SONCE energija, the company behind the SunContract platform, now responsible for marketing the services provided by the platform in its new role as a partner for the Slovenian market, has installed more than 200 solar power plants across Slovenia in the last decade. After the idea of an energy trading platform was unveiled publicly last year, USD 2 million was raised fairly quickly to fund its development, ultimately giving rise to SunContract.
The official launch of the platform was in April 2018. By the time of its go-live, this peer-to-peer energy trading market had already had around 1,000 users, or “pioneers” as the CEO of SunContract, Gregor Novak, calls them. “Right now, the users of the platform could just about fill up a large village, but by the end of the year the number will be comparable to a population of an average Slovenian town,” said Novak to illustrate the company’s results in the interview below. Gregor Novak has recently discussed the EU’s energy policies with the EU Commission Vice President Maroš Šefčovič. In early July, he held a presentation of the SunContract project at the UN High-level Political Forum on Sustainable Development in New York. SunContract, a blockchain-backed P2P (peer-topeer) retail energy trading platform, has announced on its website that it was in talks with several Slovenian businesses who want to become its clients.
How many individuals arealready active on the platform? What are the traded volumes?
Right now, the users of the platform could just about fill up a large village, but by the end of the year the number will be comparable to a population of an average Slovenian town. Our goal is to have enough users for the service to be used to its full advantage. Our next goal is to enter foreign markets. SunContract already has users from other countries, but unfortunately, they are still unable to buy or sell electricity due to highly divergent national regulatory requirements. Needless to say, we are meeting these requirements in Slovenia, and we are now working on doing the same in other countries. While I cannot disclose any names of the companies we are in talks with just yet, I can say that we have signed a number of contracts for 2019, including with business users, after only having household users in our system.
When could your entry to your first new market take place? Will this be Germany or any other market? And what obstacles are you facing when entering New markets, considering that each as its specific requirements?
Both in Slovenia and other countries we have already started working with large energy businesses. Our decisions on which market to enter next are based on the specifics of these countries and our assessment as to where we could satisfy these specific requirements first. First we intend to enter the markets where we can build sound foundations for our operations. At this point, I cannot say which countries it will be, specifically. We can tell you more about this next year.
So, next year you plan to expand beyond the Slovenian borders?
That’s right. In mid-June, the EU Commission, EU Parliament and EU Council reached a political agreement to increase renewable energy use in Europe. They agreed on a share of
energy from renewables of at least 32% of the EU’s gross final consumption in 2030, a
higher target than in the draft rules but short of the level sought by some
governments and the European Parliament (MORE).
What is SunContract's opinion of the agreement?
This is a very positive development. The new directive will substantially facilitate procedures for services like ours. In Spain, a fairly high solar tax is in force for those feeding renewable power into the grid. With new rules, such restrictions will be scrapped. At Europe’s leading exhibition for the solar industry, InterSolar 2018 in Munich, you discussed this topic personally with the EU Commissioner Šefčovič.
What did Mr Šefčovič tell you of the directive, of the ways of its implementation, and about how digitalisation and blockchain could help implement it?
Yes, at InterSolar we talked about the Commission’s newly reached agreement with Commissioner Šefčovič and some other leading energy companies. The Commission is very supportive of our operations, which, in fact, are attempts to make consumers more active through peer-to-peer trading. In the context of digitalisation, blockchain works to the same aim, and the Commission is very supportive of our actions and efforts in this area. Our common goal is to have an energy future where consumers are active and as energy selfsufficient as possible.
What does this mean, specifically? Will future regulation facilitate your entry of markets in other EU member states?
Member states will first have to implement the applicable law. New regulation will indeed bring certain solutions that support our solution, i.e. energy flexibility of each consumer. In
future, flexibility will enable us to upgrade the existing services further still. Speaking of SunContract, we are not only aiming at countries that have already fully implemented the EU energy law.
Your platform is open to more than just solar power, isn’t it?
