LO3 Energy (LO3) has secured backing from Shell and Sumitomo to add to its roster of corporate investors. LO3 technology enables the integration of distributed renewable energy resources into local energy networks and this additional funding round will support LO3 ‘s commercialisation of blockchain based community energy networks.
“The investment from Shell and Sumitomo represents a landmark moment for LO3 Energy as we begin to scale our blockchain-based energy networks around the world,” said LO3 Energy CEO Lawrence Orsini.
“Energy is going through a revolution with renewable distributed energy resources increasingly picking up market share – but to integrate them efficiently we need to re-invent our energy networks. Transactive energy is the key to unlocking the full potential of a cleaner, more distributed and more flexible grid. It also gives more choices to our consumers, allowing them to take a more active role in its energy choices.”
Energy production and consumption
The way energy is produced and consumed is changing:
- from the traditional model, with large-scale power stations supported by long-distance transmission lines
- to a different model where more is produced at the ‘grid edge’ by distributed energy resources (DERs).
There is, therefore, an opportunity to develop a ‘refreshed’ economy around energy achievable by connecting DER together in local energy markets. Doing this produces both financial and environmental benefits for all.
LO3 Energy’s pioneered its ‘transactive energy platform’ with the Brooklyn Microgrid. Users:
- set preferences on a dedicated mobile app
- choose how and when to use the local energy resources available
- select the specific sources they purchase energy from.
The actual electrons flow through the normal grid transmission network. However, a private, permissioned blockchain manages the definition of the energy source and the contract agreement to pay for it. This enables a wide range of business use cases, including:
- peer-to-peer energy trading
- energy hedging for businesses
- virtual power plants
- dynamic electric vehicle charging and demand response.
Mr. Norihiko Nonaka, Executive Officer of Sumitomo Corporation, said: “Under drastic change and innovation in the power sector, especially rapid penetration of decentralized renewable energy, we have the intention to expand our business in the new field created by LO3 Energy. We will work together and support LO3 Energy’s further growth, which can realize a clean, environmentally sound community.”
The Brooklyn Microgrid
The Brooklyn Microgrid (BMG) is a community-driven initiative that began 2016. The project has sought to re-imagine the traditional energy grid model, extending it by adding the concept of a communal energy network. Hundreds of participants have enrolled to test a digital platform which enables people to learn and care about:
- where their energy comes from
- whom they pay for that energy.
BMG seeks to harness the buying power of Brooklynites with an ethical conscience by having them participate in a simulated local energy marketplace. This local energy marketplace is a means to:
- demonstrate to regulators that people care about their community’s energy future
- gauge people’s willingness to pay for locally made renewable energy.
LO3 has developed and deployed its blockchain-based transactive energy platform across multiple markets. This embraces:
- smart meters: Its meter technology measures a building’s energy production and communicates with the network to manage energy
- blockchain: It uses a decentralised digital ledger where private computers verify transactions automatically; as each new transaction is verified, it adds to the ledger
- APIs: The Lo3 Application Program Interface enables collaboration by creating an open path which encourages participation (and innovation) from members across the network
- grid: The technology complements the energy grid(s) already in place while making it easy to establish a community of buildings which can generate, store and trade energy locally.
Exergy is the LO3 permissioned data platform that creates localised energy marketplaces for transacting energy across existing grid infrastructure. It includes support for:
- peer-to-peer: On the Exergy platform, prosumers—generating energy through their own renewable resource—can transact energy autonomously in near-real time with consumers on the platform in their local marketplace
- microgrids: A microgrid is an ecosystem of connected prosumer and consumer energy assets which generate, store and transact energy locally, thereby creating more efficient, resilient and sustainable communities
- DSOs: A distributed system operator needs access to consumer data, like that from building management systems; using price as a proxy, a DSO manages energy use, load balancing and demand response at negotiated in advance rates (meaning that both producers and consumers know what they will earn or pay).
- EV charging: When a charging station (whether public or private) or an electric vehicle has a surplus of energy, this energy can become available for purchase on the local network; Consumers can set budgets and receive alerts as to availability, for example via mobile app.
Kirk Coburn, Investment Director Shell Ventures said: “As we move into a less carbonized future, Shell aims to invest in innovative companies that will help enable the energy transition. LO3 Energy fits right in that space.”
Enterprise Times: what does this mean
Blockchain in the energy space is moving ahead (see also the Fuergy, Power Ledger and WePower examples. Community energy generation and use is also expanding, as the Montecito Community Grid, the BMG and the Clean Coalition demonstrate.
Bringing the two together, as WePower and LO3 are doing, magnifies the potential effect. The fact that enormous energy companies – like Shell, Mitsubishi and Marubeni – are investing underlines that there is depth to what many might regard as a fringe area of renewable electricity generation and consumption.