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Direct Energy Launches "Micro Energy Hedging Platform" For Texas C&Is

April 10, 2018

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Direct Energy Business announced that, "An innovative new business-to-business transactive energy network called Exergy, which helps to cut costs and improve efficiency for commercial businesses, is being launched in Texas by LO3 Energy and Direct Energy Business."

"LO3's Exergy platform will make it possible for large commercial and industrial companies to automatically place orders for customized power hedges, as small as the hourly level, and be matched with the best offer in a competitive system," Direct Energy Business said

In light of issues raised by some stakeholders regarding how "peer-to-peer" transactions fit in Texas' retail market (see story here), Direct Energy Business said in a statement to EnergyChoiceMatters.com when asked about the "business-to-business" nature of the program, "This is a prototype for commercial and industrial customers and will not be a trading platform or transact energy. We hope to use this as a way to learn more about how new technology can impact customer behavior. If this program proves to offer benefits for customers and the technology is proved reliable, then we will work with the Texas PUC to ensure it is in compliance with all regulatory requirements."

Direct Energy Business is currently engaging with Texas customers to participate in phase one of the program, which is due to begin later this year.

The Exergy network is based on blockchain technology that facilitates the transaction of energy, developed by LO3 Energy in the creation of the Brooklyn Microgrid (BMG) in New York. Direct Energy Business customers who sign up with the project will use LO3 Energy proprietary smart meters to access the Exergy platform, which uses blockchain technology to create a highly secure data network. The platform allows firms to generate, store and share their energy usage data securely and automatically match their energy procurement to meet their requirements far more cost effectively than currently possible.

Direct Energy Business expects the program to reduce costs and transaction friction, as well as provide more options for customers on hedging.

In Q4 2017, LO3 Energy received an investment from Centrica Innovations, as part of its Series A round. Centrica Innovations is the $140m venture fund of Centrica which invests in new technology and ideas

"Direct Energy Business is focused on helping businesses lower their energy expenses with innovative products and services that allow them to manage price risk or reduce usage altogether," said John Schultz president, Centrica North America and Direct Energy Business. "The Exergy platform will further integrate customers and suppliers and provide additional choice for their energy needs."

"Businesses traditionally manage electricity price risks by signing fixed price contracts with their energy supplier or committing to long-term purchase agreements for solar and wind," explained LO3 Energy CEO Lawrence Orsini. "But energy should be treated like any other asset or cost that needs to be managed and the ability to time market purchases and select from a mix of resources can yield large savings versus 'set it and forget' approaches. The future of energy is changing, and this project will put businesses in Texas on the map as the innovators who led that change."

Exergy is a distributed ledger system that functions across grid-connected hardware, a token system for transactive energy, and a foundation that advances market design and technology in tandem. Through proprietary block chain software, Exergy creates secure pathways for peer-to-peer transactions, predictive analytics, micro-hedging and other possibilities

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