The UK’s biggest energy provider, Centrica, is trialing blockchain technology in a bid to offer cheaper, greener energy to its gas and electricity customers.
It is using Distributed Ledger Technology (DLT) will be used as a means to enhance Centrica’s Local Energy Market (LEM), which is designed to offer peer-to-peer trading between its energy consumers. The company, which owns British Gas, has partnered with blockchain startup LO3 Energy.
The New York-based company specializes in providing blockchain technology solutions to energy companies and the partnership will see a distributed ledger system rolled out to members of the LEM; a program that enables local businesses and consumers to buy and sell flexible energy production to the National Grid and to marketplace participants.
LO3 Energy specializes in the provision of data management and blockchain technologies to energy industry participants. Centrica will be using the company’s data platform, Exergy, and will be trialing a range of energy transactions including peer-to-peer trading. It uses blockchain technology to store and transfer details of transactions, and its accompanying app can be used by marketplace participants to buy and sell energy at the touch of a button.
The company has been making waves in the energy industry, signing a deal with the European Power Exchange, known as EPEX SPOT, to develop a platform that would enable participants in France, Germany, the UK, the Netherlands, Belgium, Austria, Switzerland, and Luxembourg to buy and sell excess power to one another.
The Exergy platform will be rolled out to participants in Centrica’s Local Energy Market, or LEM. The LEM was announced in December 2016 and launched in February 2017. In more than a year, the UK’s leading energy supplier has signed up approximately 200 Cornish businesses and large energy consumers. It enables businesses to produce their own energy and sell any surplus back to the National Grid, or directly to other local businesses via the market.
The LEM represents a step towards decentralization of the energy industry, so it is seemingly a perfect fit for blockchain technology, which can further decentralize the process.
Mark Hanafin, Chief Executive of Centrica Business, said “The proliferation of digital technologies is having a significant impact on the energy industry, allowing us to find new and better ways of delivering energy and services to our customers,” before going on to say that it is “an exciting opportunity for us to test blockchain technology beyond the theoretical and put it into practice.”
Centrica isn’t the first company to dip its toe in blockchain waters. London based Verv completed the UK’s first physical energy trade on the blockchain. However, Centrica’s high profile as the country’s biggest energy company, and its global reach, will help bring the technology closer to the fore and give it more mainstream attention.
This isn’t the first partnership between Centrica and LO3 Energy. The two are set to work on a micro-hedging market for Centrica’s business customers. It will enable firms to place their own orders for power hedges, and these orders will be matched to the best available offer.
They have also collaborated with a host of global power companies to develop commercial blockchain services that will help save consumers money and provide a more efficient service. The collaboration also aims to further increase the availability of renewable energy available to energy consumers.
Images from Shutterstock.