Interview with SunContract’s CFO Mojca Bajec
We had the opportunity to conduct an electronic interview with Mojca Bajec, CFO of SunContract. It ended up being a fascinating conversation, where she shares the company visions and thoughts about the upcoming world of crypto and energy. Suncontract were very obliging in giving us an interview, so we want to thank them very much for the pleasure – we hope you will enjoy it as much as we did.
On what premise was the company formed?
Today’s electricity system is shockingly inefficient in terms of both resource use and the market economy. SunContract was founded on the premise that the energy market is in much need of change. Of decentralization, transparency and democratization. It turned out that blockchain was the technological tool that would enable us achieve the above goals and it was in this way that we created our P2P energy marketplace for renewable energy.
We commercially deployed our project to the public and it has been successfully operating in Slovenia since April 2018. We recently signed an agreement with Italian company Tecnoapp to bring our platform and its services into Italy. We have also signed an agreement with Philippines government owned CEZA to bring our services to the Cagayan Freeport in the Philippines. Entry into new markets is an ongoing process and we are in talks with various gatekeepers to bring our project into their jurisdictions.
On our platform, blockchain takes over the role of the middle man as a technology infrastructure which can be trusted by default since any and all transactions on the blockchain are peer-to-peer reviewable. They are also immutable which breeds trust among our customers since they know that even we cannot alter the data published on the blockchain.
In a nutshell, SunContract is an energy-trading platform that directly connects electricity producers and consumers into an electricity pool based on smart contracts – platform utilizes blockchain technology to create a new business model for buying and selling electricity.
Where before producers had to sell their surplus to a middleman company at a minimal fee, and then the company sell the same energy at a profit to an end consumer, we are now connecting producers and consumers, allowing producers to become more profitable and consumers to save on electricity costs thanks to our competitive prices on the SunContract platform.
How large is Suncontract at the moment? Where do you hope/see the company in 5 years?
We are at the beginning of our journey, but our goals are ambitious yet feasible – 100,000 average users by 2020 in new markets. In January 2019, many new users will join the platform, especially business users. They had been unable to make the move in 2018 due to yearly contracts with their previous energy supplier which typically come to an end in December.
Who is Suncontract targeting as customers in the first instance? Is it predominantly consumers or businesses also?
At this point in time, majority of our customers are households (residential users). But we will be onboarding many – big, medium sized and small businesses in the new year. Our platform is for everyone.
Want to take advantage of electricity cost savings by using renewable energy, but you don’t have the infrastructure? You can register on the platform as a consumer (residential or business). Have surplus electricity that you would like to sell at a more profitable price? You can sign up on the platform as a producer of renewable energy.
What is the biggest advantage and disadvantage of (peer-to-peer trading) in the energy market using the blockchain?
The SunContract energy marketplace delivers a solutions for the future, without dependence on traditional energy retailers. Electricity traded on the SunContract platform is renewable – also known as good for our environment, and we have an array of energy self-sufficiency products which users on the platform can purchase.
At the center of our business model you can find responsible, energy self-sufficient consumers and producers with sustainable behaviour in compliance with UN SDG goals, who understand the role that they play in the preservation of our environment.
Main advantage with SunContract for the users on the platform is that the producer and consumer directly agree on the price. The result of the agreement is a lower price for the consumer and also a higher price for the producer than if he sold it to a middleman company. This way the consumer incurs electricity cost savings while the producer becomes more profitable and can break even much faster on the costs of his production assets. Beside that, the platform is easy to use, it enables constant overview of electricity consumption (and production) on a smartphone, daily receipt of payments for sold electricity, up-to-date production overview, independent creation of your own customer circle…
How does the Ethereum blockchain scalability issues affect/hinder the business models of Suncontract?
At this time, Ethereum blockchain scalability issues do not affect in any way the realization of SunContract’s business model.
What do you see as your unique selling point/competitive advantage? Who is the biggest competition for you at the moment?
