Shell and Sumitomo Corporation invest in LO3 Energy to develop blockchain-based community energy platform
In 2017, Shell and fellow energy majors BP and Statoil, along with trading houses Gunvor, Koch Supply & Trading, and Mercuria; and banks ABN Amro, ING and Societe Generale, announced a collaboration to develop a blockchain-based digital platform for the energy commodity trading industry.
Earlier than year, Shell, Centrica plc, Elia, Engie, Sempra Energy, SP Group, Statoil ASA, Stedin, TWL (Technical Works Ludwigshafen AG), and Tokyo Electric Power Co (Tepco) joined forces to support the Energy Web Foundation (EWF), a non-profit organization the mission of which is to accelerate the commercial deployment of blockchain technology in the energy sector. (Earlier post.)
LO3 Energy—the first to enable peer-to-peer energy sharing—has developed a transactive energy platform to overcome the challenge of integrating distributed energy resources (DERs) into supply networks. LO3 says that its system can democratize the energy industry, allowing people to both consume and produce electricity at their home and business. LO3 already has investment from Braemar Energy Ventures, Centrica, and Siemens.
The investment from Shell and Sumitomo represents a landmark moment for LO3 Energy as we begin to scale our blockchain-based energy networks around the world. Energy is going through a revolution with renewable distributed energy resources increasingly picking up market share—but to integrate them efficiently we need to re-invent our energy networks.
These investments will help us accelerate the roll-out of less carbon-intensive microgrids, which help all stakeholders benefit through distributed, decentralized and decarbonized local energy transactions and demand response energy management on a building-by-building level.—LO3 Energy CEO Lawrence Orsini
The way energy is produced and consumed is changing from the traditional model of large-scale power stations with long-distance transmission to one where more is produced at the ‘grid edge’ by distributed resources (DERs).
There is now an opportunity to develop a circular economy around energy, connecting these resources together in local energy markets to produce both financial and environmental benefits for all stakeholders involved.
LO3 Energy’s transactive energy platform was pioneered with the Brooklyn Microgrid and the company now runs projects with partners around the world, in the UK, Colombia, Japan, Australia and the US.
Users set preferences on a dedicated mobile app, choosing how and when to use the local energy resources available to them and allowing them to select the specific sources they purchase it from.
The actual electrons flow through the normal grid transmission network, but the private, permissioned blockchain manages the definition of the energy source and the contract agreement to pay for it.
This enables a wide range of business use cases, including peer-to-peer energy trading, energy hedging for businesses, virtual power plants, dynamic electric vehicle charging and demand response.