Mainstream energy executives are getting into blockchain. A former boss at utility company Npower joined a blockchain startup aiming to help British homes using smart meter technology to switch their energy providers in a more streamlined manner.
After leaving German-owned Npower in 2015, Paul Massara has decided what his next move will be: joining the board of Electron, which is a 12-person company out of London hoping to revolutionize the smart meter market.
Mr. Massara left two weeks after his former employer warned about another upcoming unexpected drop in performance. His departure came after months of speculation about the safety of his job due to poor performance for Npower, which is the UK division of the German energy group RWE.
RWE boss Peter Terium said at the time: “At this time we need a chief executive who will focus on fixing the basic process improvements and has a track record of implementing operational process changes.”
Massara said before leaving: “The challenges that we have faced were tougher than we expected but we know what the problems are and are taking the right steps to fix them.” Massara had been in charge of Npower, one of the UK’s big six energy suppliers, for two years.
Electron, founded in November 2015, is exploring blockchain technology to record data on smart meters, placed on households to aid in the cutting of energy usage. The government, which plans for smart meters to be placed on every home in Britain by 2020 (a project projected to cost 11 billion pounds), has come under scrutiny by industry players. Vincent de Rivaz, chief executive of French utility EDF, believes first generation technology might not be interopable and could pose a problem when homes change energy providers.
Mr de Rivaz told a conference last week that crude meters “make things more complex for the moment when a customer switches supplier”.
Electron wants to aid outsourcing company Capita, and its subsidiary Data Communications Company, to improve the process of switching meters.
Massara departed Npower in the wake of decreasing profits at the company, with the belief that it is “clear blockchain will disrupt many markets including the energy market”.
Co-founded by Joanna Hubbard, previously an associate at consultancy McKinsey, and Paul Ellis, the former head of Europe at online trading platform MarketAxess, the online trading platform, Electron describes its vision as:
‘[T]o capitalize on the opportunities presented by the rapid changes in the energy market being driven by decarbonisation, decentralization, digitalisation and democratization. We aim to create innovative, collaborative solutions, based on the blockchain’s guarantees of a secure, robust and transparent platform. We will do this at the lowest cost whilst providing the greatest benefit to all market participants.’
Electron built a demo platform using Ethereum’s blockchain and ran through the system simulation data from 53 metering point, including 60 energy suppliers, in an attempt to create a mock up of the UK energy market. The company contends its technology could help the energy suppliers switches to happen twenty times faster than current means.
That’s the efficiency and cost-saving carrot it’s hoping will convince industry players to buy into a vision of upgrading their current “hodgepodge” of processes, says co-founder Paul Ellis, whose financial services background led him to the idea of applying blockchain to a sector that’s not renowned for innovating business processes without being marched into doing so by the stick of regulation.
“The energy market is built on technology that mostly is around 25 or 35 years out of date. It’s been built up over a period of time — it’s a hodgepodge of different systems. And it tends to be driven more by regulators than for example the financial services industry is,” co-founder Paul Ellis told Tech Crunch.
He added: “The financial services industry is incredibly focused on this, in large part because of one of their core functions is acting as a custodian of record. [But] the energy industry don’t see that as one of their USPs… [Yet it’s also] a highly competitive, heavily regulated industry operating over a shared infrastructure.”
Mr. Ellis argues blockchains are cost effective and that they do not require third party intermediaries. Electron has raised £400,000 (~$500k) in pre-seed funding from private investors. The company also received two Innovate UK grants (totaling £150k) to develop its technology.
Featured image from Shutterstock.
Last modified: March 4, 2021 4:55 PM