Shanghai Gas (Group) Co. Ltd., which provides the greater Shanghai Metropolitan area with electricity, and VeChain just revealed their collaborative plan to build a blockchain-enabled energy project.
Shanghai Gas is a wholly-owned subsidiary of Shenergy Group Company Limited and through this mutual project wants to lower costs, improve its business processes, optimize the efficiency of the supply chain, and create an “Energy-as-a-Service” ecosystem, which is trust-free.
As China is one of the key players when it comes to the demand for natural gas all around the world, the country is searching for the best practices to manage its domestic gas market efficiently. As part of this task, the National Development and Reform Commission (NDRC) of China published in 2017 the 13th Five Year Plan on energy development, which aims to help in creating a trusted energy network. Back then the main difficulty was that not much information was shared between the different stakeholders. Blockchain technology rose as the solution to this problem as it is transparent to all the parties involved.
Naturally, as Shanghai Gas is one of the biggest companies in China’s energy industry, collaborating with VeChain and ENN in creating the first blockchain-enabled liquefied natural gas solution was an understandable step. Since this first project was a huge success, it is expected that working on more blockchain-based energy projects would bring even bigger benefits.
The first stage of the project includes gathering all information on the delivery and storage tank of the liquefied gas (LNG), including the data on its quality, which is then uploaded through the VeChain ToolChain, BaaS Data Platform to the VeChainThor blockchain. This approach is a huge step in the right direction as all uploaded information will be available to everybody involved in the supply chain, without any barriers, and this would help in risk management procedures. All participants, both upstream and downstream will be involved in a seamless transparent process.
The huge proportions of the COVID-19 pandemic will surely change many aspects of our business and everyday life. The ongoing digital transformation will surely accelerate and spread to even more industries. Through its work in the first stage, Shanghai Gas had no problem to continue its operations during the lockdown period.
The long-term plan for the partners is the creation of an extensive blockchain-enabled ‘Energy-as-a-Service’ business network. The new ecosystem will include some of the main stakeholders in the energy industry and should encompass energy commerce, logistics control, and innovative products and services.
If the development of the Chinese LNG market continues, its natural prolongation would lead to the countries, part of the “The Belt and Road” alliance. The BP Statistical Review of World Energy 2019, shows that the natural gas reserves from the countries part of “The Belt and Road” initiative represent 79.4% (56.3 trillion) of the global natural gas reserves.
When it comes to consumption, “The Belt and Road” states uses yearly around 1,685 million tones, which is 51% of the global natural gas usage.
Of course, states that are more technically advanced and possess the needed infrastructure will probably lead “The Belt and Road” countries. When we take into consideration that VeChain is the co-founder of the Belt and Road Initiative Blockchain Alliance (BRIBA), we can be sure that their project will play a massive role in the near future.