CBInsights: Blockchain Is Making Its Way Into The Energy Industry

BLOCKCHAIN-ENABLED ENERGY TRANSACTIONS

The majority of blockchain energy projects are focused on peer-to-peer (P2P) energy marketplaces.

In Brooklyn, a partnership between LO3 Energy and Siemens has established the Brooklyn Microgrid, which allows customers to buy and sell energy to their neighbors via the blockchain. This means they don’t need to go through the utility, which is the central grid that provides electricity to most American communities. Instead, those with energy-producing sources, like solar panels, can sell their unused energy to their community.

P2P energy sales have a few advantages. They can be cheaper than buying electricity from the grid.

In NY, utility charges include several fees — property and sales taxes, the maintenance of wires and substations, covering costs that your provider may have paid for the electricity in wholesale markets. Consumers who are producing energy — like those who have solar panels on their roofs — are required to sell any energy that they haven’t used back to the grid.

P2P energy sales also open up the possibility of distinguishing where energy is coming from — renewables, coal, oil, and gas — which allows consumers to choose renewable energy, for example. Traditionally, grids generally measure electricity as net amounts and don’t allow consumers to pick and choose.

Customers can support renewable energy even if they don’t have the technology to produce it. If a neighbor is using solar panels, for example, the Brooklyn Microgrid provides a way to buy off their surplus electricity.

British multinational utility company Centrica, Braemar Energy Ventures, and German industrial manufacturing company Siemens have invested in LO3 Energy.

The Sun Exchange expands the P2P marketplace model beyond local communities, allowing users to buy solar panels in sunny parts of the world and lease them out to customers. One of its projects is in Knsyna Elephant Park in South Africa, where it’s already sold out 60kW of solar panels. It only begins installing solar panels once it’s sold out everything involved in its project.

The company has raised several rounds of early-stage investment, including accelerator backing from Kalon Venture Partners, Plug and Play Accelerator, Techstars, and Barclays Accelerator.

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