The follow up with Markos Romanos, COO, Pylon Network
The Energy bit interviewed Markos Romanos a while back, and it was so interesting we had to go check out how the company was progressing. Pylon has moved on significantly from where they were last February and were well worth our time to follow up with.
What major updates have happened in your software development?
Many of the developments we have achieved remain under the radar since they are directly related to Pylon Network and its blockchain technology and at the same time, are necessary to give us a competitive edge and ensure the commercial/market success of the project.
An example is the ability to access all energy data from the existing infrastructure in Spain (without additional hardware), which on one hand opens up a range of market opportunities for the development of a range of services, and on the other hand, takes away the associated costs (that most consumers are not willing to pay) – and hence, increase the adoption potential of Pylon Network,
Another example is the software for collective self-consumption applications, which is a booming market at the moment, not only in Spain but all around the EU. In that respect, we recently announced the development of the first pilot of its kind in Spain and last week we interviewed the manager of the project, where we asked him about the value that Pylon offers to his project – among others.
The video can be found below (English subtitles are available)
Have you changed your approach to the tokens at all?
No, our approach has not changed. Our approach has always been focused on the aspect of market implementation and uptake – and this is the approach we continue to have.
The fundamentals of the token/coin model remain the same; the objectives in regards to market implementation remains the same. In that sense, the token ($PYLNT) represents ownership of the project (more specifically, ownership of the first federated nodes) and the coin ($PYLNC) represents the utility of the Blockchain-based neutral data hub of Pylon Network.
Has the approach to tokenization changed?
No. As explained, within the architecture of Pylon Network we are still offering a tokenization of the right to utilize the platform and the native coin ($PYLNC), used within Pylon Network. The coin, in turn, still offers the tokenization of the energy data utility that is exchanged in the Neutral Energy Data Hub of Pylon Network.
However, as we are validating the energy market, we continuously look for new potential applications and we are pretty sure that as the market and technology matures, more opportunities will appear. Our focus is to define a concrete model that first can offer value to the energy stakeholders and have a huge business model, and for that, you need to adapt your tech to the market regulations and most importantly understand the market trends; for instance carbon credits, demand response, etc….
Is the token now more widely available?
This is something we are (re)focusing on. Over the few past months, as we establish our presence in the energy sector, demonstrate the capabilities of our tools /services and identify/validate new business use cases, the availability of the token becomes more relevant and such actions are becoming part of our strategic planning.
This moment has now arrived, having the collective self-consumption use case as the starting point. A starting point for offering real value to the energy sector. In that direction, we have decided to enter a few more exchanges, which we know that our community appreciates and trusts. At the same time, we always take care of our community that believes in us and we are taking all the listing processes very seriously. We prefer to take time to analyze the options and only list on legitimate exchanges, rather than list on as many exchanges as possible, in order to protect our community and open up opportunities for the future market uptake.
However, we continue doing that with a lean approach – gradually ramping up these efforts – according to our overall implementation progress and our budget.
Many companies are innovating in this space. Have you come up with any new ways to capture value for the token itself?
Definitely! Through our market validation efforts, we continuously look for new value streams.
One of the most difficult tasks with blockchain is to ensure there is a business case around it; in many cases, blockchain appears to be a solution looking for a problem. This is the reason why we have chosen to take a concrete and simple approach in terms of offering value aligned with the energy and data privacy/security regulations. Blockchain is not a silver bullet and a necessary condition for its successful implementation is to be adaptable and able to interact with other technologies to solve problems in the energy sector, from a wholistic perspective.
At the moment, we have a concrete use case of blockchain on data management for energy transactions – in a more and more digitalized energy system & market. Blockchain can actually improve the interoperability and operational costs of the multiple energy stakeholders that interact in the space of collective self-consumption. Reducing the operational cost and reduce the time response.
Our most recent validation came from the energy communities space – which actually offers one of the best-suited use cases for a blockchain, because of its predominant characteristic of a multi-stakeholder network with the need to exchange data in a transparent and neutral way, while respecting data privacy regulations and ethics.
In addition to market validations, we are also focusing on partnerships as a way to capture additional value. We are moving in that direction, both within the energy sector. Last week we announced a partnership with the software/IoT company Energisme, which will serve in the development of the digital service ecosystem around Pylon Network. At the same time, we are pursuing the same within the crypto sphere and we will soon have news in that regard.
How has the commercialization we spoke about in the last interview gone?
It has been a very exciting period and we have learned a lot, regarding the need to implement the first services using our BC technology and start offering value to the companies in the sector. We have worked together with a number of stakeholders, understood the market better, improved our products and identified new segments (the need to access the data of their consumers in an easy, simple and transparent way, and the most important is that they are willing to pay for that). At the same time, we have realized the importance of educating the companies that interact with the final consumer in scaling up our commercial operations.
However, the energy regulation in Spain (as well as Portugal and France) seems to be taking some bold steps towards modernizing the operation of both the grid and the market. With only recently abandoning the imposition of the so-called “solar tax” (a completely irrational and unfair rule for solar generation at small scale) and the introduction of the collective self-consumption legislation back in April, we are experiencing a booming trend in solar energy installations and the creation of energy community schemes, able to share electricity among their common generation assets and their neighboring consumers. This situation is opening a new window opportunity, solving the issue of a communication framework (protocol) between DSOs and retailers improving, simplifying and securing this process, while minimizing the market frictions between these players.
And the good news is that it’s not only Spain. The introduction of energy communities in the energy markets of EU members comes from a European Directive, which means that all EU members will eventually need to adopt it in their energy regulation. France, Portugal and – soon – Italy have also adopted regulations about energy communities’ participation in the energy market.
Have you managed to realize the goals?
A big and very recent achievement, which we announced at the beginning of the month, was the partnership with the first installation of collective self-consumption in Spain. Collective self-consumption is the first step towards the highly-anticipated and highly-hyped local peer to peer trading. This is something we have been hearing for over two years now by many projects, the only problem being that the regulations were not allowing it.
With the regulation changes in Spain and the EU, finding us at this advantageous position in the self-consumption market, we are putting a lot of attention in this area.
Are partnerships now the way forward for Pylon Networks, or are you seeking more investment to implement your own solutions?
Partnerships are the way forward! As explained earlier, we are moving towards that direction and pursuing partnerships in many areas.
Our focus is to replicate the model in Portugal and France where we have already started building relationships. The coming year will definitely be an exciting year for Pylon; we see a lot of action in terms of the regulations (which in some cases are already in place), while we have the technology ready and able to offer solutions.
In short, the answer is yes – we are focused on partnerships and monetizing the energy community tool (collective self-consumption) next year. We can not announce anything yet, but we hope to be in such a position, soon.
With the EU making large steps in the legal side of cryptocurrency regulation, have you seen improvement of your position or have the changes made it harder for you?
The Libra-effect has initiated a big discussion globally and has put things in motion – and the EU has shown some signals towards the correct direction in regards to cryptocurrency regulations. However, these regulations are mostly affecting the financial applications of blockchain technology. That is to say that even though it is a very interesting period and the news in that space are coming out every day, it does not affect us so much, since we are based in EU and from the beginning we had to adopt all aspects of the project in the existing regulations.
However, this does not mean that regulation is something we do not consider important. We are of course following the regulations very closely and – wherever possible – interact with the regulators to consult and offer them our view on the regulatory developments. This is why we are so focused on regulation in both data privacy and energy data regulation. For example, the (hourly) energy data are considered personal data and GDPR rules are applied.