Electrify Is Using Blockchain to Bring Power to the People
Singaporean producers and consumers alike are seen to benefit from the e-commercialization of electricity
PHOTO CREDIT: Getty Images
Singapore recently joined China and Japan in the liberalization of their energy markets, making the little red dot the first country to do so in Southeast Asia where most cities remain connected to central power grids.
In this liberalized environment where consumers are supposedly given a wider range of electricity retailers from whom they may buy their energy from, most remain connected to centralized electricity systems as access to alternative sources of energy remains few and far between.
Enter Southeast Asia’s first retail electricity market, Electrify.
Founded in response to the liberalization of the energy market in Singapore, Electrify enables the decentralization of power production and brings the power of choice to the consumer. How? By building a better electricity network, starting with an intelligent energy ecosystem.
According to co-founder and CEO Julius Tan, there are currently 27 retailers in the Electrify marketplace. And the year ahead, he reckons, will see more domestic energy producers using their platform. “There may be around 30 to 40 retailers this year, and we, as a central marketplace, will represent these various retailers and the market itself,” he states.
The idea behind the platform is as simple as an entity most Southeast Asians are familiar with: e-commerce. “It’s a basic platform where they choose the energy they want e-commerce style, compare the best plans, and they can sign on the contract in less than 10 minutes,” relates Tan.
Powering the blockchain
With a gross merchandise volume (GMV) of over SGD$5 million as of press time, Electrify has already transacted more than 30 GWh of electricity for both its commercial and industrial customers since March 2017.
The next step? Developing a decentralized energy marketplace that runs on the blockchain. “One of the things we realize is that with electricity contracts, the cost to execute these are quite high in Singapore and most developed countries. We see a huge opportunity to make use of smart contracts on the blockchain, which takes away the middle man fees, reduces transaction costs, and executes these contracts automatically,” explains Tan.
Beyond giving consumers the power of choice, what Electrify is effectively doing is enabling individuals and organizations to be energy producers.
According to Tan, there’s currently a “great mismatch” happening in the market today: There are a lot of companies, landowners, and homeowners that have a lot of rooftop space wherein they can install solar energy systems. However, as their energy needs aren’t that extensive, there’s a lot of excess power they are unable to consume. “The problem with exporting solar down to the grid is that they receive volatile varying light from the consumer electricity market, making it hard for such producers to project revenues. As such, banks and financiers deem these projects unbankable,” shares Tan.
On the other end are multinationals, data centers, and even hotels and restaurants around the city that do not have access to roof spaces but want to buy energy from cleaner sources. “Electrify can bridge the gap between these two entities,” he states.
The scalability conundrum
Another pain point Electrify is currently seeking to address: scalability of its solution.
In this regard, the company recently announced its partnership with Omise Holdings, with OmiseGo founder and CEO Jun Hasegawa now assuming an advisory role at Electrify. This gives the latter access to OmiseGo’s network scalability solution which will be applied to the project to manage transaction settlements.
As the nature of electricity billing cycles is periodic, bill settlements typically occur at the end of each month. And with the Electrify platform expected to generate high volumes of transactions during settlement periods, it is crucial that the underlying interaction mechanism between transaction and blockchain seamlessly accommodates the periodic spikes. The sheer volume of potential energy transactions makes the alliance not only strategic but natural.
“Electrify has tremendous potential to break new ground in energy markets across the region. OmiseGO’s public chain network scalability solution is fully decentralized, making it the perfect platform for fulfilment of high transaction volumes onto the blockchain, without compromising security and integrity of data,” explains Hasegawa.