LO3 Energy is integrating a blockchain-based energy trading platform with a community microgrid project in New York City. LO3 Energy is a technology consulting firm focused on decentralized business models emerging in the energy, clean tech and currency industries. The company is part of Siemens’ start-up incubator unit, called Next47, that helps start-ups in the “evolving decentralized energy system market.”
LO3 Energy has planned a pilot project showcasing its solution in Brooklyn, as part of the state of New York’s “Reforming the Energy Vision” strategy. The Brooklyn community microgrid project will be the first of its kind in the world, according to LO3, and will offer a starting point for developing other microgrid projects in US.
“We are envisioning tremendous opportunities for the application of the blockchain technology, especially in microgrids with distributed and decentralized energy systems,” said Thomas Zimmerman, CEO of Siemens’ Digital Grid Business Unit. “Its big benefit is that it permits transparent, efficient trading between multiple participating systems and various stakeholders while taking grid-specific requirements into account.”
LO3 Energy’s TransActive Grid is a peer-to-peer energy trading platform for distributed energy resources. Siemens has paired the Transactive Grid with its own microgrid control solutions to enable blockchain-based local energy trading between consumers within a handful of neighborhoods in Brooklyn, including Boerum Hill, Park Slope, and Gowanus. The solution will help balance power generation and consumption across houses within the area.
A microgrid is a small scale power grid that utilizes distributed energy resources and can operate independently of the larger municipal or state-wide power grid. Microgrids can help create a more efficient power system by integrating renewable energy sources such as rooftop solar or wind into a neighborhood or city system, and they are gaining steam in the US, as various municipalities and state governments push policies aimed at decentralizing the power grid in the US. Microgrid markets will grow 116% over the next four years, according to forecasts from GTM Research.
And by introducing blockchain technology into these microgrid installations, consumers who are using renewable energy to produce their own energy — now referred to as “prosumers” — can now sell power to their neighbors through a digital trading system.
Blockchain technology gained attention a few years ago as the enabling technology behind the crypto-currency Bitcoin. In the energy sector, Blockchain solutions enable prosumers to interact and trade energy through protected data transactions. Blockchain proponents claim the technology is relatively well fortified against cyber security attacks. “Transactions are trackable and tamper-proof on distributed systems without the need for centralized monitoring,” the companies said. “Thanks to a cryptographic process and distributed storage, the possibility of manipulation is virtually eliminated. In addition, authentication processes guarantee the confidentiality of user data.”
The combined platform will help increase efficiencies of overall power systems by managing generated and stored energy and handling consumers’ flexibility options. Siemens’ collaboration with LO3 will help it continue to develop local energy trading practices and systems in microgrid applications.
“The constant evolution at the grid edge requires advanced control, automation and data analytics technologies enabling secure, stable and reliable integration of decentralized energy systems as well as supporting the establishment of new business models,” said Ralf Christian, CEO of Siemens’ Energy Management Division. “We’re convinced that our microgrid control and automation solutions, in combination with the blockchain technology of our partner LO3 Energy, will provide additional value for our customers whether on the utilities side or on the prosumer side.”