European power exchange Epex Sot has signed a memorandum of understanding with Brooklyn-based energy technology firm LO3 Energy with the aim of connecting microgrids to the wholesale market using blockchain.
The agreement commits the two to developing solutions that enable microgrid participants to access the wholesale markets, enabling them to sell their surplus generation into markets and buy what they need, when they need it, at market prices.
The firms are planning initial pilots in Europe.
Epex Spot chairman Jean-François Conil-Lacoste said the energy sector faced challenges of “unprecedented dimension”, requiring digital innovation to help deliver “industry revolution”.
Lawrence Orsini, CEO and founder of LO3 Energy, suggested the partnership would deliver “one of the most disruptive applications of technologies in the power markets”.
LO3 Energy’s platform is called Exergy, which it says enables peer-to-peer energy trading while unlocking data at the edge of the grid for utilities.
It has developed the Brooklyn Microgrid, said to be the world’s first blockchain-based microgrid.
The development comes as UK regulator, Ofgem, reviews the current market model, which revolves around suppliers as the industry ‘hub’, or middleman.
Chief executive Dermot Nolan recently suggest that peer-to-peer trading platforms, and other models, “could make the role of conventional suppliers as the ‘middleman’ between customers and the energy system less relevant – or even redundant”.
Meanwhile, Vattenfall, Sweden’s largest utility has recently launched a UK distribution network business with microgrids a key plank of its ambitions.