Electricity and the Sharing Economy
For those of us who remember receiving a bill stuffer once a year with an envelope to help a needy family with their energy bills, charity is not new to energy. Flash forward to today and technology has made it possible to make energy contributions to friends, family, and community frequently and quickly. There are tools that can be offered up by the utility to their customers, or that can, for the most part, bypass the utility.
One venture that has received fairly wide coverage is Gridmates. The vision of founder Dr. George Koutitas is to alleviate energy poverty. In the spring of 2015, Austin Texas signed on with this cloud based platform for crowd sourcing of energy to be used by the Community First! Village, a planned community providing affordable housing for approximately 240 disabled, chronically homeless people. It is not about sharing electrons directly. Rather, owners of solar panels who are saving money on their energy bills, donate their dollar savings to others through PayPal or a debit card.
One could imagine this type of arrangement being used to share community solar as well. Electric customers who “buy into” community solar get a credit on their electric bills in states with enabling legislation. The Clean Energy Collective, a company that operates community solar, has figured out a way to measure production and interface with utility billing systems so that the customer gets the credit. What if utilities were then able to apply that credit to a customer in need?
A more sophisticated mechanism for support energy sharing is through blockchain. Who would have thought that the blockchain buzz would have anything to do with energy? [Blockchain eliminates the “middleman” and allows for Bitcoin to make sure that money is moved and not copied. This is done through distributed ledgers providing a complete and publically auditable history of all transactions that have happened in the system. Blockchain is backed by network of verifiers and cryptography.]
The application was brought home by a live demonstration by Ewald Hesse the CEO of GridSingularity at the MIT Enterprise Forum event, The Blockchain: Enabling a Distributed & Connected Energy Future, in Cambridge, MA. The event was the brainchild of Chris Taylor of NRG and was orchestrated by Vanessa Fox, Chair of the Cleantech Committee. Hess sent a bitcoin contribution to a pre-pay meter at a technical school outside of Soweto, South Africa to pay for electricity. In a minute or two via Skype the attendees saw a room full of students at the technical school light up. Hesse sees blockchain more broadly as well, for example, as a way to support wholesale market transactions so that virtual power plants that are not big enough to quality as a generation bus today are able to participate.
Ultimately, it may be about community sharing. Another panelist, Lawrence Orsini, co-founder of LO3 Energy, discussed a microgrid demonstration project in Brooklyn that is a joint venture with Consensus. This project will support localized sharing of energy – “localized production and localized consumption”. Ethereum, an open source cryptographically secure blockchain platform, would support those transactions. Still, the technology is still in its infancy when it comes to energy. Joi Ito, Director of the MIT Media Lab, sees a lot of potential beyond financial transactions for blockchain in energy. He warns, though, that we are in the creative period – it is too soon to productize.