Can the ‘Uber of energy’ prevent another citywide blackout?
Emerging tech company Brooklyn Microgrid hopes to shake up the Con Edison status quo by using solar power.
On a Sunday evening during the summer’s first major heatwave last July, Con Edison cut off power to more than 30,000 southeast Brooklyn residents. The company, citing a new regional power usage record set earlier that day, called the action a “preemptive move” that was set in motion to “protect the integrity of the energy system.”
Many in the area were upset about the utility-induced blackout, which for some stretched into a second day, and questioned why their specific neighborhood was targeted. The incident also led to a hearing where Con Edison President Timothy Cawley was forced to defend the company at the behest of state legislators.
One emerging tech company in Brooklyn believes it can help keep such circumstances from unfolding, while generating new income streams for environmentally conscious homeowners and making the city’s energy supply greener. A pivotal meeting with state officials on Friday could pave the way.
Described by executive director Adrienne Smith as “the Uber version of energy,” the Brooklyn Microgrid has built app-based technology to create a local, digital marketplace for solar power. On one side of a transaction: homeowners with solar panels, who produce extra energy they do not utilize. On the other side: their neighbors.
These “prosumers” (those with solar panels, producing the electricity) would be able to sell the excess power to the highest-bidding consumers in their area via the Brooklyn Microgrid’s “Pando” app. Con Edison would also be plugged into Pando, channeling the purchased power through its infrastructure.
Smith says the Brooklyn Microgrid provides a green solution to Con Edison’s grid problems, which were on display over the summer and during several other blackouts in recent memory. The virtual marketplace model lightens the load on the utility’s infrastructure, while providing residents the opportunity to buy renewable energy at a lower rate than what Con Edison charges for its power, according to Smith. The revenue that solar-panel investors generate from sales could be used to pay off installation and maintenance costs for the machinery.
Gov. Andrew Cuomo announced in April the state’s third annual solicitation for large-scale renewable energy projects, which he called in a statement “a critical part of the state’s bold plan to meet the unprecedented challenges posed by climate change.”
Smith and some of her Brooklyn Microgrid team members will pitch their business model on Friday to some of Cuomo’s top officials.
Only state-approved energy providers can sell electricity in New York, but the Brooklyn Microgrid is seeking a temporary lift of such restrictions. The exemption, called a “regulatory sandbox,” would allow the company to launch a pilot program in Park Slope, Borough Park and Bay Ridge, with hopes that its success will open the door for permanent approval and, eventually, a broadening of their services across the city.
“Everything’s ready to go right now,” Smith told the Brooklyn Eagle. “It’s just these archaic rules and regulations, which served their purpose during their time, but climate change has occurred, technology has developed, and we are in a position where we can have locally generated solar energy produced and sold right here in Brooklyn.”
Smith told the Eagle about one of the Brooklyn Microgrid’s prospective energy producers, who, when he has excess power generated from his solar panels, is mandated to sell it to Con Edison for 4 cents per kilowatt hour — a common measurement of energy used. When his solar panels don’t produce enough energy to power his brownstone and he has to tap into the Con Edison grid, he’s paying the utility approximately 20 cents per kilowatt hour.
“If there were a free marketplace, that prosumer would be able to sell his energy at a much higher rate than 4 cents a kilowatt hour,” Smith said.
The Brooklyn Microgrid’s parent company, LO3 Energy, recently released a report after analyzing data from a similar setup in Australia. “The results of the project showed users saved 6-12 percent on their energy bills,” a press release said, “while prosumers who bought energy but also generated and sold it with their own private solar panels, could generate 18-37 percent more revenue from their energy sales.”
If able to launch its program, the Brooklyn Microgrid would get a cut of any transaction between the buyers and sellers plugged into the Pando app. So would Con Edison, which, according to Smith, would not suffer any revenue hit from the partnership. If anything, she said, the company stands to benefit financially. Because the Brooklyn Microgrid would be using Con Edison infrastructure to move the power from the solar power producers to their neighboring consumers, the Brooklyn Microgrid would award Con Edison a percentage of the fee agreed upon between the two parties. In a similar program established in Vermont this week, LO3 Energy has arranged a 5 percent transaction fee for the local energy provider Green Mountain Power.
“The added benefit is that now their grid will become more resilient, because now we’re incentivizing more people to put solar panels on their roofs,” Smith said of Con Edison in the possible New York scenario. “That’s less energy that [residents are] drawing from Con Edison’s grid.”
Smith, who took over as executive director for the Brooklyn Microgrid in July, told the Eagle that the company has had limited engagement with Con Edison up until this point. Without regulatory approval there wasn’t much need for it, she said. As far as she could tell, Con Edison had historically shown some openness to a partnership, but, more recently, interest may have cooled.
“I think it’s just a matter of time, honestly,” she said. “When you have a company that’s operated for over 100 years, they may see something as a solution, but there’s still a lot of internal dialogue and discussions that need to occur before an action can take place.”
Con Edison representative Allan Drury wrote in an email to the Eagle that the company “encourage[s] our customers to consider solar energy.” He noted that Con Edison Inc., the utility’s parent company, is “the second largest solar provider in North America” and is committed “to a cleaner energy future,” as evidenced by its carbon-footprint reduction of 49 percent over the past 14 years.
(According to a 2017 New York Times article, less than a quarter of the electricity produced in New York State, across all providers, including Con Edison, comes from renewable sources. Con Edison’s website only vaguely mentions its reliance on nonrenewable energy sources, saying the electricity the company provides comes “from all over New York, whether it’s from solar, wind, or generating stations.”)
On the topic of the Brooklyn Microgrid, Drury said Con Edison feels the company should operate under the same rules as other competitive, state-approved energy suppliers, some of which also use Con Edison infrastructure to deliver energy.
When Con Edison acquires energy, including renewable energy, Drury wrote, “We employ a variety of buying strategies to get the best price for the customer. We then pass that energy along to the customer at cost. We don’t make OR lose money on the commodity. When the price of the energy goes up, the end customer pays more. When it goes down, the end customer benefits.”
But the Brooklyn Microgrid doesn’t see itself as a commodity provider like those Con Edison has dealt with before. The company wouldn’t generate any energy; the people would.
Should the regulatory sandbox be approved, and the Brooklyn Microgrid open for business, Smith says that about 40 producers and 200 consumers will be ready to make deals. A Change.org petition for the regulatory sandbox netted more than 500 signatures. Smith will present the petition at the meeting Friday, with some eager Brooklynite “prosumers” also attending in a show of support.
“I think I think it’s going to go well,” Smith said. “I’m envisioning it as being Brooklyn residents having a chance to use their own voices to really speak from their perspective as to why this is important and why it needs to happen now … I think that’s what’s really important.”