Yes, our platform is open to all power users and producers. As our model is not based on taking a commission on power sales, our goal is for each consumer and each business to achieve selfsufficiency. Customers agree on the price themselves, and we take no percentage of this. This is the key new aspect of the energy business that SunContract is introducing. In addition, our service contributes to easier operation of distribution networks, which are now facing an increasing number of challenges. What is your business model based on in the long term? Our model is based on the quantity of users or trading volumes: in a similar way as banks we charge transaction fees, which from the user’s point of view make up an almost insignificant cost. Starting today (the interview took place on 6 July), our users can make payments in euros, not just in SNC tokens. We enabled this to make our service even more user-friendly.
How was the reaction to this move from the crypto community?
It was positive. Members of the crypto community are our best ambassadors and are actively contributing to change by making proposals, which we are happy to consider. Throughout the process, this community has given us a lot of knowledge and some very good members of our staff, so we are truly very grateful for all its support. Going back to InterSolar 2018: the event also saw participation from some companies from outside the energy industry like LG or Huawei.
What message do you think this sends to the energy sector?
This was a fantastic event for several reasons. First of all, we could see how strongly IT companies are already present in the energy sector. Huawei, for instance, has become a strong player throughout the entire lifecycle of PV energy generation by developing inverters (SONCE energija has a well-established collaboration with Huawei, Author’s Note), and LG is one of the largest battery makers in the world. So, companies from outside the energy industry are now exhibiting their products and services alongside the world’s biggest energy companies. As for SunContract, as well as the EU Commissioner and heads of development at Siemens and ABB, the exhibition confirmed our assumptions that the future truly does lie in a combination of renewables and digitalisation, i.e. blockchain. One of the exhibitors at InterSolar was Trina Solar from China, one of the largest manufacturers of PV modules, who wanted to simply buy our project. Flattered as we were, SunContract is not for sale (laughing). But what I want to say is that even the biggest players are very well-aware of the value of our project, and this tells us that we are in the right place at the right time.
This is what I wanted to ask you: most start-ups or their founders aim to be bought by some corporation. For SunContract, on the other hand, I assume what matters is that it is owned by a fully independent entity. Am I right?
Yes. We are positioning SunContract as a global platform, and we do seek partnerships and collaborations, but as I said we are not for sale. We see ourselves as some sort of a “global Uber”, with several million users and a bright future ahead of us.
All businesses operate for profit. When do you expect SunContract to turn a profit?
In about two years. At this point, we are not worried about the financial aspect, because we have raised enough to develop and expand.
Do you plan to raise money for any of your next stages of growth and development through an ICO as you did initially?
No, this is not part of our plan. We have raised the required funds for development, and the number of tokens sold was finite. On the other hand, we are continually growing our team: we now have a staff of 25; since last August the number has tripled. We are still hiring programmers, engineers, analysts and all other imaginable profiles of the so-called new future (laughing).
How open for collaboration are your potential partners such as Slovenian energy companies?
We were actually quite surprised by how open Slovenian energy companies are, in particular those working in e-mobility. We have therefore started developing an additional service, which we plan to launch together with our partners in near future. It is very important to us to be accepted so warmly and to be able to focus on developing very concrete solutions, which we can later launch in foreign markets – that is, in versions tailored specifically to these markets.
Where do you see the role of Slovenia as one of the smallest EU member states in shaping the EU energy strategy and energy policies?
Our experience with the Slovenian government is a very positive one; all officials we have been in contact with about our activities have been very appreciative and supportive, facilitating our access to foreign markets. In our experience, they are doing very well also in terms of communicating new blockchain-backed technologies. We could see that Slovenia as a member state has a very strong position within the EU, just think of its active role in establishing the European Blockchain Hub, which comprises enterprises based in Slovenia and foreign markets; projects; associations, etc. Members include BTC, SunContract, ConsenSys, as well as the states of Slovenia and Malta.
Author: Alenka ŽumbarSource: Energetika.net