Energy Paradigm shift by implementing decentralized communities: A Case Study of the Brooklyn Microgrid

Brooklyn Microgrid (BMG)[1] is a pilot project based-on Blockchain technology. In this blockchain-based project, citizens can buy and sell locally produced solar PV power from one another. The project started in early 2015, and in April 2016 the first community activity took place when three residents of President Street in Park Slope participated in the first ever peer-to-peer (P2P) energy transactions. Now neighbours can go to an app and say how much they are willing to spend on solar panels and they can find other neighbours who are producing energy.

The BMG project, run by LO3 Energy[2], consists of a microgrid energy market in Brooklyn, New York. Currently, participants in the BMG are located across three distribution grid networks in the BMG’s region(refer figure below).

Micro grid connects participants from three distribution grids: the Borough Hall (red), the Park Slope (green), and the Bay Ridge (purple) network.
Fig 1: The BMG connects participants from three distribution grids: the Borough Hall (red), the Park Slope (green), and the Bay Ridge (purple) network.

Severe weather events (e.g. hurricanes, heat waves, etc.) have raised operation issues of the already outdated electrical grids in Brooklyn. A physical microgrid can reduce the impact of grid issues through complete decoupling and control the energy supply within the community[3]. Furthermore, the electrical grid already struggles to accommodate the growing amount of renewable generation (mostly residential residential solar PV) and the characteristics of new appliances (e.g. electric vehicles or energy storage systems). The area of the BMG is especially vulnerable to grid failures as its rate of electric capacity utilization already approaches its limits.

A new-unique micro grid solution

The BMG addresses these challenges and provides a local energy market on which community members can trade (locally generated) energy P2P with their neighbors. The project consists of two main components:

  1. The virtual community energy market platform: This platform provides the technical infrastructure for the local electricity market. It is based on a private blockchain using the Tendermint protocol. Tendermint Core is a low-level protocol which is actually composed of two protocols in one: a consensus algorithm and a P2P networking protocol. The TransActive architecture and TransActive Grid smart meter are installed, in addition to the analogue meter. Thus, measurements of the TransActive Grid meter can be verified by the analogous meter during the early project stages.
Fig 2: Installation of a TransActive Grid smart meter (a) next to the distribution box (b), existing (analogue) utility meter (c) and the domestic fuse box (d).
Fig 2: Installation of a TransActive Grid smart meter (a) next to the distribution box (b), existing (analogue) utility meter (c) and the domestic fuse box (d).
  1. The physical microgrid: An electrical microgrid is built in addition to the existing distribution grid. The physical microgrid acts as a back-up to prevent power outages. By uncoupling from the traditional grid, it can operate in island mode. Then, critical facilities (e.g. hospitals) receive energy at fixed rates. Residences and businesses have to bid on the microgrid’s remaining power. The physical microgrid currently comprises 10-by-10 housing blocks and will be extended.

How does it work

It is interesting to note that the physical microgrid is only a part of the grid infrastructure that the BMG uses. Majorly, the BMG uses the traditional grid run by the independent system operator, Con Edison, Inc., to supply the physical energy flow and only decouples the physical microgrid in emergency situations. While all energy flows occur on the grid infrastructure, information is transferred over the virtual layer. Thus, consumption and generation data is transferred from the participants’ Transactive Grid smart meters to their blockchain accounts. 

Buy and ask orders are created according to this information, and orders are sent to the trading platform that is sustained by a smart contract. Once the matching is completed, payment is carried out and a new block is added to the blockchain(To know more about blockchain, click here). This block includes all current market information. The required information (i.e. conducted transactions) is also sent to the involved agents via their blockchain accounts.


The success of the BMG project aims at supporting the systematic introduction of community microgrids. It is currently providing local and hyper-local energy (energy from the surrounding area) to the community, actively increasing local generation and building the physical microgrid. A preliminary three-month trial run of P2P transactions between two participants was conducted in which the required regulatory and legal changes are investigated. The BMG also plans to offer ancillary services within the physical microgrid.

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[3]: Mengelkamp, E., Gärttner, J., Rock, K., Kessler, S., Orsini, L., & Weinhardt, C. (2018). Designing microgrid energy markets. Applied Energy, 210, 870–880. doi:10.1016/j.apenergy.2017.06.054