A peer-to-peer marketplace for clean energy transactions.
Cities consume energy generated a long distance away, a fact that makes communities constantly depending on imported power. Improving access to clean, renewable energy is a set target that cities have to meet by 2030. In this scenario, energy microgrids represent an opportunity to decentralize energy production by off-grid systems for local and clean energy transactions.
What does it take to change a lifestyle?
According to Professors Simon L. Lewis and Mark A. Maslin, authors of The Human Planet (2018), embracing new lifestyles as a society is difficult and rare until we employ a combination of new forms of energy, new information, and an increased collective agency.
These three elements can be traced - in small - within the energy microgrids, a system that employs renewable energy, technological innovation and collective organization to foster lifestyle changes while increasing the overall urban resilience.
Energy microgrids are communities where energy is generated, stored and transacted by the people using it.
Electricity as we know it is generated at power plants far away from consumers' houses and moves through a network - called grid - made of several transformers and power lines. Customers pay their energy bills to intermediary companies - grid operators - for the electricity delivered to their houses, often without being able to know the origin of the electricity they purchase and the source.
Is it efficient for communities to solely rely on imported power? Most likely not, especially in the light of recurring natural disasters, like violent storms and hurricanes, causing power outages in cities.
As a possible alternative, energy microgrids are communities where energy is generated, stored and transacted by the people using it. It is a type of utility grid that can operate independently or alongside a larger power network. The term microgrid refers to the scale of the grid through which the energy moves, in this case groups of households acting as a single controllable entity with regards to energy.
As a reference, a microgrid of 1MW power can serve approximately 200 households, if we estimate an average need of 5 kW per family.
Within a solar energy microgrid, the energy is produced via photovoltaic panels (PV) installed on the roofs of residential or commercial buildings. With their own PV panels, residents - referred to as prosumers - produce renewable energy for self-use and can sell the excess of their production to their neighbors. On the other side of the transaction, consumers can choose, locally, the source of their energy and are able to compare prices.
The energy transactions - the selling and buying - happen through a distributed database using blockchain-based technology. What this technology does is to simultaneously share, update and distribute information on the energy available for transactions, without the need for a central storage facility. Microgrid facilitators, such as for-profit companies, social enterprises, etc., can provide applicants with PV panels, install electric meters and set up the digital marketplace.
One such example is Brooklyn Microgrid (BMG) a network that connects people in Brooklyn who produce and purchase local solar energy. The marketplace is accessible through a mobile app: prosumers sell their energy on which consumers can bid, ultimately concluding the sale by auction.
The BMG started out in 2016 as a community initiative, with the very first energy transaction between two residents of Park Slope. The company was then established as a for-profit benefit corporation by parent company LO3 Energy who develops the backside digital technology.
In 2017, the BMG counted 40 prosumers, with the intention of growing the community up to 1000 by 2018. An interesting interview by Cities Foundation to the BMG Director of Business Development can be found here.
Benefits and criticalities
As shown, rediscussing the way energy is generated, stored, sold, and used is critical for improving urban resilience and for establishing local circular networks at the scale of the neighborhoods. The benefits of energy microgrids are numerous:
Clean and renewable energy;
Reduction of Greenhouse gases (GHGs);
Optimize energy productivity: less energy dispersion and increased productivity due to the proximity between the energy source and its final users;
Local economic development;
Increased urban resilience.
The criticalities of this system lay in the operability within the traditional utility regulations. Although energy self-production is increasingly being encouraged, the possibility of independent sales between private citizens is not often granted by national laws. In fact, permission from the standard grid operators regarding how much energy one is allowed to import/export may apply. Additionally, prosumers wanting to sell their energy surplus to the national grid might end up to transfer it for free.
The wish is for Governs to regulate and encourage microgrid independence - more power capacity and operability - from the standard power operators. Access to clean energy at the scale of the neighborhood is a strategic upgrade to improve cities' urban ecosystems, allowing new and positive interactions between natural and built components.
Brooklyn Microgrids https://www.brooklyn.energy/about
Brooklyn Microgrids an interview https://citiesfoundation.org/2017/13061/
Electricity explained https://www.eia.gov/energyexplained/electricity/delivery-to-consumers.php
Sustainable Development Goal 7 https://www.un.org/sustainabledevelopment/energy/
The Human Planet: How We Created the Anthropocene, Simon L. Lewis, Mark A. Maslin, Yale University Press, 2018
The Wasted City: Approaches to Circular City Making, Trancity, Edited by Cities Foundation, 2017.