24 European energy companies, including E.ON, EDF, RWE and the Swedish state-owned energy company Vattenfall, have begun peer-to-peer trading in the wholesale energy market using blockchain technology.
“The actual potential of blockchain technology lies in disintermediation. This creates true disruption; everything else is incremental innovation or optimization.
Enerchain is one of the very rare projects outside the financial sector, which has real potential for disruption,” said Thorsten Kühnel, E.ON’s Vice President of Future Lab.
Enerchain is a Tendermint blockchain based trading software by Ponton, an IT consulting company that says they are blockchain agnostic and even agnostic regarding whether a blockchain should be used at all or whether centralized solutions are preferable.
They say the trial will last for all of 2017, with a crucial phase of the project being during winter when they are to start live trading on Enerchain, which would be a first at this scale according to Proton.
“On average, we enter into 1,400 deals per day across all energy commodities and markets. Each deal causes transaction costs and has to be processed in our trading, reporting and controlling systems.
Once we are able to apply blockchain technology in energy markets, we will be able to operate more efficiently and at lower transaction costs,” says Kilian Leykam, Manager Business Development Trading at Vattenfall, a Swedish state owned energy company.
Energy is one of the more surprising industry that has embraced blockchain technology and appears to be far ahead of others, beaten only, perhaps, by the supply chain industry.
Royal Dutch Shell and many other energy companies spanning continents have, seemingly in parallel, joined the Energy Web Foundation which employs Ethereum’s blockchain technology, to explore its use.
A race, therefore, appears to be underway as established companies strive to utilize the latest technology to maintain their position or expand it further, with likely winners and losers at the end and even, perhaps, re-organization for those who made the wrong bets as the march of innovation continues.