FRANKFURT (Reuters) - European utilities plan to begin some direct trades with one another using blockchain technology within months, hoping to stay ahead in a world in which individuals may eventually sell green energy to one another.
The distributed ledger technology that underpins the bitcoin currency has already been tested by energy operators for wholesale trading, but it will go live with just a few selected electricity and gas contracts to start with.
The initiative, Enerchain, is a forerunner of more possible uses of the technology by established energy players and wider options explored by a raft of start-ups to harness its potential - many of them years away from execution.
Regulators are seeking to control this strategic sector to avoid security issues, digital infrastructure is lagging and players must agree to share data and avoid privacy breaches.
While tentative, Enerchain is a test of the utilities’ ability to protect their margins by dominating novel automated trading architectures matching energy producers with each other and also with users.
Apart from staving off competition from more agile digital companies, it could help speed a sector shift in Germany from fossil fuels to renewables, bypassing nuclear, highlighted in a reorganization of E.ON and RWE this month.
German IT company Ponton has worked with 39 power and gas traders to build the peer-to-peer platform since 2016.
Managing director Michael Merz told Reuters its members will choose contracts to go live with as soon as they set up a legal entity to pool budgets, probably in the second or third quarter of 2018, his first detailed comments on the timeline to mainstream media.
The companies, which include prominent names such as Italy’s Enel, Germany’s E.ON and Sweden’s Vattenfall [VATN.UL], were driven by the need to lower transaction costs in an era of growing competition and energy supplies, he said.
“Publishing orders and transactions via blockchain can replace trading via brokers,” Merz said. “We have developed an order execution process that works just like a typical OTC (over-the-counter) market front end.”
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19 December 2018
20 December 2018