Two residents of Brooklyn used the Ethereum Blockchain to trade electricity with each other.
This was made possible by the Green Energy Startup LO3, which wants to change the electricity market with the help of the blockchain. This will open up a new market for the blockchain in addition to the banking sector.
LO3 co-founder Lawrence Orsini says the exchange was made to demonstrate how easy it is for everyone to use the blockchain for peer-to-peer exchanges.
So says Orsini to CoinDesk about the Bitcoin revolution:
“In all Bitcoin revolution projects we have a clear focus on the emerging decentralized economy, i.e. peer-to-peer concepts. They all focus on the distribution and decentralisation of resources and goods in communities and between people themselves – the new economy of the Bitcoin revolution future is not a scam“.
This cooperative approach is called TransActice Grid and is made possible by LO3 and decentralized applications of the start-up ConsenSys. This allows Brooklyn-based Eric Frumin to sell his solar panel-generated electricity directly to Bob Sauchelli, a former manager of EnergyStar, a publicly funded green energy initiative.
Every single unit of electricity generated by Frumin is counted and logged by the Ethereum blockchain. Programmable Smart Contracts are used to make individual power units available to the energy market.
Ethereum enables a new kind of Bitcoin revolution partnership
With the installation of the power grid in its neighborhood, Frumin is able to offset its Bitcoin revolution power consumption with some solar panels on its roof. He can sell any surplus energy he produces to an energy supplier at wholesale prices and not as a scam.
Sauchelli tells CoinDesk:
“Through this arrangement, I pay him the entire premium for the electricity and it costs me nothing more than to buy the electricity from the large corporation. But he gets the whole premium for it and not only a part of the wholesale price.”
The last point was decisive for Sauchelli’s decision to participate, he tells CoinDesk. While it is important to him to obtain green energy, the acquisition must be just as easy as with a classic power company.
Joseph Lubin, co-founder of TransActive Grid and ConsenSys, goes on to explain this point:
“The electricity market is becoming more and more decentralized due to low-cost photovoltaic systems, increased consumer awareness and efficient regulation. But so far it has not been possible to feed the electricity it generates into the grid and sell it directly to other people living on the same street.”
Ready to expand
Currently, environmentally conscious electricity consumers have the opportunity to purchase renewable energy certificates to support renewable energy production around the world. But with TransActive Grid and another LO3 project, Brooklyn Microgrid, both electricity and money remain local.
“The benefits of producing electricity here in the neighborhood are significantly higher than in Nebraska, for example. So there is no incentive to buy electricity from Nebraska.”
Especially for Germany, the country of the energy revolution, the presented approach is almost predestined. After all, the German government has set itself the target of increasing the share of renewable energies to 55 to 60 % by 2035. Correspondingly, the autonomous and decentralized generation of electricity by private households will also increase, above all through solar systems. As a result, the demand for intelligent and economical power solutions will increase.
The project from Brooklyn also presents a solution with the Ethereum blockchain and Smart Contracts. Just as the blockchain calls into question the necessity of banks or certain financial services, it can also make the established power companies a bit redundant.
The promoted expansion of storage technologies and smart grids (intelligent power grids) in Germany would benefit greatly from using blockchain solutions, especially on an ethereal basis. Initial approaches are already underway. For example, the startup slock.it is working together with the RWE Innovation Hub on charging stations where ether can be used to charge cars (click here for the complete article).