Shell, one of the world's leading oil and gas firm along with Japanese business firm Sumitomo Corporation Group, has invested in a blockchain-based energy startup, as per a report shared by Forbes.

Popular Europe's oil and gas firm has invested an undisclosed number of dollars in LO3 Energy, whose Exergy platform monitors energy with the help of blockchain technology.

In the recent announcement, LO3 Energy stated that it had built a "transactive energy platform" to meet the challenges of tracking energy from different sources around supply networks. 

Kirk Coburn, who is the investment director at shell ventures, said, “As we move into a less carbonized future, Shell aims to invest in innovative companies that will help enable the energy transition. LO3 Energy fits right in that space.”

Earlier, the shell has continuously been exploring blockchain technology and the latest collaboration marks its fourth public investment in blockchain-related firms, Forbes stated, listing platforms such as Vakt, Komgo, and Applied Blockchain. 

Based on the report, Shell has the benefit to transform its investment in LO3's native tokens known as XRG, which will help to encourage the platform and will be needed to access the decentralized energy grid. Firstly, LOC has decided to raise funds via an Initial Coin Offering (ICO) by using XRG, but the firm has ceased the plan until further notice.

The LO3 platform is mainly based on the Ethereum Blockchain; however, it is being made to incorporate with the EOS blockchain, as per Forbes. It is built to track the flow of energy. This enables residents who purchase their power in the locality to be entirely sure that it was indeed produced from a clean source windmill, a solar panel or a gerbil operating on a treadmill.

Based on the Whitepaper, LO3's "Exergy" blockchain is meant to “facilitate the optimal coupling of local electric generation to parties that can value, procure, store and utilize this generation most efficiently. The resulting transactions will clear within a participative market-driven environment operating as close to the grid edge as possible, with an increasing level of automation by using self-executing contracts on a distributed ledger.”

The firm said that its product could power a range of business use cases along with peer-to-peer energy trading, energy covering for businesses, virtual power plants, dynamic electric-vehicle charging, and demand response.

Lawrence Orsini, CEO of blockchain startup said,

“Energy is going through a revolution with renewable distributed energy resources increasingly picking up market share – but to integrate them efficiently we need to re-invent our energy networks.”

LO3 has earlier obtained investments from Braemar Energy Ventures, Centrica, and Siemens.