ELECTRIFY, a Singaporean startup that is using the blockchain to allow people to trade electricity on a peer-to-peer marketplace, announced today the signing of an MOU with TEPCO (Tokyo Electric Power Company), Japans largest utility company.
The deal will involve co-developing a proof-of-concept for Synergy — the name for marketplace — which is based in Singapore. If the partnership goes smoothly, ELECTRIFY will work to integrate the system in Japan’s electricity infrastructure.
Synergy is an ambitious project because if it works, the result would be leveraging the blockchain to radically change how electricity is consumed (and sold) within entire cities.
While not launched yet, Synergy hopes to allow anyone to source electricity directly from suppliers or to buy energy from a private producer (thus, creating an avenue for people to sell their electricity).
For example, if someone use uses solar power to power their startup office, they might generate more electricity than they use. ELECTRIFY wants to be the go-to source for sellers to find buyers via the marketplace. If adopted at a mass scale, it has the potential to significantly reduce waste and financially incentivise people to switch to renewable sources of energy.
In Brooklyn, New York City, a similar project was launched last year called the Brooklyn Microgrid which has allowed neighbours to buy and sell electricity from one another. The issue with this project is it uses a micro-grid system, which is not scaleable beyond the neighbourhood.
“In a Singapore context, if I generated power in Tuas and you lived in a Pasir Ris, there is no physical way to execute [a transaction] via the micro-grid solutions. We are executing a P2P across a city grid and that is a massive game changer,” said Martin Lim, the COO and Co-founder of ELECTRIFY in a conversation with e27.
The reason blockchain is important is because each transaction would be facilitated via the distributed ledger, which provides an avenue to document every transaction with speed in transparency.
It will leverage smart contracts to democratise the agreements long-used by traditional utility companies and make them accessible to the Average Joe.
TEPCO is the primary utilities company for the Japanese regions of Kantō, Yamanashi and parts of Shizuoka Prefecture. This region includes Tokyo, one of the top-10 largest cities in the world.
“This deal represents a huge opportunity [for ELECTRIFY] to enter a huge market. Being able to enter this market will be stressful, tough and expensive, so having a big brother like TEPCO to support us is a massive, massive deal,” said Lim.
ELECTRIFY does not see itself as a competitor to the traditional utilities, but rather a system they can use to improve their customer service.
For example, TEPCO has been hit hard by the fallout of the Fukushima nuclear plant disaster (which it owned), and has seen increased competition in the region. If the ELECTRIFY system takes off, it could provide TEPCO with a differentiating service that helps them rebuild consumer sentiment.
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About five weeks ago, ELECTRIFY announced it had raised US$30 million via a token sale. Part of that money is planned to be used for international expansion and the company did mention the Japanese market at the time. The ICO also helped the company capture the attention of TEPCO.
Furthermore the ELECTRIFY hinted at a “next announcement coming out of Japan in May that will reinforce our commitment to entering the Japanese market.”