Enerchain, a peer-to-peer trading initiative is set to go live by the second or third quarter of 2018. Initially, it will be starting with a small number of electricity and gas contracts. The initiative is being taken to test the utilities’ – “ability to protect their margins by dominating novel automated trading architectures.”
Currently, Italy’s Enel, Germany’s E.ON and Sweden’s Vattenfall are the only companies involved in this initiative. In the words of Michael Merz, the managing director of Ponton, and the developer of Enerchain, “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.” He further added, “We have developed an order execution process that works just like a typical OTC (over-the-counter) market front end.”
Enerchain is a software that allows traders to trade anonymously on a decentralized peer-to-peer network without any third party intervention. Using blockchains, the necessity for handling multiple databases vanishes and a network of participants gets to maintain only a single record which is both easily accessible and most importantly, unchangeable.
Since the need of an intermediary or a broker is no more, using Enerchain will help in lowering the utilities’ transaction costs. If successful, it can also make exchanges such as ICE and EEX rather useless.
The motive behind the German IT company for creating Enerchain is not to monopolize it, but to use it alongside other similar products to speed up the country’s green power supply.
However, it should be noted that the Energy supply sector is a fiercely competitive one, and most of the other companies are reluctant to share their data so openly. This attitude will definitely have a slowing impacting on the progress for Enerchain and the development of the peer-to-peer platform.