Why Shell Investing in an Electricity Trading Blockchain is a Big Deal
Shell just announced an investment in LO3’s electricity trading blockchain in the United States. It is hard to understate the significance of this investment from a variety of vantage points.
US Energy Market Ready for Disruption
First Shell has stated it sees electricity as the future of transportation and that it plans on staking claims now. For Shell to use its VC arm and do so with an early stage company is a signal they see the US power market transforming rapidly on a large scale. Moving the needle at Shell’s girth requires significant capital exposure, signaling they see subordinated attributes of the venture as leverage to extent most underestimate.
Blockchain is material to energy at large
Secondarily, focusing on technology sets that do not have broad production adoption induces a second concern from Shell’s point of view, as they are riding the multiple technology adoption curves in both renewable energy and blockchain. Shell having factored both of these points and, most importantly, invested the time of their Venture Capital arm to participate is a sign blockchain will materially impact electricity and renewable electricity at a velocity few expect. Considering the team they invested in are more industry experts than hardcore technologists, signals this is not an IP play, but a capture on a macro trend.
Renewable energy assets are the path to capture restructuring
Additionally, Shell is choosing Renewable Energy as the mechanism to gain exposure to the US electricity market. This should be less surprising considering the scale and velocity of renewable energy adoption, as well as the likely persistent public sentiment for its expansion.
From LO3’s vantage, the readiness of the market for transformation is present and is not contingent on future, radical technology breakthroughs. Merely building adoption and applying blockchain to use cases as they develop is significant enough to begin scaling.
In short, the signal to the world about the state and velocity of blockchain and renewable energy’s impact on the US electricity market at large are more pressing and significant than many think.
