The world of oil is not far behind and continues to venture into the terrain of blockchain technology
Shell, the fifth largest oil and gas company in the world, valued at $262 billion, invested in a blockchain-based energy company, according to what Forbes reported on July 10th.
The European-oil-and-gas giant invested an amount not yet disclosed in LO3, a technology and business development consulting firm which is based in New York, and whose Exergy platform is responsible for tracking energy with blockchain technology.
LO3’s objective is to make it easier for individuals to buy and sell locally produced energy using the existing network of power cables.
This investment in LO3 is the Shell’s fourth public investment in blockchain-related firms, according to Forbes, which lists platforms such as Vakt, Komgo and Applied Blockchain as other blockchain portfolio companies.
How Is the Shell Project?
According to the recently published report, Shell has an option to convert its investment in native LO3 tokens called XRG, which will be used to incentivize the platform and will be necessary to access the distributed energy network.
The company originally planned to raise funds through an Initial Coin Offering (ICO) through the use of XRG, but, according to the report, these plans are in storage for the time being.
Exergy from LO3 is currently based on the Ethereum blockchain, but is also being designed to integrate with the EOS blockchain, according to Forbes.
The publication details that Exergy is designed to track the flow of energy as it is added to a shared local energy network. This characteristic gives the neighbors that purchase the energy “absolute certainty it really came from a windmill, a solar panel or a gerbil running on a treadmill”.
Since late 2018, Shell has been a member of Vakt, a blockchain-base-trading platform for energy commodities, along with major oil companies, including BP and Equinor.
The so-called transactive energy market is growing and having presence in more and more companies. This allows users to sell and buy the surplus of energy that they possess, and helps to economize businesses, homes, but also take advantage of the generation of energy.
Recently, the new Australian-based company Power Ledger announced the launch of its peer-to-peer (P2P) power distribution network in Graz, the second largest city in Austria. Similar to LO3, the company intends to optimize energy management and gradually switch to zero-carbon energy.
Shell Oil is continuing its exploration of blockchain with another investment related to Distributed Ledger Technology (DLT). Last March, Shell was looking for blockchain experts in order to generate more oil and gas solutions.
Citizens look for environmentally friendly alternatives to buy a renewable energy certificate (REC), with the aim to contribute with energy production. In this way, they what guarantees about the origin of the energy they buy.
LO3 and its competitors could change the role of traditional electricity to achieve more efficient, distributed local energy grids.
“ We see that its society’s ambition to live in a lower-carbon environment. LO3 is a platform that enables that”, Shell Ventures Investment Director, Kirk Coburn, said.
By María Rodríguez