Blockchain ushered in the world's first peer-to-peer energy transaction

Rage Review : Two Brooklyn residents have directly completed an energy transaction using the Ethereum blockchain. This is the world's first small power grid, or microgrid, that uses consumer blockchain transactions and has been used in New York. Such a microgrid is separate from the national grid, and if a hurricane occurs, other grids can be selected without power outages. Through microgrids, rooftop solar equipment installation, etc., energy efficiency is fully utilized, while providing customers with cheap and multiple energy options.

Translation: Nicole

This is where the future of peer-to-peer consumer energy exchanges will come in. The world’s first small-scale power grid, or microgrid, using consumer blockchain transactions has already begun in New York. The first paid energy transaction took place between two people on April 11, when long-time Brooklyn resident and social justice activist Eric Fruman sold excess renewable energy from his solar rooftop installation to former Energy Star International Director Bob Sauchelli on President Street. This also allowed five residents on one side of President Street to generate and sell their excess energy to five residents on the other side of the street.

Bitcoin is to blockchain what Kleenex is to paper towels

- Lawrence Orsini, Founder and Chairman of Lo3 Energy

Brooklyn Microgrid is a small solar enterprise located in the Gowanus and Park Slope communities that allows residents to trade solar energy locally through rooftop solar equipment (without the involvement of the national power company), which is provided by New York startup TransActive Grid (TAG).

TAG is a joint venture with lo3 energy (founded by Lawrence Orsini) and is a consensus system that allows consumers to exchange energy with each other using Ethereum (a combination of smart contracts and blockchain).

Blockchain can create digital ledgers, which are favored by the financial market due to their security, transparency, and real-time operation capabilities.

Lawrence Orsini

Orsini said in a phone interview:

“You can know exactly what happened, when it happened, who consumed what, and who produced what.”

A solar panel installed on President Street in Brooklyn, New York, where the Brooklyn Microgrid is located. (Courtesy of Lawrence Orsini)

Blockchain is widely known to the public because of Bitcoin. As Orsini said,

“Bitcoin is to blockchain what Kleenex is to paper towels.”

After Hurricane Sandy left 2 million New Yorkers without electricity in 2011, the New York governor launched the "Energy Reform Vision" strategy, making full use of energy efficiency through microgrids, rooftop solar equipment installation, etc., while providing customers with cheap and diverse energy options.

In February 2015, Cuomo requested an additional $40 million in bonuses for microgrids that run parallel to the national grid. In the event of a hurricane like Sandy, they can be separated from the main grid and become an independent grid, so that when the main grid collapses, there are other options for electricity.

Orsini said that when electricity is collected from the ground, 30% is lost while it is processed in the power plant, and another 7% is lost when it is transported from the power plant to the distant building.

Orsini does not see microgrids as “disruptive infrastructure but rather developing infrastructure,” he said:

“Building a practical infrastructure is a much more reasonable approach.”