The Energy Disruption Series is a new feature from A greener life, a greener world, in which we will shed a light on many of the disruptive forces underway in the energy and technology industries which are changing the way we use and consume energy.
By Anders Lorenzen
How do you optimise clean energy technologies like solar and at the same time invest in communities, make them more resilient in the wake of natural weather disasters that will become more frequent and violent in a warming world?
The creators behind a Microgrid initiative in Brooklyn, New York City, think they have found the answer. They have built a peer to peer way to trade solar through blockchain technology.
LO3 Energy, a New York startup, in collaboration with Siemens using their Microgrid software is behind the system.
Blockchain is a hot topic in the technology world at the moment and, through decentralized platforms, is also gaining popularity in the world of clean energy.
Brooklyn Energy uses peer to peer blockchain technology where neighbours can trade energy with each other. This enables full transparency, makes sure money stays in the community and in return builds a more resilient community. Instead of receiving a low rate for selling excess energy back to an energy company, residents can receive a premium by trading with their neighbors. The architects behind the system also claim it is more resilient during extreme weather events as users would not lose power. If a hurricane should hit, this isolated network would operate self-sufficiently.
The realisation of the project
In April 2016, the first transactions occurred among neighbors who didn’t have their own solar systems and those who did and produced excess solar electricity. With the help of LO3 Energy, residents of Park Slope and the adjacent neighborhoods of Gowanus and Boerum Hill founded the Brooklyn Microgrid. This pilot project was realised due to three factors. First, through LO3 Energy’s block-chain platform “TransActive Grid,” – a technology that timestamps each transaction as a chain of secure blocks – every energy transaction was documented. Second, Siemens Digital Grid Division offered microgrid-specific technical solutions; and, third, Siemens startup financier, next47, supported potentially disruptive technologies like this through financing, project expertise, and advice.
A game changer
At the Wired Energy conference in London last week, the Founder and CEO of LO3 Energy, Lawrence Orsini, explained why the Brooklyn Microgrid could be a game changer: “It is about changing the way people think and interact about energy” he said, and explained that in Brooklyn they had found that 69% of people want to be part of and participate in the energy marketplace. Mr Orsini went on to explain that in Brooklyn people are interested in locally generated energy from their neighbours, and that this is driving pro-sumerism, earning participants higher returns.
The key beneficial component of the blockchain technology is that it cuts out the middleman. When, in the case of Brooklyn residents here, you trade energy directly with each other, you lock out the big energy companies. This means if you sell your excess solar you earn a higher return and vice versa. You would not be ripped off when buying energy either.
The technology also has several other features. Managing the loads is a key component as well as being able to tell people to turn things off.
Mr Orsini pointed out there is a lot of inefficiency in transporting energy all over the world. In fact, it is estimated that 8-15% of energy is lost when transported to customers on the grid.
He explained that across the world, production of solar PV is driving negative pricing. This is happening due to the rapid decrease in solar costs. “This puts it into consumers` hands, meaning you and I can become producers”, Mr Orsini said.
Mr Orsini was clear that we need a different grid architecture to manage the disruptive force of solar. We need a resilient and reactive grid that can manage some of these patterns and technologies. “It is an issue of operating a grid a different way”, he said.
Mr Orsini believes that Brooklyn is leading the world with their Microgrid. He is convinced we will very soon see similar projects adopted across the world.
The Brooklyn Microgrid exemplifies prosumerism, a mixture of commercial and private production.