LO3 Energy builds microgrid to trade locally-produced energy
Brooklyn-based LO3 Energy has developed a microgrid allowing residents to buy and sell local solar energy, using blockchain technology to track the energy produced and consumed and to record the transactions. LO3 Energy set up the peer-to-peer service in 2016 and in November, founder Lawrence Orsini signed a partnership deal with German conglomerate Siemens. The company is also in talks about expanding across the US as well as into Europe and Australia. In a survey by Accenture, almost 70% of consumers said that they were interested in an energy-trading marketplace, while 47% said they planned to sign up for community solar projects.
Distributing energy this way is more efficient than transmitting energy over distances, said LO3’s founder, Lawrence Orsini, and would make neighborhoods more resilient to power outages, as well as helping meet demand when energy needs exceed expectations. It’s also in line with growing public support for renewable energy, distributed and decentralized energy systems, and “buy local” programs in general. At Business of Blockchain, a conference organized by MIT Technology Review and the MIT Media Lab, Orsini said that 69 percent of consumers told the technology consultancy Accenture that they were interested in having an energy-trading marketplace, and 47 percent said they planned to sign up for community solar projects.

LO3 Energy launched its peer-to-peer energy transactions system, which it calls the Brooklyn Microgrid, about a year ago. The miniature utility grid connects people who have solar panels on their roofs in several parts of Brooklyn with neighbors who want to buy locally generated green energy. Like other microgrids it operates alongside, but separate from, the traditional energy grid.

Blockchain makes the Brooklyn Microgrid possible, Orsini said. Participants install smart meters equipped with the technology, which track the energy they generate and consume. Records of the automatic “smart contracts” that enable neighbor-to-neighbor transactions are also tracked using blockchain. LO3 Energy hired the software maker ConsenSys to build the system, which is based on the blockchain-based distributed computing platform Ethereum.

“Blockchain is a really good communications protocol for what we want to do,” Orsini said at the conference. “This isn’t just about settling energy bills,” he added. “It’s about self-organizing at the grid edge, which can’t be done with normal databases.”

Could microgrids like this shake up the energy industry? At the moment, Brooklyn Microgrid consists of only 50 physical nodes, but Orsini signed a partnership with German conglomerate Siemens in November and is talking to regulators in the U.S., Australia, and Europe about expansion. He is also willing to collaborate with utilities. “We’re not putting the utilities out of business, but we want their business model to evolve,” he said.