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Blockchain Technology is Foundation of Brooklyn Microgrid

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Freelance Energy and Technology Researcher and Writer Final Draft Communications, LLC

Karen Marcus has 25 years of experience as a content developer within the energy and technology industries. She has worked with well-known companies, providing direction, research, writing, and...

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  • Sep 23, 2019

This item is part of the Blockchain in Utilities - Fall 2019 SPECIAL ISSUE, click here for more

Blockchain may seem like one of those futuristic technologies we might use “someday.” But, for some residents of Brooklyn, N.Y., someday is now. In fact, for users of the Brooklyn Microgrid, someday was in 2016 when the first peer-to-peer paid energy transaction in the U.S. was made.

At the time, LO3 Energy connected about 50 homes and businesses and created the Brooklyn Microgrid, supported by TransActive Grid measurement technology and Exergy, “a permissioned data platform that creates localized energy marketplaces for transacting energy across existing grid infrastructure,” according to Brooklyn Microgrid. The renewable energy being bought and sold is from wind, solar, and battery storage sources. Company CEO Lawrence Orsini states, “This is a necessary evolution to the energy markets. People want more choice in where and who they get energy from.”

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How It Works

LO3 Energy explains, “[Blockchain technology] makes it possible to count up and log every unit of energy created by one of these home systems…. Software called ‘Smart Contracts’ then makes those units of energy available on the open market to be bought and sold in the local community…. Users can define their energy requirements – choosing exactly where they want to buy from….”

According to SolarReviews, this process enables participants to “produce and trade the power locally, rather than put it back on the larger grid. It also would allow the participants to island from the main grid in the event of hurricane and power outage.”

In the face of more frequent and more extreme weather disasters, this ability to create power during outages is critical. In an article discussing “resilience hubs” (community centers that can provide reliable energy during widespread power outages), Southface states, “Microgrids [such as the Brooklyn Microgrid] on their own…provide opportunities for community resilience and empowerment via communal energy networks more broadly.”

The Benefits of Blockchain

The ability to purchase locally sourced energy, made possible by blockchain technology, helps residents feel empowered and contributes to the reduction of greenhouse gas emissions. It also builds a sense of community as neighbors participate in a shared experience that benefits them all. Data is transferred and stored in a way that’s inexpensive and secure and prices can be determined automatically, based on “auctions” that determine the top price each participant is willing to pay.

Not Just in Brooklyn

A New York Times article explains similar projects in other areas of the world, stating, “The [Brooklyn Microgrid] project is but one example of how rapidly spreading technologies like rooftop solar and blockchain are upending the traditional relationships between electric companies and consumers, putting ever more control in the hands of consumers.” Projects include a residential electricity trading market based on blockchain in Australia; peer-to-peer trading networks among households with and without rooftop solar in Bangladesh; and a network of about 8,000 customers trading stored energy with each other in Germany.

These efforts create more flexibility in how people get power, perfect timing given that “demand for electricity continues to grow globally,” according to an Exergy report. In fact, “The share of electricity in final energy consumption has doubled in the last 40 years from 11 percent in 1973 to 22 percent in 2015.

“With further electrification of transportation expected and increasing numbers of people gaining access to electricity in developing countries this trend will accelerate. With 1 billion people still without access to electricity, meeting these growing needs will require electric capacity to more than double by mid-century on a global scale.”  

As blockchain continues to support these systems, the potential for meeting those needs continues to grow.

What is your experience with blockchain technology or peer-to-peer energy exchange? Please share in the comments.


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