Siemens and the New York startup LO3 Energy are collaborating in the field of innovative microgrids. The goal of the collaboration is to jointly develop microgrids that enable local energy trading based on blockchain technology. Siemens is involving its next47 unit, which was established in October this year as part of an ecosystem for partnerships with startups to take a leading role in the evolving decentralised energy system market.
LO3 Energy is currently being 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 US and other countries.
“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.
Lawrence Orsini, founder of LO3 Energy: “In the world of finance, blockchain
technology is rapidly advancing across many sectors, but in the energy market, things are … different. With our microgrid solution in Brooklyn, we’ll
demonstrate just the beginning of what blockchain can do in the transactive energy world.”
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 Brooklyn’s Boerum Hill, Park Slope, and Gowanus neighbourhoods as well as 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. As an example, the cryptocurrency Bitcoin uses the blockchain process in the financial 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.
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