When the hype around blockchain was growing at the same pace as Bitcoin was, a lot of pilot projects started to pile up on the desks of investors like SET Venture. Everyone was trying to find new applications for blockchain, instead of asking themselves what needs can it actually help to satisfy.
“The most important thing to understand is that blockchain is an infrastructure and it takes time to develop. Where it creates value is where you have multiple industries such as mobility and energy, or energy and industry and supply chains, for example, for tracing or provenance, or energy and financial sector for, for example, for financing of renewables.” says Zdenek from his own experience in the industry.
“Out of billions of dollars invested in these projects only a few of them were able to emerge at scale.” says Julia “Some use cases emerged in particular:
-the ones improving information rather than millions and millions of microtransactions.
-the ones related to traceability and energy provenance
-the ones related to assets registry, giving digital identities to to both production assets and consumption and improving the coordination across different industries, otherwise it can be simply substituted by a centralized database”
Two of the participant panelists are part of two startups that managed to survive the hype wave and keep surfing in the market, let’s see if they embed some of the case studies presented before.
Joan, shares the view of FlexiDAO “We use blockchain for energy traceability. What we did two years ago was to start looking at the customers first instead of other technology. And what we realized is that one of the key problems that we saw in the market was that corporations want to take a more active part into the energy transition and know the impact that their choices have when buying energy. And we saw a big gap in the market there when it comes to tracking the provenance of renewable energy. It's not that all renewable energy is equally green. Then we adapted quickly to a much more simple use case.”
Christofer shares his experience at Share&Charge: ”We work at the intersection of energy and mobility, therefore connecting different industries. We also like started very much with the focus on blockchain, but also of course, the customer in mind and then the the harsh pivot I think in 2018, to start building the open charging network, which is essentially a blockchain based communication layer for the charging industry.The goal was to give the electrical vehicles an identity on the blockchain, but also that the charging infrastructure and enabling both sides talking with each other.”
Julias sees that “ The two startups we just heard are within the ones that have gone through a level of maturity in the sense that it's not technology centric anymore. It's not about having this new technology, it’s about what you can do with it. Specifically, how can you create value for customers in the energy sector and at which price. Blockchain may or may not be an underlying technology.”
“At Vattendal we are seeing that the industry finally understands blockchain technology” says Michiel “Now you don't create a competitive edge with an infrastructure improvement you create a quality lift with the infrastructure for the whole industry. Is essential for companies to collaborate and improve the infrastructure with emerging new technologies that benefit all. Look at small scale certification, for example, but also on the digital infrastructure for smart meter data, stuff like that.”
The Present Crisis
We are living in a time where we do online panels like this just for a reason. So let's address a little bit the elephant in the room. Since COVID is everywhere today. Christopher works in mobility, one of the more affected industries by COVID so far, we are eager to know how Share&Charge is coping with that.
“On one side we see a dramatic decrease of charging sessions, about like 70% and we need to be patient for these numbers to go up again. But on the other hand, we are also in an industry, which has a lot of problems not resolved yet. Despite the challenges of COVID of course, we felt that in general, the industry is under stress, but we are still in the innovation phase of a whole sector. So I'm very very optimistic actually for the electric mobility space to come out strong.”
What about the electricity sector?
“Obviously, people still consume electricity, but when it comes to energy suppliers, they've seen a massive drop in the demands in some countries and prices of the pool have decreased.” says Joan “So let's say that our customers are quite distracted with their core business keeping it alive and innovation gets affected in the short term. That's obviously a deviation. But having said that, I think sustainability will only remain stronger after this crisis.”
These guys are entrepreneurs, optimists by nature, seeing opportunities everywhere, and they should. But guys in the industry might feel a little bit different so let's start asking how the impact of COVID is being felt at Vattenfall and how it resonates and create ripple effects, potentially, that would affect the industry at large.
“There are a couple of things that are really important to take note. We now work and use digital technology that we didn't use before, so you see a different mind shift in using technology. But also if you look at the market prices right now, it materializes the need for a flexibility market because we have like an overshoot of green electricity and we have negative prices in the market right on the spot price market. On the other hand, you see a little bit of risk on the investments and stuff like that. “
How does an investor look at this because for investors, the future needs to be more predictable to make a return. So Julia, what's your take?
“This crisis also highlighted the importance of remote grid management. Finally, DSOs are waking up and seeing that this is necessary. They need to be able to manage the grids from home and also in these times. I think this crisis will really show that hypes will evaporate very soon. So also the blockchain hype as far as it's still there, it will evaporate.”
Let’s see what is the vision of a veteran in the industry like Zdenek.
“Across industries we cn see unexpected new opportunities. For instance, the case of telemedicine, it took 10 years to be taken seriously, by regulators and by the healthcare sector, while it took just a week in some cases to be allowed as a tool for healthcare workers to support the patients. So I would say we might actually see a shift in the mindset of everyone involved, including regulators, policymakers. We will see new needs and new solutions. In particular we are going to see new interest in public infrastructure such as digital identity for people, which is still privacy protecting and we support new services and new opportunities, including in energy and in decarbonisation.”
Michie shares a very important point: “We can now see that there are a lot of applications or apps for mobile phones for the COVID virus and scanning and the use of all the Near Field Communication, Bluetooth applications and privacy-safe solutions. On the other end, we are now dealing with a COVID crisis. When the health crisis is over, we're moving into an economic crisis. And when that is solved, then we still have the climate crisis that we have to solve. “
In line with this, Joan shares some advice for startups: “Well, first of all, as a startup, it's obviously a time of crisis. So, the recommendation I would give to any startup at this time is to focus on generating as much revenue as possible with a solid business case. I think from our perspective when the present crisis is over, sustainability is just gonna become even stronger. And sustainable funds have shown to be much more resilient than the normal ones, large investors like BlackRock are starting to measure more and more the sustainability achievements of large corporates. We think this trend is going to continue and we think there's going to be a good opportunity there. “
It's been a great conversation, a good experience to be together virtually from different places across Europe. Thank you all for contributing. Stay safe, stay healthy, and stay sustainably focused.
Have a look at the full video of the digital panel here.