The buzz around the blockchain technology has been going on in the media already for a while.
But over the past few months, foreign and local newspapers alike have flooded us with some more blockchain-specific headlines, including…
“Wien Energie gets on the blockchain” (Engerati, February 2017)
“BP, Eni Trading & Shipping And Wien Energie Successfully Complete Btl Group’s Interbit Energy Pilot” (BTL, Juni 2017)
“Wien Energie prüft Teilnahme an Blockchain-Projekten” (der Standard, Juni 2017)
“Wien Energie führt ersten Gashandel mit Blockchain durch” (Futurezone, October 2017)
“BP experiments with blockchain for oil and gas trading – working with Eni and Wien Energie to run test trades alongside live systems” (Financial Times, October 2017)
“BP, Wien Energie Complete Blockchain Energy Trading Trial” (Coindesk, June 2017)
And as long as these headlines all sound important and groundbreaking, for those not quite following the technology space, it is sometimes difficult to understand what is it even all about.
So lets start with the basics: what is “blockchain”?
In short, blockchain is a peer-to-peer technology for managing information and recording transactions with NO third party involvement.
This means that the users of this technology can make transactions without the interference of an ‘intermediary institution’ (e.g. bank). The data connected to the transactions and parties is authorized by the technology directly and handled through algorithms. It is supposed to be a safe, fast and efficient – the 3 things our current systems are lacking.
What do Wien Energie and blockchain have in common?
As the benefits of blockchain currently look extremely promising, the technology started to spark the interest of more and more different stakeholders and industries, including those in the energy industry.
Very rightly so, Austrian Wien Energie decided to be the pioneer to test the technology and find the best way to use it and apply it throughout its business.
Since May 2017, Wien Energie has been working with the BP and ENI, on a pilot project where blockchain has been used (on an experimental basis) in the energy trades. The three project partners have been working together with a Canadian startup called BTL, in order to commercialize the system.
Myself on behalf of TEDxVienna Blogger Team had an honor to interview 2 blockchain experts from Wien Energie, Josef Zöchling and Wolfgang Otter, and this way get some first hand insights into the project and this exciting technology everyone is buzzing about.
The full interview is below.
- Since when has the blockchain technology been a topic of interest at Wien Energie? Who started with the whole project in the first place?
Josef Zöchling: Blockchain has been on our minds for quite some time. Various departments have begun to deal with it.
- Did you need to set up a completely new team for this? Or how did you handle this organizationally?
Wolfgang Otter: No, we handled the pilot projects as we would handle any other project; bringing in the relevant people from different departments. We have had positive experience with this approach because it brings several perspectives and expertise into our projects.
- Wien Energie is one of the first energy providers in Europe who started to test the blockchain technology not only for energy trading but also potentially for other uses. What made Wien Energie become the leader in testing blockchain in the energy industry? How do you feel about being a pioneer in this area?
Wolfgang Otter: It is our aspiration as a company to try to incorporate emerging trends as fast as possible and when we were presented with the opportunity to start a blockchain pilot, we grabbed it. As with everything, this of course is also a mixture between being at the right place at the right time and having people on board who are open to innovation and willing to try something new. We are happy with the progress we have made so far. With regards to such a fast-changing area as the “blockchain space” though, we are not planning to sit idle or “resting” on our laurels now.
- How do you see the development of this project within Wien Energie in the coming months? What are the next steps in the blockchain project?
Josef Zöchling: We are currently developing further solutions to streamline our gas-trading processes and bring them onto the blockchain. So far we gained some experience with front ends in the front-office-environment as well as in the backoffice environment (deal matching). In the near future we plan to bring parts of the portfolio-management-processes onto the blockchain.
- What were and are some of the biggest challenges when dealing with the innovative projects such as blockchain?
Wolfgang Otter: The most obvious challenge in that regard would probably be the lack of, or uneven distribution of knowledge regarding the technology. This is definitely something you have to keep a keen eye on when implementing a blockchain-based solution. The people involved do not need to have the knowledge level of a programmer but they do need to understand the advantages and limitations of using a blockchain. By giving them that, you also make them feel much more comfortable when working on such a project.
- How do you see Wien Energie developing with regards to the blockchain technology in the next 5 years?
Josef Zöchling: The topic is on our agenda now and it will definitely stay there. We are witnessing a hype around the topic right now, but we will continue working on blockchain implementations and gradually try to develop market-ready solutions for us. However, the important thing always remains to regard blockchain as an enabling technology, a means to an end, and not forgetting about the actual use cases we want to implement.
- Can we, as end consumers, expect the energy service costs to decrease in the future due to Wien Energie’s use of blockchain?
Josef Zöchling: Within the current model of energy distribution, blockchain could lead to a very minor decrease in prices. However, there is not much leeway as the price that customers pay is to a large percentage determined by taxes and other payments to the state as well as the grid operator. Vice versa, the price of “just” the energy amounts only to around a third of the total price paid.
On the other hand, technology like blockchain could lead to a completely new energy system with new roles and a very different model of production and distribution compared to now, which could also signify a completely different price structure. This is definitely something very exciting to look forward to.
On behalf of the whole TEDxVienna Team, thank you again for this great interview!
Header Photo Credits royalty free