A trial of blockchain-based peer-to-peer trading will be undertaken this year in the European wholesale energy market.
Swedish power company Vattenfall on June 7 said that its Business Area Markets unit has joined 22 other European energy trading firms to conduct the trial.
“Blockchain is widely seen as one of the most interesting and disruptive technologies for the coming years, with Bitcoin as the best-known example of a cryptocurrency based on this technology,” Christian Tobias, solution architect at BA Markets, said in a statement. “With blockchain, one party can tradepass a good such as money, securely to another party without a third-party intermediary involved, such as a bank.”
Vattenfall said that participants of the trial intend to attempt live trading later in the year using the blockchain-based system — a first in the world for wholesale energy products.
“On average, we enter into 1,400 deals per day across all energy commodities and markets,” Kilian Leykam, Manager Business Development Trading, Vattenfall, said. “Each deal causes transaction costs and has to be processed in our trading, reporting and controlling systems. Once we are able to apply blockchain technology in energy markets, we will be able to operate more efficiently and at lower transaction costs.”
Vattenfall said that, by lowering transaction costs, blockchain technology will also enable the trading of small-scale decentralized production and consumption — for example private homes with solar panels.