- Shell has invested an undisclosed amount in the New York-based start-up LO3
- LO3 plans on making it easier for individuals to buy and sell locally produced energy
- The platform will be based on the Ethereum blockchain initially and could move to the EOS blockchain in the future
- The project will be incentivized by their native token XRG
Shell, the European oil, and gas giant and the world’s fifth largest gas firm has been exploring the potential of blockchain technology for a long time now. From backing a blockchain-based energy commodity trading platform in 2017 to owning a minority stake in a start-up dubbed Applied Blockchain, it has played a great part in bringing what’s possibly the hottest tech segment in recent times into the oil and gas industry. Quite recently, the company has taken another step further into the world of blockchain technology and has invested in a blockchain-based energy startup, Forbes reports, July 10, 2019.
Investing in Innovative Start-Ups
The European giant has supposedly invested an undisclosed amount in New York-based start-up LO3, which uses a modified version of the Ethereum blockchain to make purchasing and selling of locally produced energy easier for everyone by utilizing the already existent network power cables. LO3’s platform, named Exergy is designed to track the flow of energy. Using it, one can be certain about where the power is actually coming from. This is Shell’s fourth public investment in blockchain-based projects. The others are oil-trading platform Vakt, Applied Blockchain, and commodities platform Komogo, which is also based on the Ethereum blockchain.
Kirk Coburn, Investment Director of Shell Ventures commented on the matter:
“As we move into a less carbonized future, Shell aims to invest in innovative companies that will help enable the energy transition. LO3 Energy fits right in that space.”
As per the reports, Shell has the ability to convert its investment into LO3’s native tokens called XRG. These tokens will be used to incentivize the platform and will be used by anyone who wishes to access the distributed energy grid. Originally, the company had plans to raise funds through an initial coin offering (ICO) of the XRG tokens, but those were put on hold. Based on the Ethereum blockchain, the token could also see a migration towards the EOS blockchain in the future as it has been designed in such a way.
“We are building a custom blockchain combining the best of what existing blockchain communities have already accomplished,” says LO3 director Ben Conte.
Blockchain is Making Its Way Into the Energy Sector
Prior to this, Japanese Sumitomo Corporation Group had also invested in LO3 Energy as they had been motivated by the nuclear disaster in Fukushima back in 2011, and have been mulling plans to move away from nuclear power. Also recently, Power Ledger, an Australia-based start-up, announced the launch of its peer-to-peer energy distribution network in Graz, the second largest city in Austria, and just like LO3, they plan on optimizing energy management and gradually move to zero-carbon energy.