The current energy distribution paradigm is heavily centralized, with energy retailers and wholesalers participating in an oligarchy that negatively affects consumers. With the help of renewables, decentralized energy, digitalization and smart grids, the current energy system is being disrupted and transformed to better meet the needs of consumers.
In Europe today, regulations are being tailored in such a way “that every European will have the ability to be more in control of their energy choice and to better benefit from the single market”. The EU commission aims “to make the whole system less burdensome, more flexible and more responsive to the way consumers produce and consume energy.”
A key objective of the EU commission is to ensure that consumers of electricity are getting a fair deal. This is why “players in the retail market today need to operate closer to the end-consumer.”
The reality of a decentralized world offers new opportunities for Energy Service Companies (ESCOs). Those who seize these new opportunities creating new value proposition for their customers and creating new business models – will become important players in an open energy market.
A solution, SunContract is able to offer its users is: a decentralized marketplace with new energy services for a progressively evolving environment.
Solution: Blockchain-Based Platform
It is only through technological advancement that the vision of a decentralized energy sector can be realized. A fairly-recently developed technology is currently decentralizing 3 very important economic functions – financial transactions, data management and marketplaces. This technology – also known as the blockchain – is disrupting companies that create value through the centralization of the above listed economic functions.
With blockchain technology, new business models based on smart contracts that eliminate the middle man are made possible. These new business models are much more reliable, transparent, have an improved efficiency and they also reduce the operational cost of running businesses.
Blockchain technology enables decentralization, digitization, decarbonization, deregulation and democratization because it supports transparency, trust, traceability, time stamp and transactions.
SunContract is taking advantage of these benefits that come with blockchain technology such as transparency, elimination of the middle man, smart contracts etc.
The SunContract energy marketplace (based on blockchain technology) connects directly consumers of electricity with producers of electricity and then agreements between both parties are executed automatically, without a third-party intermediary. Market tokenization enables deals in seconds, high liquidity, low transaction costs and self-standing in choice.
The User’s Energy Marketplace
This marketplace is for electricity producers and consumers, where they can buy or sell electricity and energy products making them more self-sufficient. It offers to its members the opportunity to individually choose the buyer and seller of electricity. Its users can also define the price at which they purchase/sell their electricity at.
As a producer of electricity, one can create their own group of users that can benefit from the surpluses of electricity that one produces. The SunContract marketplace encourages market friendly prices that enable consumers to spend less on their electricity costs, while at the same time giving producers the opportunity to earn more than they otherwise would had they sold their surplus electricity to an intermediary company.
They say that charity begins at home. With this technology producers can give away the surplus electricity produced in their households to charities, for free.
Companies can also offer electricity-related benefits to their employees. Employers can incentivize their teams by giving them access to company energy surpluses whereby the employer defines the energy price or discount assigned to his/her employees, so that the employees too can enjoy cleaner and cheaper energy at home.
Users of the platform can purchase an array of clean energy products on the platform. These products include but are not limited to: commercial and small scale solar power plants, heat pumps, and more.
Consumers and producers are able to support and promote local production and consumption of electricity by using SunContract’s developments. Consumers are able to reduce their electricity costs while energy producers are also able to increase their profitability. This platform also includes the Distribution Systems Operator (DSO), which experiences optimized local electricity distribution; partners of the SunContract project have access to its customer base where they can sell energy products to spread the use of renewable, eco-friendly sources of energy.
Next up: Globalization
SunContract’s blockchain based platform is currently being implemented in Slovenia with dozens receiving electricity through the platform and more to come.
A quick analysis of the first few months in operation indicates a 35% reduction in the cost of electricity that consumers are buying on the platform compared to before joining the platform. The analysis also shows that while consumers are spending less on electricity, the profitability of producers has also increased making both parties better off. This project is expected to expand into new countries within the European Union and also globally.
Director of Business Development,