The energy sector is bullish on blockchain. Reports on January 19, 2018, indicate that prominent Japanese energy provider Tokyo Electric Power Company (TEPCO) has chosen to invest an undisclosed sum in UK-based Electron, a blockchain technology solutions provider for the energy industry. The news comes a day after global energy provider and oil company Royal Dutch Shell announced an investment in Applied Blockchain with its trading subsidiary, Shell Trading International.
The interest in blockchain-related partnerships by the utility giants represents an overarching trend of old-guard businesses turning to a new generation of startups to help craft a sharing economy for electrical power.
In correspondence with ETHNews, Maki Muryama of TEPCO's international public relations group said that the peer-to-peer energy transaction marketplace powered by blockchain technology may become popular because there is a growing demand for renewable energy and a push for "local production for local consumption."
In reference to the implementation of a peer-to-peer network that would enable the sharing of surplus energy between ecosystem participants and devices, Muryama said, "We believe that blockchain can be the basic technology making such a thing possible. We estimate that the availability of P2P electricity … will expand customers' options of the electricity services and will improve its conveniences."
Electron has formerly been the recipient of UK government grants to produce a blockchain-based solution suitable for energy providers. Electron has also used the Ethereum blockchain to test a pilot program for a decentralized energy grid, so it may be possible that Ethereum will play a role in whatever projects Electron plans for TEPCO.
For its own part, TEPCO hasn't been shy about experimenting with blockchain technology. As a company formed from the ashes of World War II in an effort to rebuild Japan's infrastructure, TEPCO has always been keen to adopt new technologies. A previous investment in blockchain by TEPCO includes that of the peer-to-peer energy trading platform Conjoule GmbH.
TEPCO has also proven it can play nicely with others, working in concert with members of the Energy Web Foundation (EWF) to promote the commercial acceleration of blockchain technology.
Membership in EWF is an attribute shared by both TEPCO and Shell; Shell has also looked at working with fellow industry competitor BP to develop a blockchain-based platform meant to host digital commodities. However, Applied Blockchain would appear to be Shell's first investment in blockchain-based startups. Johan Krebbers, Chief Technology Officer for IT at Shell Global Solutions International, described blockchain technology as a game-changer. "Blockchain applications have huge potential to shake up how we do things in the energy industry from streamlining process, to simplifying how we work with our suppliers and serve our customers," said Krebbers. "Investing in Applied Blockchain is part of our commitment to use digitalization to create value in our core business and develop new business models."
Given the time it will take to develop energy-sharing grids, it's unlikely that a transition towards a blockchain-based energy platform will take place overnight. However, a future of efficient peer-to-peer power-flow grids doesn't appear to be that far off, given the efforts of these major industry players.