A Microgrid Grows in Brooklyn

Is this the future of energy?

Image courtesy of LO3 Energy

Lawrence Orsini looks you in the eye, walks you from his tidy office to a separate door where his company runs a prototype, and speaks of the logic behind starting his firm on the eve of a major rush of capital into what used to be a predictable, monopolized market — selling electricity.

In a corner of a ground-floor office in Brooklyn, Orsini’s closely watched software startup LO3 Energy has set out to create what it calls a microgrid platform that has transformed a local neighborhood into a test hub for a new electricity system. If it ramps, participants will be producing power from their brownstones and selling electricity from one building to others, and back to the electric utility.

The company has been working on its software for months, but the project gained far more attention in late 2016, when multinational equipment maker Siemens announced a partnership to build out what LO3 calls its “Brooklyn Microgrid.” That’s a for-now nascent — and for a long time coming — virtual web of buildings whose owners can buy and sell power to each other using blockchain technology to manage the transactions.

The scope of Orsini’s ambition is large, but Siemens’ involvement helps make it tenable on a somewhat short timeline. “We have hundreds of people” signed up for the Brooklyn Microgrid, he said in his office. These are “proof points” for utility companies — all of which, most observers agree, must figure out new ways to make money as power-generating resources become more distributed.

“A utility’s business model has to match the physics,” Orsini said. “Large utilities all over Europe are scrambling because distributed generation is moving to the grid edge so quickly. The core question is: how do you maintain revenues?”

This article can be read in its entirety at Greenbiz.