy and, more importantly, incomplete. It created friction across departments and became a bottleneck. That's typical: a single project can grow into years of contracts, studies, financing documents, operational reports, maintenance records, and stakeholder communications.
If a project like that changes hands again in five or ten years, how will the next owner understand not just what happened, but why it happened?
Renewable energy assets can last for decades, while the organizations, systems, and individuals involved with them often change much more quickly. Preserving information is one challenge. Preserving context is another entirely.
Having a comprehensive data room is no longer enough. We tend to record what was done and when, but rarely do we record why a decision was made and under which constraints or circumstances. If you look back and think about why an asset underwent a specific intervention, you might find yourself struggling to comprehend the outcome.
Context erosion: when information survives but understanding disappears
Context erosion is the gradual loss of institutional knowledge, assumptions, rationale, and decision history that originally supported the asset. As assets change hands from developer to owner, owner to investor, or fund to fund, information may survive while understanding disappears. Each participant contributes decisions, assumptions, and knowledge that shape the asset. The project remains, but usually the people don't.
This brings us back to the fact that it is not about the absence of data — there is plenty of it — but the absence of understanding. If I were an investor about to buy an asset, I would want to make sure what assumptions sit behind the financial model in the first place, and then check if that's what the asset history is telling us.
Why renewable energy assets are especially exposed
I have seen many transitions in this industry, and each one introduces blind spots in knowledge transfer. Everything starts with the developer selling the project, then construction financing, refinancing, portfolio acquisitions, asset management transitions, and most frequently O&M provider changes. While the project documents are delivered, most information remains with employees, consultants, project managers, engineers, and contractors. It's not surprising that a 25-year-old plant might have four owners, three different asset managers, and several service providers, while the EPC filed for bankruptcy and there are no remaining members of the original development team.
What does that look like in practice?
A solar farm I worked with had been producing less than expected for some time. I only understood the full picture later.
Years before I was involved, the project had been studied closely. Inspections, engineering reviews, and performance analyses had pointed to a combination of design and installation issues that limited production. The diagnosis, in other words, had already been done.
The harder question had been economic. It seems remediation was weighed and set aside on cost grounds: the additional energy wouldn't have justified the work. That's a reasonable conclusion, and quite possibly the one we would have reached ourselves. But if the reasoning behind it was ever written down, it didn't make it through the transitions that followed.
By the time I took the project on, the people who had done that work had moved on, and the context went with them. We noticed the underperformance ourselves and commissioned our own studies. Consultants were hired, the site was inspected again, and engineers worked the problem from scratch.
We couldn't tell whether the issue had already been investigated, what alternatives had been considered, what assumptions drove the cost-benefit analysis, or why remediation had been set aside. As it turned out, those questions had been answered before, so we spent time and money rebuilding knowledge that already existed.
And the decision is only the most visible part of what goes missing. In my experience, much of what's known about an asset never makes it across a transaction. Observations from the field, issues raised and then deferred for lack of budget, and concerns discussed but never formally reported all live in people's heads, inboxes, and conversations. None of this is negligence. It's how operations work when budgets are tight and priorities compete.
This isn't about any one owner. It happens in most transactions I've seen, ours included. Assets move between owners, managers, and teams; the context usually stays with the people who were there.
Why is this a risk for investors?
Assets frequently outlive the organizations that built them, so put yourself in the shoes of an investor looking at a project ten years after commissioning. Checking performance against the financial model isn't enough; you want to know whether the assumptions behind that model still hold. Even with good advisors, deals move fast, and when closing becomes the goal, knowledge transfer becomes secondary.
For an investor, context erosion translates directly into risk that's hard to price — hidden operational issues, unverifiable assumptions, and compliance gaps that sit behind an otherwise clean financial model. Document quality is not just an administrative pain point, but rather a real underwriting issue.
Why does this matter for tokenization?
Tokenization only works if the underlying asset can be underwritten, and that depends on how well its history can be verified. Judging quality is the investor's job; the industry's job is to make that easier, quicker, and more transparent, with custody infrastructure that survives time and changes in control. Smart contracts are often viewed as transaction engines, which they are, but they might also, interestingly, act as an anchoring base. Rather than storing entire documents on-chain, they can create immutable evidence trails for key events. The objective is not to store every file. It is preserving evidence that allows future stakeholders to reconstruct the asset's history.
Over time, these records become a chronological map of key decisions and events.
What if every important event in an asset's lifecycle could be recorded, verified, linked to supporting evidence, and preserved regardless of who owns the asset?
This way, the asset would retain its memory even when participants disappear, creating a real opportunity: a durable chain of custody for knowledge, not simple digital ownership.
Take the solar farm again. If the previous owner had logged its decision not to remediate — the date, the studies it rested on, and the cost weighed against the expected production gain — as a time-stamped record linked to the supporting memo, we could have read the answer in minutes instead of paying to rediscover it.
It won't capture everything that lives in people's heads. But it can make the decisions that matter easy to record at the moment they're made.
One of the most unexpected lessons I've learned while building in this space is that trust is rarely lost all at once. More often, it erodes gradually as context becomes harder to access and decisions become harder to trace.
That's why I increasingly think of tokenization as more than a capital markets innovation. At its best, it can also be a mechanism for preserving trust across the lifecycle of an asset. Whether the industry ultimately adopts that approach remains to be seen, but I believe the underlying problem deserves more attention than it currently receives.
