LCG Energy on the biggest problems in the energy industry and how humanity can overcome them: an interview with the CEO
LCG Energy is a licensed utility provider, energy contractor and energy trader that wants to design innovative blockchain solutions for the energy sector and conduct an ICO. The company was founded in 2009 and had a revenue of €40M last year, with a projected revenue of €200M in 2020 and plans to acquire renewable energy projects with ~20% ROI.
Q: Could you please tell us more about your company and how the idea for the LCG Energy project originated?
M: LCG Energy was founded in 2009. 10 years later we are one of the few independent utility providers on the German and Austrian markets that are regulated and have an active customer base of over 50.000 households and businesses. We have 5 subsidiaries across Europe and are planning to expand our reach globally in the following 2 to 5 years. Last year, our revenue surpassed €40 million, and as we are on our way of acquiring green energy projects worth €80 million, we are planning to reach €200 in 2020. LCG Energy has been engaged in energy contracting and trading and has been working on the implementation of various renewable energy projects over the last few years, all of which are enlisted in land registers. Over the years, we have managed to reach an approximate savings of up to 20% for our customers in the markets with the highest electricity prices in the world – over 30 cents for a kW/h.
The idea for the LCG Energy project was first born in 2016, shortly after we discovered that blockchain technology could potentially offer some very interesting use cases for us as an energy supplier and trader. The technology had already made a considerable impact on the financial industry and has proven itself as disruptive and game changing with the increased level of security and the ability to decentralize it offers to virtually any industry where there are digital transactions of data. Later in 2016, a joint research project between PwC and Researchgate was published, which talked about how blockchain can be applied to our existing energy infrastructure and the potential benefits it could have for companies across the supply chain. However, no one had tried implementing it in the energy sector from the perspective of the traditional utility company yet – the first projects that used blockchain for energy were P2P energy marketplaces that emerged in the beginning of 2017. These marketplaces remove intermediaries and offer secure and transparent P2P trading of energy for reduced transaction fees in the long term, with gas fees being reduced as blockchain technology is further improved.
Q: What are in your mind the biggest issues the energy sector faces on a global scale?
M: The energy industry is currently being under massive regulatory pressure to reduce its negative environmental footprint and transition away from fossil fuels to more sustainable energy sources. This requires substantial investments in research and development of new technologies, as well as restructuring of the current systems. This translates into considerably higher costs for the production and supply of energy, putting pressure on energy companies and the end consumers and raising the price of energy while the demand for it is rapidly increasing.
Another issue that the sector has to deal with and particularly utility companies is the vulnerability of digital systems which are being used by the vast majority of energy enterprises. Cyberattacks pose a serious threat due to the large scope of stakeholders that can be affected by them and can result in substantial losses for whole economies.
Q: Blockchain has found a wide array of use cases across many industries, including energy. How could a utility company use blockchain to create value? What problems can the technology solve potentially?
M: With blockchain technology on the verge of becoming the innovation of the decade and the joint research on its use cases for energy clearly stating some interesting points, we started our own internal research with the purpose to find out how we can make use of blockchain in our daily operations and improve our existing business model even further. Over the last 2 years, we invested considerable resources in our internal research and the planning of several blockchain solutions that work in conjunction with our current business model. We found out that blockchain can improve the overall security and efficiency of data management and offer a completely new and transparent way of communication between utility companies and their customers, which can potentially result in multiple benefits for both sides. This solves both the pressing issue of cybersecurity threats due to the high degree of digitization in the energy sector and the vulnerability of utility companies to hacker attacks, as well as the lack of trust of consumers in their energy suppliers due to the intransparent prices.
We have been working on a revolutionary blockchain integration to digital Smart Meters which have become a standard in energy reporting over the last decade. Most european countries have already replaced the old electricity meters that need to be read manually and cannot operate digitally. There have been multiple studies suggesting that by using blockchain technology, the scope of functionalities of Smart Meters can be greatly expanded and a completely new level of security can be achieved. What is more, blockchain-based Smart Meters work perfectly in conjunction with Artificial Intelligence and Automated Machine Learning algorithms, which enables advanced automation mechanisms and opens a whole new world for energy reporting, analysis and optimization.
Furthermore, we are planning to create a blockchain-based digital platform that will offer a wide array of energy related services and investment opportunities to people that are currently beyond the reach of the traditional services we are currently offering across Europe. The transactions on the platform will be carried out with the LCG token, a utility token based on the ERC20 standard.
Q: Where do you expect the LCG Energy project to be in a few years in terms of progress and success?
M: We have ambitious plans to become the first utility company in the world that will implement blockchain in its business model. We believe in the vital role blockchain will play in the sector and that is is only a matter of time before we will witness its widespread adoption by utility companies. As a pioneer, LCG Energy will try to set the example for others to follow and will ultimately drive the adoption of blockchain in the energy sector further.
To learn more about LCG Energy, their blockchain initiative and upcoming ICO, visit https://lcg-energy.com/.
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