Blockchain technology can enable the next generation of peer-to-peer energy microgrids

Crazy Commentary : The TransActive Grid project, jointly developed by LO3 Energy, a Brooklyn microgrid developer, and ConsenSys, a blockchain technology developer, conducts surplus energy transactions in a peer-to-peer manner. Participating households have smart meters connected to the blockchain to track and record household electricity usage and manage electricity transactions between neighbors. Smart energy grid transactions are more efficient than traditional top-down energy distribution systems - they can save overall expenses, bring benefits to the entire society, and demonstrate the power of distributed ledger technology.

Translation: Nicole

According to Fast Coexist, an experimental energy microgrid in Brooklyn, New York, shows how such energy-generating home units can become part of a peer-to-peer power system. The project is part of the Brooklyn Microgrid - a distributed energy development team in the Park Slope and Gowanus communities of Brooklyn that has created a connected network for local energy - and shows how distributed ledger technology can make the nascent "energy grid" possible.

This is a small project though:

"On one side of Presidential Avenue, five households generate electricity through solar panels; on the other side of the street, five households can buy the electricity that the households on the other side don't need. And what connects this transaction is the blockchain network, which can manage and record transactions with almost no human involvement. "But this idea is very potential and can represent the future community management of energy systems. "

The project, called TransActive Grid, is a joint venture between Brooklyn microgrid developer LO3 Energy and blockchain technology developer ConsenSys, with a primary focus on Ethereum applications, and a partnership with Microsoft on cloud blockchain applications that has been fully covered by Bitcoin Magazine.

Lawrence Orsini

Lawrence Orsini, founder of LO3, said:

“We’re setting up a renewable electricity market right here on this street to test whether people are interested in buying each other’s electricity. If you generate energy far away, there’s a lot of loss in transporting it, and you don’t get the value of the energy. But if you’re right across the street, you can use the energy efficiently.”

Transactive Grid is a pilot project that, if successful, could be expanded to the entire Brooklyn microgrid. Orsini said 130 households are currently interested in the project. Orsini's point is that local smart energy grid transactions are more efficient than traditional top-down energy distribution systems - saving overall costs, bringing benefits to society and demonstrating the power of distributed ledgers.

TransActive Grid includes a smart meter hardware layer and a software layer that uses blockchain smart contracts - contracts that execute automatically on the Ethereum blockchain, which provides an auditable, tamper-proof, encrypted history of automated transactions. Participating households have smart meters connected to the blockchain, which track the amount of electricity used by the household and manage electricity transactions between neighbors.

John Lilic

John Lilic, ConsenSys expert on blockchain energy markets, found:

“Microgrid projects are developing distributed generation and asset storage in the physical world, and ConsenSys is building an Ethereum platform layer in the digital world so we can start developing authorized participants in peer-to-peer microgrid transactions.”

Lilic explained that the energy smart meter data of participants in the microgrid can be used to create tokens for the Consensys token issuance and management system, representing the surplus power of prosumer solar panels. These tokens represent a certain amount of energy produced by renewable energy and can be traded through blockchain smart meter wallets.

"Prosumers" - both producers and consumers - is a buzzword in the emerging shareholding economy. In the TransActive Grid concept, prosumers control their own energy: consumers can choose to buy from neighbors or other renewable energy sources. Home energy producers can sell excess electricity to neighbors, and communities can conserve local energy resources, reduce energy waste, and improve the utilization of micro- and macro-power.

It is clear that the focus of application development in the blockchain world has shifted from payment methods and financial applications to smart contracts for the management of physical resources in the Internet of Things, with smart meters being an example. Blockchain technology is decentralized, secure and self-executing, and can efficiently process complex network data and automatically manage community energy networks. Fact Coexist concluded:

“This could ultimately allow us to move from a top-down energy system of large power plants to a two-way system that executes autonomously.”