Blockchain applications are creeping into energy trading.
WePower, one of a growing number of energy blockchain hopefuls, has found early success in the European market with an agreement to tokenize data from the Estonian independent electricity and gas system operator Elering.
“WePower will integrate its blockchain and smart contract powered green energy trading platform into Elering’s Estfeed data exchange platform,” said the blockchain firm in a press release. “This will form a proof-of-concept system for Estonia, demonstrating nation-state scale tokenization of energy consumption and production data on the blockchain.”
CEO and co-founder Nikolaj Martyniuk said the partnership could allow WePower to fine-tune the alpha version of its platform, which will be tested in February and March, and sell the concept in other European countries with similar energy markets.
The company is planning to run simulations on the technology platform between February and August, and start trading renewable power in Spain in the fourth quarter of this year.
While the Elering agreement will give WePower access to data for testing, the blockchain firm is also finalizing a separate deal with an unnamed European services provider, involving real users.
While the company’s initial focus is on Spain and Australia, WePower is eyeing expansion to markets such as Portugal and Italy.
“Energy trading is a great opportunity for blockchain for the same reason it's being explored by the financial communities," said blockchain expert and GTM chairman Scott Clavenna.
Blockchain, he said, “can simplify and therefore reduce the costs and credit risks of trades by supporting near-real-time settlements with complete transparency through the use of smart contracts.”
There are many intermediaries currently involved in energy trading, which means trades often take days or months to settle. That makes trading an ideal application for energy blockchain startups.
WePower was admitted to a program called Startupbootcamp Energy Australia in December. As part of the program, WePower will be working to scale up its Australian operations with support from the energy company Energy Australia, the facilities management services provider Spotless, and the technology firm DiUS Computing.
After gaining entry to Startupbootcamp, “WePower will scale in Spain and Australia simultaneously,” the company said.
If WePower gets traction, will it start bumping up against trading competitors like Power Ledger?
Martyniuk denied that the move would put his company in direct competition with Power Ledger, which last October raised $24 million in Australia’s first cryptocurrency initial coin offering.
“Today, we focus on large-scale energy production,” he said. “Their approach is working with microgrids in the very beginning, working most with smaller customers and expanding from there. There are a lot of microgrids in Australia, and that’s very appealing for customers.”
On paper, though, the two blockchain concepts sound remarkably similar. WePower claims to be “a blockchain-based green energy trading platform.” Power Ledger similarly bills itself as a “blockchain-powered energy trading platform.”
Join GTM at the Blockchain in Energy Forum on March 8 in New York. Innovators from utilities, startups, investors and policymakers will come together for a full day of networking, dynamic conversations, and learning what the future may hold for this technology. From transactive energy, to supply chain management, to asset tokenization, this event will get everyone up to speed on the distributed ledger technology and its real-world use cases.