This Brooklyn Clean Energy Experiment Is Going Global

A neighborhood-based energy trading effort in Brooklyn, New York that uses a blockchain, the technology behind Bitcoin, is expanding to the West Coast and internationally.

You’ve installed a solar panel on the roof of your house, then you go on vacation. While you’re gone, you sell the unused, clean energy generated by that solar panel to your next-door neighbors — by sending the power right back into the grid.

The idea may sound futuristic. But that, in effect, is how a newfangled “microgrid” established in one Brooklyn neighborhood already works. The system keeps track of energy flows between neighbors using the same technology that supports the digital currency known as Bitcoin.

Now, the company behind the Brooklyn microgrid is taking the concept global, in a bid to establish proof-of-concept outposts from Europe to Australia and on the West Coast of the United States.

“We need to do these demonstration projects to show that this is a reality,” Scott Kessler, director of business development at LO3 Energy, owner of the Brooklyn microgrid, told Seeker. “We need to be able to adjust to different regulatory markets.”

The concept has already been shown to work in a Brooklyn community of 60 local producers and 500 consumers.

LO3 aims to launch a new project next year in California called the Sacramento Microgrid, although Kessler declined to give more details. LO3 also has projects underway in Germany and Australia.

LO3 is also developing a international projects with German engineering behemoth Seimens, Kessler said. But he declined to go into details, saying they’re not yet public.

The hope, eventually, is to do nothing less than disrupt traditional electricity markets by giving anyone with solar panels the ability to sell power directly to their closest neighbors. The aim is to both increase efficiency of the system overall and ultimately to make sure no clean electricity is wasted.

“Our platform offers energy consumers the choice to buy energy directly from their neighbors and community,” said Lawrence Orsini, founder CEO of LO3.

The new German projects will be set up in Lazarettgarten area of the town of Landau and in the country’s southern Allgau region.

The Lazarettgarten microgrid will be established in a community of 130 residences and 19 businesses, and is backed by a firm called EnergieSudwest, which is co-owned by local utility Enovos and the City of Landau.

LO3 rolled out plans to expand into South Australia back in July, saying it expected the local microgrid to be up and running within 6-9 months.

“Our systems enable people who generate renewable energy — from small scale houses to larger industrial projects — to get more income by selling direct to consumers,” LO3’s director of Australian operations, Belinda Kinkead, said.

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In the case of the Brooklyn Microgrid, participants are connected to the local utility — but when houses with solar panels generate more power than they need, that extra electricity is sent back into the system to be used by anyone who needs it.

To keep track of the flow of energy, the grid relies on advanced electrical meters capable of reading not only how much power is consumed, but also how much flows in the other direction, back into the grid.

That’s where the buzzy new technology known as “blockchain,” the underlying innovation behind Bitcoin, enters the picture.

Blockchain functions by establishing a shared database between different individuals on a given network — in this case, between everyone on the microgrid and also the electrical company.

Blockchain distributes data packets among users on a network in which all transactions are recorded, time-stamped, and added as new blocks to the pre-existing chain of data — hence the name “blockchain.”

The system is essentially a shared database, visible to everyone and continuously updated, and often referred to as a “distributed ledger.”

Because the data is held by everyone on the system at the same time, blockchains are considered all but impossible to tamper with. That’s how blockchain ensures no bitcoin can exist in two places at one time.

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In the case of a microgrid, blockchain helps make sure electrons flow through the system in a way that each user, along with the local utility, can monitor in realtime — and that no errant electrons go missing.

Eventually, LO3 hopes blockchain technology will open the door to a new model of producing, consuming, and sharing electricity — one that will both boost clean energy and make sure none gets wasted.

“The blockchain is the key to unlocking the real potential of distributed generation,” LO3 CEO Orsini said. “Our Brooklyn microgrid has proven that our blockchain-based hardware and software technology is ready to be taken to the next level.”

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