
Brooklyn’s Latest Craze: Making Your Own Electric Grid - ohjeez
http://www.politico.com/magazine/story/2017/06/15/how-a-street-in-brooklyn-is-changing-the-energy-grid-215268
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erentz
Can someone explain how this works? It's not like they built a new grid in
Brooklyn. I'm not sure why it's called a micro grid. Presumably if the house
with the panels sends its excess into the regular grid they get credits or
money for this from the local electricity utility. But to make this trading
across the grid happen is there some market system that allows them to say,
hey this electricity generated over here is bought by this consumer over here?
If so that seems like it has nothing to do with block chain and is just an
offering of the local utility and/or the energy market regulator.

Actually, it kind of sounds like all this company is doing is being a middle
man to collect money from customers who want to feel green without adding any
value.

(I may have this completely wrong, I am genuinely curious how this makes sense
though.)

~~~
roymurdock
I think you're mostly right, but it's hard to tell.

The company doing this, LO3 Energy, is installing one piece of hardware - a
"Tag Element" \- next to a participant's existing energy meter.

The Tag measures how much excess electricity a PV/Solar panel generates.

The Tag sends that information on LO3's blockchain ("Transactive Platform") -
essentially crediting whoever produced the electricity, and giving another
participant the option to buy this "excess energy" directly from the PV/solar
installation.

The end result is that someone can feel like they've bought the exact
electrons from the participant with the PV/solar installation, while in
reality, they've just bought some more energy from the grid.

I'm not sure how the pricing scheme operates, and if there are different
prices for dirty grid energy vs renewable neighbor microgrid energy.

[https://www.youtube.com/watch?v=oLsKQfjbYNg](https://www.youtube.com/watch?v=oLsKQfjbYNg)

I'm also not sure how or why the project is marketing that this grid could
withstand a power outage or extreme weather as they are not installing direct
physical lines between the PV/Solar producers and other microgrid users.
Presumably the entire system would go down if the main utility went down - the
PV/Solar guys could power their own homes, but there would be no way to get
that electricity to other consumers.

~~~
eigenvector
It's true that you can't really "buy" specific electrons from a micro-
producer.* But providing a platform for the exchange can be beneficial,
because it allows the producer to monetize their activity in a way that might
not otherwise be possible, creating the financial incentives for them and
others to (further) invest in creating more production capacity. Of course,
for this to be useful the revenue obtained through the platform has to be
higher than what you could get without it.

This is the same idea as Google and Facebook signing power purchase agreements
with wind or solar farms. Goog/FB of course get their power from the grid and
not a direct link to the wind/solar farm, but by creating the financial
instrument of the PPA (typically at a higher than market price) they allow the
producer to finance their project which can make the difference between it
being built or not. It's a lot easier to finance a project when someone has
committed to buy all your power at a fixed price for 20 years vs the
uncertainty involved in the spot power market.

* this is true even at a conceptual level without getting into the physics of how electrons don't actually get transmitted from a power plant all the way to your house

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philipodonnell
>
> [https://www.youtube.com/watch?v=oLsKQfjbYNg](https://www.youtube.com/watch?v=oLsKQfjbYNg)
> \- "Right now the way the utility grid works, you don't know where your
> electrons come from and there isn't really a way for you to account that
> those electrons are making it to you, and no way to account for who touched
> the electrons on their way to you. That doesn't have to be the case."

I may be cynical here but the problems described in the above either don't
seem like problems or they don't actually solve them. I've never wondered "who
touched my electrons". I've never thought "I wish I could audit my electric
utility's transaction history through a blockchain". They talk in the article
about about having backup power if the main grid goes down, but there's no new
wiring here so it doesn't do that.

I just have no idea what value this company provides other than a box that
tells you who touched your electrons.

~~~
galdosdi
Electrons travel way slower than the energy they transfer. Also, the grid
provides alternating current, so the electrons never travel more than a few
inches.

So if you want to know where your electrons come from, well, they all come
from the wiring in your house.

