Success stories of Blockchain in the energy sector

The Brooklyn Microgrid and the German Lition Case

By Eduardo Pimazzoni and Tatiana Revoredo

Few know, but there are already some successful projects that use blockchain solutions in the energy sector. Such projects are being implemented in countries such as the USA and Germany, and are already progress worthy of commemoration.

In New York state, LO3 — a case of the Exergy group in partnership with Consensys, created a project benefiting consumers and producers within a community in the Brooklin neighborhood and became a pioneer in the use of blockchain in the energy sector.

Even in the testing phase, the project is considered a success, attracting giants like Siemens.

The Brooklyn’s “Microgrid” Project

This project, popularly known as Brooklyn’s “Microgrid” Project and using the TransActive Grid Open Energy Platform, maintains solar panels installed in five buildings located in a NY community.

The idea here is for Smart Contracts to transform the excess of energy produced and not used into renewable credits, later sold to neighboring buildings, or used by the community itself.

With any neighborhood or region connected to the network, transaction data for each participant is recorded and stored within Blockchain. Through intelligent metering and blockchain, transactions are easily carried out between neighbors. That is, blockchain architecture can create a local community market for renewable energy.

The Lition Energy P2P Platform Project

In Germany, in turn, one of the most advanced countries where blockchain applications in the energy sector are successfully employed, there is the German case of the company Lition. Benefited by the local legislation and by incentives of the German government, it enables the sale and purchase of electricity among ordinary users, guaranteeing objective and transparent rules to this market.

The Lition case promotes a free market between peer-to-peer partners (direct transactions), where Consumer and Prosumer (consumer who also produces energy) carry out energy purchase and sale transactions on the Ethereum network.

In this project, which counts on the SAP partner, two blockchain networks were created that sustain the entire operation. The public data passes through the Ethereum network (one of the main blockchain platforms and the second largest network, behind only Blockchain Bitcoin), while the private part is in charge of SAP. A decentralized application (dApp), used by the user, registers on the network and is able to start the transactions. Critical data is stored in a private, secure, parallel network.

The key idea of ​​Lition, when deciding to join with the giant SAP, is to reduce risks and fill commercial and technical constraints to the adoption of the blockchain technology, still existing, making it attractive to the market.

Why use blockchain solutions in the energy sector

As seen in the “Microgrid of Brooklyn” and “Lition” cases, blockchain architectures are able to strengthen the role of the prosumers. They enable direct peer-to-peer interactions, optimize costs, and increase process efficiency with consumer energy availability at a fairer price.

Participants can decide what price they want to pay, who to buy, and who to sell the surplus, all from the transactions recorded at Blockchain.

The implementation of blockchain in the energy sector allows people to be consumers of this energy or re-sellers. And as a result, they have a multidimensional platform with the potential to create a “smart” and clean society.

Finally, the decentralization of data in the energy sector, provided by blockchain applications, means a more inclusive data ecosystem.

Final considerations

With the digitization of society, where virtually everything is connected to the Internet, electricity is the main strategic focus of any government that wants to overcome the problems of mega-cities and the challenges of population growth.

The use of blockchain enables a “new sharing economy” of energy, facilitating the direct exchange between homes, with all transactions recorded in a decentralized anti-fraud ledger, making bills cheaper.

Finally, using blockchain to record all the dynamics of supply and storage of renewable energy, in a safe and transparent way, is the sustainable answer to the growing demand of world energy consumption.