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Major energy players throw their weight behind blockchain platform

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Blockchain has received the backing of a powerful coalition of energy companies and trading houses who have announced plans to create and invest in a new venture develop a blockchain-based digital platform for energy commodities trading.

The consortium is made up of companies from BP, Shell and Statoil; trading houses Gunvor, Koch Supply & Trading, and Mercuria; and banks ABN Amro, ING and Societe Generale.

The collaboration will see the companies pool their experience to create a secure, real-time blockchain-based digital platform to manage physical energy transactions from trade entry to final settlement.

The intention of the venture is to take advantage of the digital capabilities offered by digital ledger system, moving away from traditional paper contracts and operations documentation to secure, smart contracts and authenticated transfers of electronic documents.

Expected to be operational by the end of 2018, the platform aims to reduce administrative operational risks and costs of physical energy trading. If successful, it will also improve the reliability and efficiency of back-end trading operations for all supply chain users, while also opening the door to innovative funding and financing solutions.

Over time, the consortium hopes to lead the migration of all forms of energy transaction data to the blockchain, which it says will improve data quality, strengthen security and increase the speed of settlements industry-wide while reducing the cost for industry participants.

A number of utilities have already taken up blockchain as part of their efforts to embrace emerging technologies in the energy sector. E.On recently completed what is said to be the first successful power trade with Enel using the technology, while Centrica is set to invest in New York-based start-up LO3 Energy, which specialises in blockchain solutions for the energy market.

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