Energy News

Marubeni partners with LO3 for blockchain energy marketplace

electricity energy

The major Japanese conglomerate Marubeni is partnering with blockchain energy startup LO3 Energy for an energy pilot in Japan. The project will connect Marubeni-owned energy producers including renewables with consumers in Marubeni group offices and factories. LO3’s network involves a virtual marketplace that simulates energy transactions. The experiment is with a view to a commercially operational network in the future.

U.S. startup LO3 Energy is backed by UK energy giant Centrica and New York’s Braemar Energy Ventures. It raised $5.7 million in December 2017.

The company’s first high profile project was a Microgrid initiative in its own backyard, Brooklyn. Although the electricity flows through the grid in the usual way and the system uses conventional electricity meters, there’s an attached computer device. This enables the measurement of power usage and quality. Additionally, it allows communication between other devices connected to the permissioned network, thereby enabling transactions. Consumers can select preferred energy sources through a mobile app.

The Marubeni project expands LO3’s reach, so it now has initiatives in Japan, Australasia, Europe and the USA.

“The Japanese energy sector is in the midst of a drastic transition, and there are increasing numbers of private power producers and suppliers interested in developing new customer offerings particularly in the renewable energy space,” said LO3 CEO Lawrence Orsini.

He continued: “Initially this project is internally focused, but it is very much driven by the desire from Marubeni to explore the opportunities that blockchain management systems can offer in the transaction of energy throughout Japan.”

Yoshiaki Yokota, COO of the Marubeni Power Division commented that the project “will allow us to privately evaluate how this kind of network could work here in Japan and develop case examples that we can use to decide how and when this kind of project could be implemented widely.”

Other LO3 projects

In December 2017, LO3 signed a deal with European Power Exchange (EPEX SPOT) for local electric microgrids. And following its 2017 investment, Centrica announced a Local Energy Market trial in Cornwall England. The project involves 200 homes and businesses to use the Exergy platform.

LO3 Energy created Exergy which it describes as a “global blockchain standard for energy data”. It will use a token (XRG), and the network has secured funding from several of LO3’s backers and partners including EPEX SPOT, Alphablock Investments, Centrica and Braemar Energy Ventures. The company partnered with Bitfury to develop the network. Dr. Bill Tai, a BitFury board member, also sits on the board of another energy startup Power Ledger.

Japanese blockchain electricity projects

Given the changes happening in the Japanese power sector, there are several energy blockchain projects. Late last year a consortium involving Kansai Electric Power, Unisys, University of Tokyo and Mitsubishi UFJ Bank announced a prosumer electricity trading system built on blockchain.

In January Fujitsu said it is using blockchain for a system where consumers control the amount of energy they use in peak periods.

And in the middle of last year, Japan’s TAKE Energy Corporation (TEC) partnered with the Singaporean blockchain start-up Electrify.