This interview is part of our new Blockchain In Energy series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and energy.
In this interview we speak with Lawrence Orsini, CEO and founder of LO3 Energy, to understand how his company is using blockchain to transform the energy business, and what the future of the industry holds.
1. What’s the story behind LO3 Energy? Why and how did you begin?
LO: Starting LO3 was a foregone conclusion given what was happening in the energy marketplace. When we started, back in 2012, it was clear the energy industry was facing a massive change in how it had to be run.
Right now, making energy is about one of the dirtiest things we do on the planet. It puts more toxins and pollution in the air than just about any other industry and the environmental issues related to that are moving quickly.
Technology is now at a point where we are starting to see more and more power coming from Distributed Energy Resources (DERs) located within local communities rather than big power stations.
The current grid can’t cope with that, so old business models are being evolved, disappearing even. LO3 was founded to focus on some of those new changes and provide solutions for them.
People often ask where the name came from. I had a friend who was a news reporter and I visited the studio. It seemed chaotic but just before the newscast the executive director said ‘ok, we’re Live On 3, 2, 1…’
Suddenly, all the chaos turned into a well polished broadcast. That’s LO3. The new technologies in the energy market are creating a frenzy; our tech provides the defining moment where it starts to align and make sense.
2. What is your use case and how is LO3 Energy using blockchain to transform the energy industry?
LO: We use blockchain technology to create Local Energy Marketplaces which connect DERs with consumers around them and make it possible for people in local communities to buy and sell energy between each other.
The strengthening environmental movement is demanding better solutions and local energy networks help consumers drive change and help utilities to facilitate new renewable energy offerings for their customers.
The energy network is going to need to re-organize itself around grid edge generation and consumption and we need local energy marketplaces to help balance the clusters of load and generation in different communities.
There will still be a utility grid to enable energy transmission between these communities, but the need for large-scale central station power plants and the long-distance transmission of energy will disappear.
The whole intent of LO3 is to enable consumer choice, so you can decide with your dollars what the future looks like, who you’re buying energy from, where it comes from and how it’s produced.
Blockchain technology offers a solution for local networks that can work both for communities who want to take control of their energy and for utilities who want to integrate local resources into their supply networks.
These are important times, important issues and important decisions for people to make – and we want to provide platforms that can help take community energy to the masses.
3. Could you share a customer/user that benefits from what you offer? What has your service done for them?
LO: We have many projects around the world with independent communities like the Brooklyn Microgrid in New York and global utilities and corporate entities including Direct Energy (USA), Centrica (UK) and Marubeni (Japan).
The timing of their growth towards commercial viability depends on where they are and how much change in regulation is needed to enable some of the core features of transactive energy to happen.
In Australia, we have just completed a one-year project with the Latrobe Valley Microgrid, which delivered exceptional results and proved Local Energy Markets will deliver benefits for consumers, prosumers and utilities.
Our commercial product is coming soon and we are working with utilities and independent communities around the world to create local energy markets that reap the benefits of distributed energy resources.
Our main customers are utilities looking to establish themselves in the new energy economy by integrating DERs into their renewable energy mix and also network operators looking to use DERs to balance the grid.
We also expect the results from Australia will encourage consumers to ask regulators around the world to open up ‘regulatory sandboxes’ that will allow communities to use our technology to take control of their energy.
4. What other blockchain use cases in the energy industry are you excited about?
LO: It is not so much blockchain use cases but more emerging technologies in energy that can integrate with our blockchain that we’re excited about – like batteries, thermal storage, demand response, smart EV charging.
Renewable resources are intermittent so you need a way to balance the grid at the grid edge and all these are solutions, but they need a way to be integrated in the system.
Local energy networks make that happen and our blockchain platform can be the core of that. Only by making all these elements talk to each other can we genuinely power our communities from distributed generation.
5. Where will LO3 Energy be in 5 years?
LO: We plan to commercialize our product very soon, and the way companies in the energy industry are moving – and I mean both progressive current incumbents and new players – we envisage rapid adoption.
In five years’ time. Gosh. I think the energy industry will be a very, very different beast. I think DERs will be much more prevalent and, I hope, we will be providing utilities and consumers alike with a way for all to benefit.