Centrica is undertaking a trial to explore how blockchain technology could revolutionize the way consumers buy and sell energy.
Delivered in partnership with energy blockchain company LO3 Energy, the project will see the roll out of the technology in Centrica’s £19m Local Energy Market (LEM) programme in an effort to explore how new approaches could disrupt the traditional energy model.
Centrica says the blockchain trial will take this a step further, by testing a range of energy transactions including multi-party, peer-to-peer trading across 200 business and residential participants using LO3’s new Exergy platform.
Centrica is also working with LO3 on a trial in North America to deliver the world’s first micro-hedging market for business customers. Run by the company’s North America Business unit, Direct Energy Business, the trial aims to cut costs and improve efficiency for commercial businesses in Texas through an innovative new business-to-business energy network.
Unlike the traditional model where businesses manage their electricity procurement through fixed price contracts, or power purchase agreements, Direct Energy Business will use LO3’s platform to offer large commercial and industrial companies the opportunity to place their own orders for customised power hedges that are then matched with the best offer in a competitive system.
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.
“This is an exciting opportunity for us to test blockchain technology beyond the theoretical and put it into practice, developing innovative new solutions that will empower consumers in the UK, North America and beyond to take control of how they engage with energy.”
Last year, Centrica Innovations invested into LO3 Energy as part of a £100m programme to identify, incubate and accelerate new technologies with the potential to transform the way we live, work and move.
Lawrence Orsini, chief executive of LO3 Energy, said: “Exergy is designed to empower new prosumers while enabling traditional industry players to shift business models and find their place in the energy market of the future. Our partnership with Centrica and Direct Energy will trigger adoption for Exergy at a scale that will bring trustworthy disruption to the industry.”