Tuesday, March 14, 2017

"Artisanal energy trading"

From Matt Levine at Bloomberg View:
...This story about the "Brooklyn Microgrid," a local solar-energy trading collective, has all the things: twee Brooklyn small-batch-ness, solar power, modern "smart grid" energy, "peer-to-peer" trading, the blockchain. Most of all, though, it is about whether and how modern computer and financial technologies can replace trust in institutions:
The idea is to create a kind of virtual, peer-to-peer energy trading system built on blockchain, the database technology that underlies cryptocurrencies like Bitcoin.
The ability to complete secure transactions and create a business based on energy sharing would allow participants to bypass the electric company energy supply and ultimately build a microgrid with energy generation and storage components that could function on their own, even during broad power failures.
If you have bitcoin, you don't need banks for payments. If you have peer-to-peer lending, you don't need them for loans. If you have a "virtual, peer-to-peer energy trading system built on blockchain," you don't need utility companies. I mean, you do! (Personal rooftop solar panels probably aren't supplying all of the microgrid's electricity all of the time. Sometimes it rains in Brooklyn.) But you can talk like you don't. "It takes a central procurer — in this case, historically, the utility — out of the mix," says a former regulator, "and really sets the market where they’re not buying and selling to the utility but they’re identifying each other’s need and willingness to buy and sell."...