Brooklyn’s Blockchain Power Grid: The Future of Clean, Green, Community Energy?

The power grid as we know it has had trillions of dollars of investment, and is a behemoth keeping the lights on. But could it be better? And how?

Author Tristan Rayner, 05.17.18

The power grid as we know it has had trillions of dollars of investment, and is a behemoth keeping the lights on. But could it be better? And how?

The increasing uptake in renewable energy, even down to the household level, has promoted new thinking around a less-centralised grid. What’s clear is that the centralised grid to this point has been a magnificent achievement in electrical engineering, allowing for modern and well-maintained grids to offer far-beyond 99.99% reliability, even through rain, hail, wind, storms, and occasional non-natural mishaps as well.

Microgrids are one option, with significant research and development going into all aspects of making it a reality. A microgrid project is already come to fruition in Brooklyn, where power sharing and blockchain serve households, allowing those with solar panel generation to buy and sell renewable power between neighbours.

The concept of far smaller microgrids that can handle supply and demand within itself, as well as put power back into the main grid has been emerging for more than a decade, and the logic can be boiled down to a simple example:

If you have solar panels on your rooftop, but the grid goes down, you might be lucky enough to keep your lights on if you have a battery system and sufficient supply. However, none of your neighbours will be so lucky, even though you live right next door and are both connected to the grid. A microgrid aims to allow for power-sharing in much smaller areas than a centralised grid. Microgrids would normally be connected to the main grid, but could also function autonomously, disconnected from a grid if a larger fault has occurred. The microgrid can then supply useful power to communities during periods of wider faults on the main grid.

This is already happening around the world, with one of the pioneers to be found in New York City. The Brooklyn Microgrid was one of the first communities to be provided with a microgrid, through a collaboration between start-up LO3 Energy and German electrical giant Siemens.

The initiative offers communities the ability to buy and sell power, through blockchain technology. The basic principles of a grid apply, but to ensure it’s fair on both the supply and the demand – and given that a unit of power such as 1kWh is the same everywhere – a blockchain ledger is utilised as the method of accounting, specifically via smart contracts.

Through this system, a major utility company is not required as the middleman. Instead, everyone connected to the microgrid acts as an independent verifier of all buy/sell power transactions, and keeps an independent, verifiable record, which is the power of blockchain. LO3 Energy has continued to pioneer clean energy sharing, making devices and apps to allow owners of solar generation on their homes to sell energy to neighbours, or buy it as well, calling its platform the TransActive Grid.

The requirements for this data processing comes with its own power demands, and LO3 Energy invented a device that processes the data via a six GPU rack, combined with heat-absorbing phase-change material that allows for cogeneration heating in a house, rather than just wasted heat.

The beauty of the system is that it’s now proven, having been in operation for over two years – and we first covered the emergence of the project just under two years ago. Since then it has flourished and other microgrids have emerged based on the technology, including in Australia.

There’s no right or wrong answer to how microgrids can improve reliability, profitability for generators, and community sharing of power. The use of blockchain is of course just one solution – we’ve previously covered SOLshare, which offers competing peer-to-peer technology for energy sharing in small communities. The difference is that blockchain is an immutable record, and allows for any person to examine the energy transactions. However, it does come with additional processing and data sharing requirements.

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