~~~
colanderman
"Electron". There's only one ;) [https://en.wikipedia.org/wiki/One-
electron_universe](https://en.wikipedia.org/wiki/One-electron_universe)

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gjem97
I love the idea. I think microgrids make sense for a lot of applications.
However, I don't see how the blockchain really fits in to it. At the end of
the day, someone has to maintain the shared infrastructure: the wires that
connect the homes in the microgrid, and presumably some hardware to manage
connecting to the macrogrid. That organization a) needs to be funded somehow
and b) is a logical central party for managing the flow of electrons and
money.

~~~
leggomylibro
Yeah, it really seems like a better application of a 'micro-grid' would be to
provide alternative green electricity to your neighbors.

Like okay, you have a bunch of solar panels and a battery bank. Why not let
people plug in at a kiosk near the bank? At a micro scale, your neighbors
could hook up a heavy-duty appliance cable or two to their houses. You could
use RFID cards, magstrip cards, username/password, a web frontend, an app, etc
for identification, metering, and billing.

Sure you could accept cryptocurrency for account credits, but you could also
accept cash or credit/debit. It's just another payment processor.

~~~
icebraining
Well, assuming the law lets you do that at all. In my European country, my
uncle tried to do something similar (purchase a wind turbine and sell
electricity to his village neighbors) and he discovered there's simply no
legal way to sell electricity except to the main grid company.

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wolfgang42
I think "where did my electrons come from" is a question that many
environmentally conscious but not particularly technical people are asking. My
parents got a letter from our power company about ESCOs and I wound up having
to explain to my mother how a power grid works and how the generators put
power in and we take power out, but not necessarily the _same_ power that we
purchased from them. (It seems a lot of people have trouble with the concept
of fungible commodities in general, which is why the envelope budgeting method
is so successful: it 'de-funges' the money and makes the budget a lot easier
to think about.)

It sounds like this company is taking advantage of this confusion to give
their customers peace of mind about actually "knowing" where their electricity
came from, instead of sending some money off to the power company and hoping
they do what they said they would with it. To this they add some buzzwords
like "blockchain" and "sharing economy" to make the company more interesting
so it gets featured in news articles. There may be some actual technical merit
in there, but it's very difficult to tell under the hype.

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bradleyjg
The article is pretty light on details. It's unclear if there's any new
physical infrastructure being put in place or if the "microgrid" is a
financial overlay built on top of con-ed's wires. And I'm entirely unclear
where exactly a blockchain fits into the architecture.

~~~
FireBeyond
I don't think there's much substance, to read this.

If anything it almost seems like this company is "Enron"-ing its way into a
middle man rent collector role without doing much of note.

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matt_wulfeck
I would live to sell my excess solar energy on the public markets for anything
_near_ retail costs. Currently PG&E has a sweetheart deal where they resell it
for retail and pay me wholesale. That's approximately a 1000% markup. Not bad.

~~~
bradleyjg
How is that a sweetheart deal? Would you be outraged if the local supermarket
wouldn't buy eggs from you at retail price? How could they possibly stay in
business if they were forced to pay their suppliers the same amount of money
they charged their customers?

Even wholesale is generous since actual suppliers they deal with voluntarily
do things like guarantee certain availability and sell in bulk.

~~~
matt_wulfeck
If only the supermarket could resell eggs at a 1000% markup! That would mean a
dozen of eggs only cost them 3 cents.

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rohanshah
The article didn't really go into detail on how LO3 uses the blockchain as
part of their technology, so this may be unrelated, but this podcast [1]
better articulates some insight into on how the blockchain could be used to
affect the energy sector, specifically the grid.

[1] [https://www.greentechmedia.com/articles/read/beyond-
bitcoin-...](https://www.greentechmedia.com/articles/read/beyond-bitcoin-we-
explain-how-blockchain-could-transform-the-energy-sector)

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IshKebab
Blockchain! Blockchain! It's how you know something is a gimmick.

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joshdance
Love the idea of micro grids. Why does it need to use blockchain?

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deegles
Given how notoriously energy intensive it is to process a blockchain
transaction, I wonder what the lower bound is for each transaction to use more
energy than the solar panel outputs. Not sure how to do the math on that :)

~~~
polskibus
Perhaps you were thinking about Bitcoin instead of blockchain? Blockchain
doesn't have to rely on expensive mining, it's all matter of incentive
structure. For a microgrid, fees and algos don't have to be that expensive.

~~~
deegles
I found an article saying they're working with ConsenSys, which uses Ethereum.
Of course they might have an independent chain but that was my impression.

[https://www.technologyreview.com/s/604227/blockchain-is-
help...](https://www.technologyreview.com/s/604227/blockchain-is-helping-to-
build-a-new-kind-of-energy-grid/)

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thebiglebrewski
Just wanted to say as a Brooklyn resident: I know nobody doing this. So maybe
not "the latest craze"? Cool idea though.

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rglover
Admittedly, I didn't read this yet but all I could think of when I read the
title were hipsters dressing up like Nikola Tesla, accidentally electrocuting
themselves.

