Developing cheaper, cleaner energy has been the goal of many companies for decades. Now, UK’s largest energy provider looks to harness the power of the blockchain to advance its efforts. Based on how the blockchain has already proven its capability in a number of industries, it should prove to be very beneficial for a greener environment.
Centrica has begun trialing blockchains using distributed ledger technology (DLT) to enhance the company’s Local Energy Market (LEM) under its Exergy program. The LEM is designed to offer peer-to-peer trading between consumers and will be led by a partnership with blockchain startup LO3 Energy, a company based out of New York that provides blockchain solutions to energy companies
The DLT system will offer members of the LEM the ability to buy and sell energy production not only to the National Grid (NG), but to marketplace participants, as well. Centrica has already gotten involved in a similar project, the European Power Exchange’s SPOT program. The program enables participants in countries such as Austria, Germany, France, Belgium, Switzerland, the Netherlands, Luxembourg and the UK to buy and sell excess power to each other.
Exergy will be distributed to Centrica’s LEM participants. The LEM was initially announced in December 2016 and rolled out in February 2017. In just over a year, 200 Cornish businesses and large energy consumers have signed up for the program. The businesses produce their own energy, subsequently selling back to the NG, or to other businesses, any portion that it doesn’t use. The LEM is the ideal target for blockchain technology, as it is, by nature, a decentralization of the energy industry.
Centrica may be the biggest to undergo the transformation to blockchains, but it isn’t the first. London’s Verv energy provider was the country’s first to conduct a physical energy trade over the blockchain. The fact that Centrica is well connected gives it a leg up, and will help to expand the use of the technology at a much faster pace.
Centrica’s business relationship with LO3 Energy was already established prior to the launch of Exergy. A micro-hedging market for Centric’s business customers is about to get underway, which will allow companies to place orders for power hedges. These orders will then be aligned with the best available offer.
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