LO3 Energy, a young New York company, is working with Siemens Digital Grid and Siemens’ startup financier next47, called the Brooklyn Microgrid project. There, neighbors are empowered to produce, consumer and purchase power within their community with a blockchain enabled transactive energy platform. LO3 is a pioneer in the movement toward a distributed energy supply system that draws on renewably-generated sources for a more resilient, customer-driven economy.
by Hubertus Breuer
On sunny days, Martha Cameron’s electric meter runs backwards. There’s a simple reason for that. On the roof of her brownstone, a row house that was built about 1900 in the idyllic Park Slope neighborhood in Brooklyn, she has a solar installation. When the sun is shining brightly, she can’t use all the electricity from her 18 photovoltaic panels, so the excess power is transferred to the power grid. When Cameron installed her solar system in 2010, she was a pioneer. But she was soon joined by five other buildings with solar systems on her leafy street, which is lined with Norway maples and sycamores.
In April 2016, the first transactions occurred among neighbors who didn’t have their own solar systems and those who 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 project was possible because it fulfilled three criteria. First of all, thanks to LO3 Energy’s blockchain platform – a technology that timestamps each transaction as a chain of secure blocks – every energy transaction was documented. Second, thanks to the Siemens Digital Grid Division, microgrid-specific technical solutions were offered; and third, Siemens startup financier next47 supported potentially disruptive technologies like this through financing, project expertise, and advice.
Microgrids play an important role in environments as different from one another as the Alaskan wilderness and NYC neighborhoods.
But the Brooklyn Microgrid aims to do more than merely enabling small-scale trading of environmentally-friendly electricity. In view of the devastation caused by Hurricane Sandy in 2012, the project plans to install battery storage units within the grid in order to keep the lights on at least temporarily during the next storm-related emergency. If possible, local electricity demand will eventually be adapted to solar energy generation. For example, electric cars could be recharged when the sun is shining and the battery storage units need no additional boost.
Self-sufficient microgrids play an important role in environments as different from one another as the Alaskan wilderness and New York City neighborhoods. In an energy market that is growing through distributed energy systems – whether they are based on wind, sun, water or biomass – such grids are becoming increasingly significant. LO3 Energy is benefiting from Siemens’ development of microgrids such as the one that has been operating in Wildpoldsried, a village in southern Bavaria, since 2014. These microgrids include network control systems, switchgear, innovative battery solutions, and smart electric meters.
Collaboration with Brooklyn Microgrid is bringing benefits to the Siemens Energy Management Division because LO3’s transactive energy platform is based on a decentralized, Web-based bookkeeping system that uses cryptographic technology to save data in a way that is inexpensive and forgery-proof. For example, it can ensure that users receive original replacement parts, because it can seamlessly retrace a part’s journey back to its origins with the help of an RFID chip and the blockchain – one of many potentially interesting applications for Siemens.
A microgrid is a nucleus that sets the stage for an energy future consisting of networks of energy cells. Blockchain supports this process.
Such peer-to-peer business deals – conducted directly from computer to computer – are very cost efficient and have great potential. The total value of the assets now being administered via blockchain all over the world is $1.6 billion, and according to Coinmarketcap, a cryptocurrency platform, these assets grew by an impressive 1,600 percent between 2013 and 2016. Seamus Cushley, a blockchain expert at PricewaterhouseCoopers in Belfast, says that $1.4 billion was invested in blockchain-related startups in the first nine months of 2016 alone.
In order to be successful, blockchain platforms and microgrids require a regulatory framework. In New York State, such a framework is provided by “Reforming the Energy Vision” (REV). The platform’s objectives are to minimize the vulnerability of the power supply system that became visible during Hurricane Sandy, to use more sources of renewable energy, and to reduce costs. The Brooklyn Microgrid is a good test case for these objectives. “A microgrid is a nucleus that sets the stage for an energy future consisting of networks of energy cells,” says Stefan Jessenberger from Siemens’ Energy Management Division. “Blockchain also supports this process, because it makes it much easier to conduct energy trading within cells.”
Siemens Digital Grid, next47, and LO3 Energy all believe in the potential of blockchain-based microgrids, because this technology can be used wherever there are decentralized energy sources. “Our experiences with the Brooklyn Microgrid will certainly flow into future projects,” says Kessler. Meanwhile, Martha Cameron is already very proud of what has been achieved. “We are electricity suppliers,” she says.
Picture credits: all images LO3 Energy
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