Global technology powerhouse Siemens AG and a New York startup LO3 Energy have announced a partnership to jointly develop microgrids that enable local energy trading based on blockchain technology.

LO3 Energy is presently being supported by Siemens Digital Grid and next47, which works in the evolving decentralized energy system market, in developing a solution for a blockchain-based microgrid. The first of its kind solution will be developed initially in the New York borough of Brooklyn with future plans for developing other joint microgrid projects in US and other countries, the release stated.

“We’re convinced that our microgrid control and automation solutions, in combination with the blockchain technology of our partner LO3 Energy, will provide additional value for our customers whether on the utility side or on the prosumer side,” Ralf Christian, CEO of Siemens’ Energy Management Division, said.

The planned microgrid for Brooklyn will further be developed with the aid of Siemens Digital Grid in the US. Siemens’s microgrid control solution will be combined with the peer-to-peer trading platform from LO3 Energy known as 'TransActive Grid' and will enable blockchain-based local energy trading between producers and consumers and also balance out local production and consumption in Brooklyn. The preliminary tests of peer-to-peer transactions between neighbors were successfully completed in April 2016. This Brooklyn project also fully supports New York State’s new energy strategy, “Reforming the Energy Vision” (REV).

“In the world of finance, blockchain technology is rapidly advancing across many sectors, but in the energy market, things are comparatively different. With our microgrid solution in Brooklyn, we’ll demonstrate just the beginning of what blockchain can do in the transactive energy world,” Lawrence Orsini, founder of LO3 Energy said.

The platform not only manages generated and stored energy, but also handles the consumers’ flexibility options, in order to increase the efficiency of the overall systems. The combination of TransActive Grid technology from LO3 Energy and microgrid control solutions from Siemens will ease the temporary standalone operation of heterogeneous microgrids.