Several major energy firms are partnering on a new blockchain-based trading platform.
BP, Shell and Statoil are backing the new suggested platform, which represents the latest utilization of the tech to the energy space. The group also includes ING, ABN Amro and Societe Generale, as well as trading firms, Gunvor, Koch Supply & Trading, and Mercuria.
The idea is that the blockchain-powered platform for energy trading will eventually be open to all market participants. Those involved in the effort say the platform will be controlled by an independent entity, with a plan to be fully operational by the end of 2018.
“Earlier this year another joint initiative among some members of the consortium (ING, Mercuria, and Societe Generale) presented compelling results with what we understand to be the first blockchain prototype test in the sector. The experiment involved an oil cargo shipment containing African crude oil which was on its way to China. The results of the experiment demonstrated that a blockchain based platform can greatly improve the efficiency of certain processes,” an ING representative Carolien van der Giessen told CoinDesk in an email.
There have been several experiments using blockchain technology to track energy trading over the summer BP and Eni tested gas trading in June, Reuters reported.
“There are uses for blockchain that could give us a competitive advantage,” David Eyton, head of technology for BP said. “Blockchain can be much more efficient in terms of speed and verification of transactions.”
Two other companies, Enel and E.on, have also conducted trials using a different blockchain platform called Ponton, Coindesk reported.
Finally, one of Australia’s largest electricity providers, Origin Energy, is currently testing a program called Power Ledger a peer-to-peer energy trading platform, Enterprise Times reported.
“While it’s still fairly early days for this technology, we are keen to explore the potential benefits that peer-to- peer energy trading could offer our customers. Power Ledger is one of a number of emerging technologies we’re currently exploring, which we believe could help us meet the changing needs of our customers.We hope the trial will help us better understand the value proposition for consumers, as well as the regulatory and technical implications of the peer-to- peer trading model,” Tony Lucas, Origin Executive General Manager, Future Energy said.
That’s not the only corporate use for blockchain; Eyton said oil and gas trading was just one of many potential uses for blockchain across BP.
“In a big company, with lots of different corporate entities, you have to manage financial settlements and reconciliation between different parts of the business,” Eyton told the Financial Times. “A lot of that lends itself to blockchain.”
Meanwhile, 6 banks are working to replace clearinghouses and other back-office firms that are used as middlemen between buyers and sellers of fiat assets by creating “Utility Settlement Coin,” (USC). The world is going onto the distributed ledger FinTech of blockchain.
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