Blockchain Is Helping to Build a Fresh Kind of Energy Grid – MIT Technology Review
Blockchain Is Helping to Build a Fresh Kind of Energy Grid
- by Elizabeth Woyke
- April Nineteen, 2017
If you have solar panels that produce more energy than you need, you can sell the excess to a utility company. But what if you could sell it to your neighbor instead?
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A company called LO3 Energy has developed a system that lets people buy and sell locally generated solar energy within their communities. The system uses blockchain—the electronic ledger technology that underpins the digital currency Bitcoin—to facilitate and record the transactions.
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 request 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 sixty nine percent of consumers told the technology consultancy Accenture that they were interested in having an energy-trading marketplace, and forty seven 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 wise meters tooled 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 truly good communications protocol for what we want to do,” Orsini said at the conference. “This isn’t just about lodging 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 jiggle up the energy industry? At the moment, Brooklyn Microgrid consists of only fifty physical knots, 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.
Hear more about renewable energy at EmTech MIT 2017.