Blockchain Technology Applications Off-the-Grid Solar Power Neighborhood Marketplace on the Blockchain in Brooklyn, NY. Part 3. Goals of Brooklyn Microgrid
Brooklyn Microgrid is very different from companies such as Green Mountain Energy because Brooklyn Microgrid does not deal with renewable energy certificates. Instead, it enables members of the grid to sell and buy energy directly from each other.
The concept of having a microgrid in a local neighborhood is not new. The current problem with microgrids (all microgrids, not necessarily the ones powered by blockchain technology) is state and local regulations about who can sell energy and what is required to do so. In most states, a few giant corporations control the market. One of the states that is an exception is the state of Texas, where the State Senate has on January 1, 2002 passed Texas Senate Bill 7, which has deregulated the electricity marketplace in the state. As a result of the bill, over 80% of residents of the state of Texas can choose their electricity provider from a list of competitors. Since 2002, over 80% of homes and entities have switched their provider at least once. Right after the Senate has passed Bill 7, electricity prices in the state went up, but after 2010 they have dropped significantly and have been lower than the national average.
The goal of Brooklyn Microgrid project is to enable Brooklyn residents to do so in the neighborhoods of Gowanus and Park Slope.
One neighbor may have solar panels on the roof of the property that generate more energy that he or she needs. In this case, he can sell this energy directly to one of the neighbors using blockchain technology.
Brooklyn Microgrid uses TransActive Grid platform that runs on the Ethereum network.
Brooklyn Microgrid: a partnership between LO3 Energy and ConsenSys
Robert Sauchelli and Eric Frumin are two neighbors from the Park Slope area of Brooklyn. They have conducted the first transaction on the TransActive grid in April of 2016. Frumin owned solar panels that were producing more energy than Frumin’s household was consuming, which is why Frumin chose to sell some of his energy to Sauchelli, whose household didn’t have any solar paents at the time. (source: https://motherboard.vice.com/en_us/article/d7y7n7/transactive-grid-ethereum-brooklyn-microgrid )
With Brooklyn Microgrid and TransActive platform, there have been no new wires, pipes or hardware. It is all about allowing neighbors to transact directly with each other using existing hardware infrastructure. The groundbreaking opportunity is allowing a person that wants to use more green energy by this energy from a neighbor in the same neighborhood using peer-to-peer blockchain technology. This kind of person is exactly the customer that Microgrid and TransActive are interested in attracting.
The grid is a hyper-local project in which neighbors can trade energy to protect the environment in their communities. This is one of the reasons why Microgrid has such a tremendous potential. While most people today say that they want green energy, there is a big difference between buying green energy certificates from a large company with headquarters in a different state and buying energy directly from a neighbor. In the latter case, people know exactly where their energy is coming from, which is very different from buying energy that comes from a green source somewhere.
People who care about where their energy comes from typically want more local control. Because of this, they are also more likely to own their own homes. In turn, homeowners have more control than renters about what they can do with their homes and this includes the ability and having funds to install solar panels. For this reason, microgrids like the Brooklyn microgrid have a potential to transform many neighborhoods all across the country.
TransActive grid is a joint venture between Lo3 Energy and Consesys Systems.
Lo3 Energy creates both hardware and software for project in energy-related industries. For this reason, the company does not see itself as a “blockchain company.” Instead, it is an energy company that uses blockchain to better accomplish its goals and serve its customers (source: https://www.wealthdaily.com/articles/scott-kessler-talks-blockchain-l03-energy-and-the-future-of-the-energy-industry/9198 ).
Benefits of having TransActive grid on the Ethereum platform
One of the reasons why the creators of the Brooklyn MicroGrid have chosen the Ethereum platform to run the transactions between neighbors is the smart contract functionality of the platform.
A smart contract on the Ethereum platform is computer code that describes a set of rules that execute automatically when the conditions for the rules are met. For example, when a person is selling or buying electricity from a neighbor, these conditions and rules could tell the hardware to stop the flow of electricity at certain points, to increase or lower the price and so on.
Smart contracts are very different from just distributed computing, which is something that existed for many years before blockchain technology. Typically, distributed computing means distributed load, when multiple computers solve problems that come from one central location. For example, if there is a huge file in which each line represents a mathematical operation, such as 3234*333 – 2222 + 2222 =, distributed computing is about splitting this file into pieces, sending the pieces of the file to different machines, having the machines do the calculations simultaneously and then sending the results back. This makes solving complex mathematical problems much quicker.
Smart contracts are completely different from distributed computing. In the example above, there would be no central authority that breaks down the file into pieces. Instead, each computer would receive the entire file and perform all of the operations on its own. The participating computers would then compare the results to make sure that the results are the same.
A smart contract on the Ethereum network consists of four parts. The first part is the actual computer code with the terms of the contract. This is a set of “what if/then” statements that describe what happens when according to the agreements in the contract. It is important to note here, that while blockchain technology does indeed serve as a third party and when using smart contracts, participants do not need to use lawyers or any other kinds of external enforcement, contracts may have loopholes. For example, you may create a contract with a friend that describes what happens when you disagree with each other, but that does not describe what happens when one of you gets sick and can’t participate in the contract anymore. For this reason, hiring attorneys and getting legal help when creating contracts may still be a good idea.
There is an expression among computer developers that says “garbage in, garbage out.” Practically, this means that if you feed a machine data that makes no sense or data that is incomplete, the machine will not be able to turn this data into something that does make sense or is complete. A machine can only do what it is told to do.
The second part of a contract specifies where the network is going to store the contract. The third part is execution. Finally, there are updates to the contract and payments of funds.