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Neighbors trading solar energy on the Brooklyn Microgrid

Patrick Schnell, a participant in the Brooklyn Microgrid, with solar panels on his roof. (Kevin Hagen, NYT)

Brooklyn is known the world over for things small-batch and local, like designer clogs, craft bourbon and artisanal sauerkraut.

Now, it is trying to add electricity to the list.

In a promising experiment in an affluent swath of the borough, dozens of solar-panel arrays spread across rowhouse rooftops are wired into a growing network. Called the Brooklyn Microgrid, the project is signing up residents and businesses to a virtual trading platform that will allow solar-energy producers to sell excess-electricity credits from their systems to buyers in the group, who may live as close as next door.

The project is still in its early stages — it has just 50 participants thus far — but its implications could be far reaching. The idea is to create a kind of virtual, peer-to-peer energy trading system built on blockchain, the database technology that underlies cryptocurrencies like Bitcoin.

The ability to complete secure transactions and create a business based on energy sharing would allow participants to bypass the electric company energy supply and ultimately build a microgrid with energy generation and storage components that could function on their own, even during broad power failures.

“Community members can work both individually and collectively to help meet demand in an efficient way,” said Audrey Zibelman, who recently resigned as chairwoman of the New York State Public Service Commission, which regulates the state’s utilities.

“It takes a central procurer — in this case, historically, the utility — out of the mix,” she continued, “and really sets the market where they’re not buying and selling to the utility but they’re identifying each other’s need and willingness to buy and sell.”

The project is but one example of how rapidly spreading technologies like rooftop solar and blockchain are upending the traditional relationships between electric companies and consumers, putting ever more control in the hands of customers. Across the globe, upstart companies like LO3 Energy, which is designing the Brooklyn experiment with the industrial giant Siemens, are building digital networks that offer the promise of user-driven, decentralized energy systems that can work in tandem with the traditional large-scale grid or, especially in emerging economies, avoid the need for a grid at all.

In Australia, where Ms. Zibelman will soon run the nation’s energy markets, a company called Power Ledger announced the start of a residential electricity trading market based in blockchain last year at a housing development in Perth.

In Bangladesh, where an estimated 65 million people lack access to a central grid, ME SOLshare has been developing peer-to-peer trading networks of rural households with and without rooftop solar systems. Producer-consumers there — known as prosumers — can sell excess power into the network, where neighboring homes and businesses can buy it in small increments with a cellphone.

And in Germany, Sonnen, a leading supplier of home batteries and smart energy products and services, has created a web of about 8,000 customers, both with and without solar on their roofs, who are trading their stored energy among one another.

“Peer-to-peer is slowly but surely becoming a reality,” said Olaf Lohr, Sonnen’s head of United States business development. “This really is a very disruptive technology. The customers are also the owners — they are the producers of the energy. There is no centralized feed-in from one big power plant.”

In New York, the Brooklyn microgrid is conceived to work with the conventional grid, which is in the midst of a reboot under Gov. Andrew M. Cuomo’s directives to make it more flexible, resilient and economically efficient while reducing greenhouse-gas emissions. That effort, known as Reforming the Energy Vision, or REV, includes encouraging the development of microgrids and more active community participation.

The ideal power system, said Richard L. Kauffman, who as the governor’s chairman of energy and finance is leading that effort, is one that combines large power plants and transmission lines with clusters of smaller-scale producer-consumers, “where electrons can flow in more than one direction and supply and demand of electricity is dynamic — and that’s different than the grid is today.”

Peer-to-peer power sharing is consistent with that vision, he said, though a number of regulatory changes are necessary for it to take off.

The State Public Service Commission has already taken a few of them, including last week approving new ways to determine pricing for electricity from renewable energy projects that more accurately reflect the value to the grid based on geographic location, timing and other factors yet to be determined. But Lawrence Orsini, LO3’s chief executive, said the state still needed to determine how to define his company and its network of participants before it could get its market up and running, a move he anticipates by June.

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Neighbors trading solar energy on the Brooklyn Microgrid


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