Siemens collaborates with LO3 Energy on blockchain microgrids

Lindsay James
Lindsay James
By Lindsay James on 24 November 2016
Siemens collaborates with LO3 Energy on blockchain microgrids

Siemens and the US-based startup LO3 Energy have announced that they are collaborating on innovative microgrids using blockchain technology, enabling local energy trading. This is the first project of its kind in the world.

“The constant evolution at the grid edge requires advanced control, automation and data analytics technologies enabling secure, stable and reliable integration of decentralised energy systems as well as supporting the establishment of new business models. We’re convinced that our microgrid control and automation solutions, in combination with the blockchain technology of our partner LO3 Energy, will provide additional value for our customers whether on the utilities side or on the prosumer side,” said Ralf Christian, CEO of Siemens’ Energy Management Division.


The microgrid planned for Brooklyn, New York, started as a pilot project by LO3 Energy. It’s now being further developed with the aid of Siemens Digital Grid in the US. 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 and balance out local production and consumption.


Blockchain technology is an innovative 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 centralised monitoring. Thanks to a cryptographic process and distributed storage, the possibility of manipulation is virtually eliminated. In addition, authentication processes guarantee the confidentiality of user data.


Lawrence Orsini, founder of LO3 Energy, said: “In the world of finance, blockchain technology is rapidly advancing across many sectors, but in the energy market, things are comparatively different. With our microgrid solution in Brooklyn, we’ll demonstrate just the beginning of what blockchain can do in the transactive energy world.”


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. Preliminary tests of peer-to-peer transactions between neighbours were successfully completed in April 2016.


“We are envisioning tremendous opportunities for the application of the blockchain technology, especially in microgrids with distributed and decentralised energy systems. Its big benefit is, that it permits transparent, efficient trading between multiple participating systems and various stakeholders while taking grid-specific requirements into account”, said Thomas Zimmermann, CEO of Siemens’ Digital Grid Business Unit.


To increase the efficiency of the overall systems, the platform not only manages generated and stored energy, but also handles the consumers’ flexibility options. In addition, the combination of TransActive Grid technology from LO3 Energy and microgrid control solutions from Siemens will simplify the temporary standalone operation of heterogeneous microgrids – for example, following a natural disaster – and optimise the use of existing resources within the grid infrastructure.


The Brooklyn project thus also fully supports New York State’s new energy strategy ‘Reforming the Energy Vision’. With the help of this strategy, the state’s power supply industry is to be reorganised to increase grid efficiency, minimise the power supply system’s susceptibility to environmental disasters, and improve this system’s carbon footprint. Based on experience with the pilot project in Brooklyn, Siemens and LO3 Energy intend to implement additional blockchain-based microgrid and Smart City projects to test out various other business models and gain insights about the replicability of solutions on other regions of the world.


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