Utility giants join blockchain energy trading trial

FRANKFURT: Some of Europe’s biggest utilities joined a project to test blockchain-based trades in wholesale power and natural gas markets.

Utilities from Enel SpA to RWE AG will start live trading based on blockchain in the fourth quarter, after tests that start in August, said Michael Merz, managing director at Ponton GmbH, the developer of the project. The software, called Enerchain, allows anonymous peer-to-peer trading without using a third party.

Blockchain, the technology at the heart of bitcoin, may help the energy business to adapt to a more decentralised world with intermittent solar and wind power output. The technology is being tested by utilities from Vattenfall AB to grid companies such as Tennet Holding BV in areas from consumer electricity platforms to managing the network. “Some utilities are taking part because they just want to test how blockchain works, others really want to find out whether it will pay off to use it in trading,” Merz said by phone from Hamburg.

Enerchain allows traders to anonymously send orders to a decentralised order book that can be accessed by other traders, according to a statement yesterday. This may lower transaction costs by erasing the need for exchanges or brokers. – Bloomberg