Electron is working on the project with heavyweights including EDF and Shell.
A U.K. consortium led by blockchain technology developer Electron aims to start testing an “energy eBay” in the first half of this year.
The consortium is looking to test bilateral trading toward the middle of the year, said Electron’s chief operating officer, Joanna Hubbard, who will be speaking at the Blockchain in Energy Forum hosted by GTM in March.
The trading platform will be “a shared marketplace for energy assets to respond to pricing signals,” she said.
It aims to support new flexibility markets being launched by grid operators and utilities.
Last August, for example, the electricity company UK Power Networks unveiled a flexibility program, the first of its kind in the United Kingdom, “calling on energy resources to offer their services to support the distribution network during periods of high electricity demand,” according to the company.
Such contracts had been used to support the national power system, but rarely on local electricity networks, UK Power Networks said.
Their use is expected to rise, however, with an increase in distributed generation sources and electricity consumption points, particularly as electric-vehicle charging stations roll out across the U.K.
Renewable energy producers are also expected to benefit from a blockchain-backed marketplace, to improve plant profitability and reduce the need for curtailment.
Danish renewable power giant Ørsted, for instance, already offers a flexibility service portfolio to help U.K. businesses see when it would be most cost-effective to consume energy or provide balancing reserves.
For Ørsted and other companies with significant wind or solar assets, it makes sense to help businesses use energy more flexibly in order to accommodate a greater share of intermittent renewable generation.
The platform being developed by Electron and its consortium partners, which include National Grid and Siemens, will allow such trading to happen “in a more granular way,” Hubbard said.
Electron has been working for two years on an underlying component for energy trading — a registration system that does not require a central coordinating entity because it is based on the blockchain.
The energy trading marketplace was bolstered by a £630,000 (USD $900,000), 13-month grant that Electron won last year. Electron has been working on the project, with Siemens and National Grid, for the last six months.
As the project got underway, “it quickly became evident the hardest thing wasn’t the tech, but getting the industry buy-in,” said Hubbard.
As a result, Electron has been holding workshops for interested parties for many months, Hubbard said.
This month Electron announced nine new consortium members: the consultancy Baringa; hydro giant Statkraft; oil major Shell; network operator Northern Powergrid; utilities EDF Energy and UK Power Networks; and demand response firms Flexitricity, Open Energi and Kiwi Power.
More are due to be announced later this year. “It’s not an exclusive club,” said Hubbard.
As part of efforts to open up development to third parties, Electron this month held a hackathon where energy suppliers, distribution network operators, professionals from the water industry, and third-party intermediaries worked together with the blockchain asset register.
The event drew around 300 applications and 100 attendees, Hubbard said. Teams were able to access the blockchain underpinning the asset registration platform and interact with it via a web-user-friendly representational state transfer application program interface (API).
After attendees identified how to create applications based on the platform, Hubbard said Electron was forced to keep the API open so the users could continue developing projects after the hackathon.
“People were saying it’s not as complex as they had imagined,” she said.
Despite this progress, Electron is not putting a date on when the trading platform might go live. Nevertheless, said Hubbard: “There’s an incentive for everyone to get this up and running in the next few years.”
She also revealed that Electron, which received a cash injection from Japanese energy giant Tokyo Electric Power Company last month, would be seeking further funding later this year.
The company was weighing a traditional fundraising round against a blockchain-sector-friendly initial coin offering, she said.