The platform is unique and brings many advantages to its users, from cost savings to flexibility and autonomy. The SunContract team also prides itself in working towards sustainable development goals and energy self-sufficiency – a vision it shares with both the United Nations as well as the European Commission. The SunContract platform “removes” a substantial part of the intermediary costs and is therefore very suitable for more than a billion inhabitants of this planet who cannot afford these costs and are currently without electricity (or without bank accounts which are not needed for using platform). On the other hand, platform also supports ambitious EU energy legislation. Our platform, which has been functioning since April 2018 in Slovenia, can actually help achieve SDG’s set by European legislators which were set few days ago binding 2030 target for renewables – (32%) and an indicative target on energy efficiency (32.5%).
Competition is good for our users and company – it motivates us to grow, develop and remain innovative. At this moment we can say that SunContract platform together with the business model that it supports is a novelty in a global level on the retail market.
What needs to change before the widespread adoption of blockchains and cryptocurrencies into the energy sector happens?
The area of energy is extremely traditional, and changes are slow, slower than in other sectors. But change is on the way. This week Members of the European Parliament have approved new EU laws on renewable energy and energy efficiency which will help consumers to benefit from the energy transition so we can expect the boost that this sector needed. And blockchain technology in our case is actually supporting change that is happening in the market.
In the case of SunContract platform we speak about the revolution of a traditional, centralized sector, so the innovative way of selling and purchasing of electricity among consumers should be presented in a clear and understandable way. Regardless of the complexity of the technology in the background, the platform is simple and friendly to use.
In addition, this technology on which the platform stands is also very transparent and trustworthy. We must demystify the use of blockchain technology in energy sector. Good, transparent and trustworthy cases such as SunContract are the best way to do it.
What approach are you taking with the adoption process? Do you have an edge over your competitors?
Our initial focus with the platform was expansion within the European Union countries for a start. But we have received overwhelming interest from many countries capable of implementing our project in their jurisdiction, and so now adoption is focused on additional markets such as South America, Asia and Africa.
In regard to competition, it is difficult to answer your question seeing as there is no one company that is doing EXACTLY what SunContract is doing, and vice versa. That being said, the energy market is huge, and there is a lot of room for each and every one of us to thrive. At the end of the day, we are happy to see many other companies work towards similar goals as SunContract, albeit differently.
Are you financially viable at the moment – is adoption wide enough that you are profitable?
We are very satisfied with the progress, and we are aware that things change slowly in the energy sector due to some legislation hurdles that we need to overcome. Having 20 years of experience from the traditional energy sector, we understand this a bit more than most people do. We estimate achievement of significant revenue in 2019. And that fits in our projection as well as we are on track with funds.
We have enough funds to operate and do development for the next year, in 2020 we expect on platform/ SunContract energy marketplace between 50.000 and 100.000 average users, what would suffice for financial self-standing and provide funds, needed for further development and expansion.
What has been the biggest challenge of your journey so far?
To overcome legislation barriers to enter new markets – legislation is different between the countries.
In which geographic areas are you currently active? Where seems to be the growth areas for technologies like yours?
Beside Slovenia, we recently entered an agreement with Italian energy company Tecnoapp S.r.. Italy, the fourth largest economy in the European Union, represents immense potential for SunContract business expansion and customer acquisition. So far, the country has already managed to install more than 770,000 solar power plants which indicates clear determination of Italian consumers to shift towards sustainable, renewable sources and self-sufficiency. Europe, with its encouraging legislation is among priorites, but we are also looking for new partners in Asia, South America and Africa.
When do you expect you will have implementation done/be “open to the public”?
The platform is already open to the public since April 2018. End customers can choose the producer and price of electricity.
Is there anything else you would like to add that hasn’t been covered?
The energy sector is undergoing a revolution. As more and more people become more conscious of the consequences their choices have on the environment, we will see more and more people shifting into renewables. For companies to thrive in this changing environment, they will need to adapt in terms of resources, technological use, market development, the list goes on. We invite interested parties to join us in the quest for an efficient, transparent, democratic marketplace that puts its users FIRST. All interested parties can reach out to us at: firstname.lastname@example.org
Thank you very much for your time, we appreciate it.