Although blockchain was originally invented to serve as the public transaction ledger for Bitcoin, the revolutionary technology’s potential functions reach far beyond the world of cryptocurrencies. Blockchain has been widely buzzed about for several years now due to its potential to vastly overhaul the global energy sector, but so far the industry has been slow to adopt the new technology on a large scale. Now, Japanese independent power producer Marubeni has partnered with Brooklyn-based blockchain tech startup and self-proclaimed "transactive energy company" LO3 Energy to start a pilot project in Japan.
The energy producer and tech startup will be using blockchain technology to create a virtual energy marketplace connecting multiple power production facilities owned by Marubeni (a mix of traditional and renewable) with offices and factories across Japan. This pilot project will simulate real energy transactions in order to experiment with the viability of using this framework to ultimately develop a complete, commercially successful network.
LO3 Energy’s trademark transactive energy platform saw its debut with the development of the Brooklyn Microgrid. The rise of renewables has created new challenges as well as opportunities for the energy industry with the introduction of a new concept in modern energy production: producer-consumers, those consumers who are now able to produce their own power in excess through private means of generation like residential solar panels and selling the extra back into the grid. In the case of the Brooklyn Microgrid, this is where LO3 fits into the picture.
LO3 Energy’s platform makes use of standard electricity meters in conjunction with blockchain-enabled TAGe computer devices to keep track of energy data and power quality measures, as well as to communicate with other devices connected to the network, ultimately facilitating energy transactions. The energy itself flows into the normal grid, same as always--the difference lies in the transactions themselves (defining the energy sources and the consumers’ payments) --which is controlled by the private, permissioned blockchain. This dynamic allows users to interact, choose specific energy sources, and set their energy budget, all through a specialized mobile app. Related: The Geopolitics Of Cheap Tabloids
Now, LO3 Energy aims to bring their revolutionary approach to energy sharing overseas to Japan. LO3 Energy chief executive Lawrence Orsini said about the new pilot project, “The Japanese energy sector is in the midst of a drastic transition, and there are increasing numbers of private power producers and suppliers interested in developing new customer offerings particularly in the renewable energy space.” Although the pilot project is just to test the model’s viability on a small scale, Orsini expressed that “it is very much driven by the desire from Marubeni to explore the opportunities that blockchain management systems can offer in the transaction of energy throughout Japan.”
Yoshiaki Yokota, Chief Operating Officer of the Marubeni Power Business Division, has said as much in his own words. Speaking of LO3 Energy, he said, “Their successful use of blockchain in the Brooklyn Microgrid and other projects around the world has shown us the potential for providing consumers with more energy choices and, crucially, improving efficiencies in energy usage.” Marubeni’s new pilot project in partnership with LO3 will allow the Japanese power producer to “develop case examples that we can use to decide how and when this kind of project could be implemented widely.”
Although projects like the Brooklyn Microgrid and the new Marubeni-LO3 Energy pilot project show huge promise and have attracted a massive amount of hype as well as venture capital, they are still just the innovative exception to the rule. Despite bold claims over the past few years of blockchain’s imminent takeover of the global energy industry, we are still a long way from seeing the young technology become mainstream. That being said, programs like the one now underway in Japan are sure to pave the way for more widespread adoption of blockchain (and therefore hopefully more renewable energy sharing) down the road.
By Haley Zaremba for Oilprice.com