Siemens and the New York startup LO3 Energy are working to jointly develop microgrids that enable local energy trading based on blockchain technology. Siemens is involving its next47 unit, which was established in October as part of an ecosystem for partnerships with startups to take a leading role in the evolving decentralized energy system market. As a startup, LO3 Energy is supported by Siemens Digital Grid and next47 in developing a solution for a blockchain-based microgrid in the New York borough of Brooklyn — the first of its kind in the world and a starting point for developing other joint microgrid projects in the U.S. and other countries.
The microgrid planned for Brooklyn, which started as a pilot project of LO3 Energy, is now being further developed with the aid of Siemens Digital Grid in the U.S. For the first time, a microgrid control solution from Siemens is being combined with the peer-to-peer trading platform from LO3 Energy known as TransActive Grid. This solution will enable blockchain-based local energy trading between producers and consumers in three Brooklyn neighborhoods as well as balance out local production and consumption.
Blockchain technology is a method of storing and validating data that permits direct transactions between energy producers and consumers. Transactions are trackable and tamper-proof on distributed systems without the need for centralized monitoring. Thanks to a cryptographic process and distributed storage, the possibility of manipulation is virtually eliminated.
The combination of a microgrid control solution and blockchain technology will make it possible for a provider of photovoltaic systems on the roofs of buildings in Brooklyn to feed its excess electricity back into the existing local grid and receive payments from the purchasers.