The story this spring popped off the page of the New York Times, chronicling the emergence of a hardy band forging the Brooklyn Microgid. A startup, LO3 Energy, is working mightily to get it off the ground. The Energy Times this week talked with Lawrence Orsini, LO3 chief executive, about the project and changes looming over electricity markets. He will keynote the Empowering Customers & Cities conference November 7-8 in Chicago. This is the first of a two-part series. Next up: Dead Star Utilities. Orsini’s comments, edited for clarity and style, follow.
ENERGY TIMES: What are you focused on at LO3?
ORSINI: We are pursuing the creation of virtual and physical microgrids. We’re going to enable the transactive energy control of virtual microgrids and physical microgrids. The Brooklyn Microgrid is one project. We have a number of projects in Australia, Germany, the UK, and a couple more here in the United States. At this point, what we really intend to do is test business models and see what resonates. We are looking at people having different ways to participate in energy. To this point, you really haven’t got a lot of things that you could choose to do related to energy. But that’s changing pretty quickly.
ENERGY TIMES: So what is LO3, how many people are involved, when did you launch it?
ORSINI: LO3 was launched about 2012. We spent the first two years tracking the trends in the market. My background includes working with utility scale, energy efficiency, demand/response and emerging technology programs. We have been working with some of the largest utilities in the United States launching programs to help bring new technology to markets and to figure out how people work with emerging tech. It became pretty clear probably around 2010 to 2012 that the market was shifting rapidly. Distributed generation was really taking hold a lot faster than anybody was predicting. There’s going to be a real stretch for this market to adopt new business models. In 2012, LO3 started looking into those new business models. We spent about 1 ½ years looking at platforms for transactive energy. There’s a lot of work that we’re doing on getting data out of data centers and into buildings where the energy is used. We’re about 30 fulltime employees. Nobody works for LO3; we’re all consultants to LO3 at this point. That will be changing shortly.
ENERGY TIMES: What does LO3 stand for?
ORSINI: That’s interesting. I had dated a woman who was a San Francisco television newscaster. Before a newscast it was chaos. As soon as the show is ready to start, the executive producer would yell out ‘okay everybody, live on 3 – 2 – 1’. So LO3 really means it’s time for the chaos to stop and for things to get focused. That’s what LO3’s about. The energy market is ready to lose this chaos, to really have some focus on what the new business models for the future of energy are. It’s not monopoly utilities anymore.
ENERGY TIMES: What is the status of the Brooklyn Microgrid?
ORSINI: Today in Brooklyn we have about 60 prosumers who own primarily photovoltaics but also wind and combined heat and power units. Meters are installed, data streams into the platform. A virtual market is happening. We have about 800 consumers that are ready to either buy or sell energy as soon as we’re ready to allow them to. We’re in the last stages of conversations with the regulators in New York. We spent a fair amount of time going back and forth fitting pretty well into the existing regulatory framework. But there’s some really strong interest by some of the regulators and policy makers here to push a little bit further. So we’ve been figuring out how to push that realistically within the existing policy framework with timelines that actually work for a business.
ENERGY TIMES: So in New York, the policy framework has been set by the REV or Reforming the Energy Vision initiative. Could you be in any state in the country?
ORSINI: We could fit pretty well into New York, Texas, and California. There’s pretty progressive policy there. We could still fit within most of the states staying within the existing policy but it’s going to work much better in those three states early on. Most of the policy leadership in the United States is going to come from Texas, New York, and California. So those are the places to be.
ENERGY TIMES: Those three states span the political spectrum, conservative to liberal.
ORSINI: Completely. The platform doesn’t care about politics, it cares about choice. Keep your politics your own, this is just providing you the choice to decide what sort of fuel sources you want to support; whether or not you can trade megawatt to megawatt directly in a market. It has nothing to do with partisan politics. It has everything to do with technology and running energy markets.
ENERGY TIMES: So these 800 folks ready to sign on for Brooklyn Microgrid – how will they be served?
ORSINI: Folks will actually be buying from the Brooklyn Microgrid. It has got its own separate benefits corporation here in the community that’s meant to be largely community-owned at the end of the day. So they’ll be buying from Brooklyn Microgrid Benefits Corp. and selling services on a platform. Brooklyn Microgrid will procure the energy needed by the customers.