Disrupting the incumbent energy oligopolies and enabling community power

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.”
— Buckminster Fuller

Background

Modern energy markets are pretty volatile places. The big incumbent energy retailers have the resources and the investment power to protect themselves from the variability of energy generation costs, allowing them to continue dominating the market and inhibiting new competitors.

Many companies and community-based organisations — let’s call them ‘Neo-retailers’, want to offer an alternative. Not only in buying electricity, but also to offer communities more control over their energy; allowing people to set prices between themselves, gift electricity and even trade rooftop generation within their community. This innovation in the bundling and creation of products will revolutionise the electricity industry.

To unlock the potential in neo-retailers, Enosi proposes the use of a retail trading platform made available to communities and organisations through a simple low cost SaaS model and enabled by powerful block-chain technologies.

Enosi’s trading protocols are designed to challenge the big incumbent energy companies by reducing the transactional and compliance costs for new and smaller retailers and allowing neo-retailers to combine their customer bases, solving some of the problems of the need for scale.

By introducing blockchain technologies, Enosi’s technology will enable neo-retailers to innovate on top of that software, sparking new competition in a world moving towards distributed energy.

Enosi Values

Enosi is an Australia start-up with a vision of affordable and clean electricity for all:

1. Access: Clean, low cost electricity is a basic human need
2. Innovation: Everyone should be able and encouraged to shape the future
3. Economics: A belief that traditional energy monopolies lead to suboptimal economic outcomes and need to be disrupted
4. Environment: We must leave the planet in a better condition than we found it
5. Decentralisation: Communities should be in charge of their electricity
6. Commoditisation: All parts of the energy value chain must be commoditised to achieve the optimum outcome

Why blockchain?

Blockchain is an excellent technology to de-centralise and secure our power distribution system. Instead of relying on centralised providers of energy and various middlemen, the blockchain can ensure that prosumers and consumers can trade electricity with one another with each transaction and/or trade instruction recorded on the blockchain. Each transaction is transparent and auditable, secured by the blockchain’s consensus mechanism ensuring that fraud cannot occur and automating the trading of electricity. Put simply, blockchain technology ensures that the same kWh cannot be sold to two different buyers (just as Bitcoins cannot be sold or spent twice).

What are the Enosi Protocols?

The protocols consist of a set of smart contracts (Enosi Smart Contracts) deployable by any energy community and can even be enabled as and electricity Decentralised Autonomous Organisation (eDAO). An eDAO will abide by a set of specific programmatic rules that are executed by decentralised consensus. Enosi believes that using eDAO contracts to govern and manage the relationships between retail energy license holder(s), neo-retailer(s) and members will become the most cost efficient way to meet local regulatory requirements while delivering energy services to neo-retailers and their energy community members.

The Enosi software will perform much of the transactional activity typically performed by the traditional energy retailers. Those functions include receiving metering data, billing, and buying and selling of distributed energy and financial settlements, all at a fraction of the current cost. The Enosi Smart Contracts will interface with the existing regulated grid and market participants such as the metering data providers, grid owners, and market operators to allow widespread global adoption at the onset.

Complex multiple party transactions such as peer to peer trading, proof of energy provenance, and community energy programs will also be possible through the contracts. An extended set of Enosi applications will be made available to neo-retailers and partners to assist in customer engagement functions and wholesale market interaction.

Scalable innovation from the outset

Adopting the Enosi Platform will enable innovative energy providers to provide lower cost community-based energy schemes — without having to change the current rules or do a one-off deal with the incumbents. Using the Enosi Platform households with solar can become prosumers and sell the energy from their home power station (solar) to buyers of their choice at fair prices. They will be able to participate in peer-to-peer trading, community-owned generation, and take advantage of offers from innovative new energy retailers that benefit from the lower cost structure of the Enosi Platform.

Consumers will even be able to access energy directly fro participating solar and wind farms, both lowering their costs and increasing the returns onlarge scale renewable energy investments.

In this new decentralised world, costs across the electricity value chain can be dramatically reduced. This is achieved by more efficient use of infrastructure, increasing the level of competition with existing incumbents, and improving the economic signals to market participants.

What makes Enosi unique?

There are several organisations and projects that are seeking to create blockchain technology for the energy sector. We’ve observed that other projects are either

• focusing on narrow problems within the energy industry such as micro-grids,
• providing tools to empower the incumbents,
• reliant on the cooperation of the large incumbents and/or
• seeking to expand far beyond distributed energy enablement.

To date, innovation in the electricity market is stymied by both the inertia of the incumbent players, and powerful establishment protecting their market share and their legacy investments in fossil fue generation. Most energy blockchain platforms witnessed to date pay homage to this power, by trying to align themselves with the establishment, or alternatively concentrating on small micro-grid-based projects. Their aim is to develop closed blockchain ecosystems and get current energy players to use their platforms. We believe the world needs a low cost Software-as-a-Service platform, designed by global energy market experts, yet one that can be tailored by local energy experts to meet the requirements of the thousands of individual energy markets globally.

Enosi is specifically focused on creating the protocols required to enable core energy transactions, that will meet most types of regulatory requirements and have the broadest global application.

The Enosi Platform differs from other electricity blockchain platforms because it will be a completely open platform that can be deployed without an incumbent grid partner. It encourages development of a multitude of solutions tailored to each specific market need, fostering innovation, competition, and customised solutions, making it possible to rapidly accelerate real-use deployment globally.

Enosi believes that the market will become further decentralised over time, as policy makers see the benefits of lower-cost, more secure energy generation. The Platform will be able to support applications for community energy programs, direct consumer access to large scale renewable generators, billing reconciliation and settlement, wholesale market trading, electricity billing, fast switching between retailers, and shared hedging in the wholesale markets.

I’ll write more on another occasion about the differences between Enosi and other projects in this space.

Proven team and Partner network

The team behind Enosi has over 200 years of collective experience in leading transformative businesses in the blockchain, energy, technology and finance markets. We have an extensive ecosystem of partners and already developed the first demonstration of smart contracts performing the transactional activity. Solar Analytics, our first neo-retailer, is currently leveraging their 25,000 customer households and world-leading solar home energy management service to launch a peer-to-peer shared solar trading application to be deployed through their network of 350+ solar partners.

Conclusion

The energy market is ripe for disruption. The Enosi ecosystem will facilitate new and innovative models of community-oriented energy supply and management by providing the means to share energy-related data and logic. In most jurisdictions, this also democratises access to energy retail licensing by enabling businesses specialising in wholesale risk management, without the need to manage consumers.

Currently, community-based organisations cannot become energy retailers without first obtaining an energy retail license. This is a prohibitively costly and cumbersome process. With the successful implementation of the Enosi ecosystem and the market efficiencies that are unlocked, this idea of a truly community-based energy retailer becomes possible.

More detailed information about Enosi is available in our White Paper, and from our website at www.enosi.io.