Going off grid

Walking down street after street of beautiful brownstone houses lined with maple and sycamore trees still shedding their golden leaves, I was hard pressed to think of a commute to work to beat the one I did last Friday morning.

It was only when we reached our meeting with LO3 Energy though, that I fully appreciated the significance the planning and building of this part of Brooklyn at the turn of the last century had played in the energy revolution that we’re seeing in this one.

In April 2016, it was in one of the streets in the Park Slope neighbourhood that transactions took place between households who had installed their own solar systems and those who hadn’t – the first operational pilot of the use of blockchain technology in peer-to-peer electricity trading. The establishment of the Brooklyn Microgrid was driven by the reality that, in areas like this, half the street will be in the sun while houses across the street lie in shade. Both sides of the street saw blockchain as the solution.

Over the past two years, the buzz around this project has spread way beyond New York – and with it interest in the energy blockchain pioneers. Mentioning Centrica’s joint project with LO3 in the UK to pilot an “ebay style” platform for 100 homes and the same number of businesses with the Cornwall Local Energy Market usually sparks interest.

So after talking to cities and regions in recent months about their own smart city ambitions, it was great to have chance while I was in the US last week to visit the LO3 team to talk about prospects for moving beyond pilots and meeting the emerging aspirations for local energy.

For a detailed study of the challenges in the transition to a decentralised energy system driven by digital and data, it’s worth checking out the paper produced by Centrica with the German Marshall Fund of the United States – see here.

Talking with Scott Kessler though, left me thinking there are a couple of priority areas. The first was triggered by the Brooklyn Microgrid app that he demonstrated on his cell phone – which has been designed to increase the community engagement that will be vital for the microgrid to grow. BMG runs monthly drop-in meetings too to explain more about its work, and participating businesses whose panels are out of view are asked to show their support with a sticker in the window to promote conversations with customers.

As Scott put it, we know that people are looking for power to do more than "give them cold beer and warm showers" – but how far are folk prepared to go to support local energy? Some consumers may be happy to get their energy from a microgrid so long as it works out cheaper, for others the important factor may be securing a source they know is sustainable. For prosumers, there are choices around whether they want to keep it local and sell excess energy generated to neighbours or whether they want to trade for the highest price.

Customer preferences then will determine whether participants want to sign up for a micro grid that is able to island from the main grid when it chooses to do so (when there is plenty of local generation and storage capacity) or one that operates more independently. The model below suggests one way of how this might work - but it's still all up for grabs as to what's the best way to manage this.

The role played by regulation remains the other key part of the equation in just how quickly the energy system decentralises. Current trials, like the one in Cornwall, are happening under the auspices of the regulator – to facilitate innovation and test what works but also to safeguard and prevent a rush to a new energy landscape where some are left behind.

Yet there are more and more parts of the country that are itching to do something different and to advance to a local energy future. It was only on my trip last week that I learned the extent to which energy regulation occurs at state level. As my colleagues at Direct Energy reported on some of the outcomes of the mid-term elections, I saw how this can and does lead to markedly different customer experiences across the country.

Maybe we will see the desire for something similar in the UK that reflects different opportunities according to geography and resources available – as David Clubb hinted at in his asks for a new energy policy from the incoming First Minister in Wales last week.

Centrica's initial report on The Future of Our Energy Market published last week sets out some ideas for taking this conversation in to 2019 and beyond. I’m looking forward to that – because if all politics is local, then maybe energy can be too.