Employing Blockchain Technology In the Energy Sector
Blockchain technology, the decentralized and encrypted digital ledger of economic transactions, could soon bring big changes to the way communities receive, consume, and sell renewable energy.
Lawrence Orsini, founder and CEO of the energy and tech company LO3Energy, is keen on the technology and discussed his company’s use of blockchain during a June 17 talk at the California Energy Commission.
By using blockchain technology, LO3 has developed a hyper-local energy market and microgrid system, which allows small communities to buy and sell excess renewable power among themselves.
According to Orsini, traditional, vertically integrated utilities rely on business models that often offer ratepayers little choice or transparency about the source of their power.
“There are people in your neighborhood producing renewable energy,” he said. “The problem is they’re producing it in such small quantities that you can’t officially buy it from them.”
Blockchain technology holds promise in the energy industry where networks of peers—like electricity producers and consumers—connect via the grid and depend on shared sets of data.
LO3’s use of encrypted peer-to-peer transactions allow usage data and other electronic records to remain stored locally on smart meters and devices within a community, rather than an off-site server or data center.
This system can also help secure the larger energy market and help prevent problems inherent in a centralized grid, Orsini said.
“You can only pull so many big levers before you end up with a grid failure,” he said. “Whereas if you have more technology at the edge of the network that can help do some of this work in real time… that’s a different way to run (the grid).”
Orsini was involved in the first ever blockchain energy transaction in 2016 when the company he co-founded—TransActive Grid—enabled a peer-to-peer transaction of renewable energy in Brooklyn.
Today there are more than a hundred blockchain startups operating in the energy realm.
