UK utility Centrica will pilot blockchain technology in its £19m Local Energy Market trial in Cornwall.
The utility is partnering with LO3 Energy to investigate how blockchain technology could revolutionise the way consumers buy and sell energy.
Under the pilot, set to register 200 participants, the two parties will also test how blockchain can help business and residential consumers to improve energy efficiency.
The main aim is to develop a business model comprising secure technology platforms and distributed energy resources, which consumers can use to sell and buy energy amongst themselves and the utility to ensure the reliability of grid network.
Another aim is to keep energy bills low and affordable in addition to reducing carbon footprints and lowering utility's operational expenses by avoiding investing in new generation infrastructure to meet demand.
LO3 Energy will provide its Exergy platform that the solution provider claims will secure energy trading amongst participants. Data on energy traded to be permanent and unalterable.
Centrica and LO3 Energy have also partnered in a pilot to deliver world’s first micro-hedging market for industrial and commercial customers in Texas in the US.
The pilot is being implemented by Centrica's subsidiary Direct Energy Business to cut costs and improve efficiency for commercial businesses through an innovative new business-to-business energy network.
Direct Energy Business is using LO3 Energy's platform to enable businesses to place orders for customised power hedges.
The technology enables businesses to assess offers with the cheapest energy prices on the wholesale market.
Mark Hanafin, chief executive of Centrica Business said: “The proliferation of digital technologies is having a significant impact on the energy industry, allowing us to find new and better ways of delivering energy and services to our customers.
“This is an exciting opportunity for us to test blockchain technology beyond the theoretical and put it into practice, developing innovative new solutions that will empower consumers in the UK, North America and beyond to take control of how they engage with energy.”
Lawrence Orsini, CEO of LO3 Energy, said: “Exergy is designed to empower new prosumers while enabling traditional industry players to shift business models and find their place in the energy market of the future. Our partnership with Centrica and Direct Energy will trigger adoption for Exergy at a scale that will bring trustworthy disruption to the industry.”
The developments follow Centrica investing in LO3 Energy in 2017 as part of a £100m programme to identify, incubate and accelerate new technologies.