The evolution of smart cities is heavily dependent on green energy. Although the cost of renewable energy has been decreasing continuously, the challenge of energy availability remains a major hurdle. Bitcoin-based blockchain technology offers innovative solutions for green energy, supporting the development of smart grids and bringing energy production closer to end users. Could blockchain become the preferred choice for renewable energy and smart grid systems in the future?
This edition of DirectIndustry e-magazine explores three green energy platform solutions powered by blockchain technology.
In November 2017, a report from Lazard Investment Bank revealed that renewable energy prices have reached historically low levels, sometimes even undercutting hydropower. Over the past four years, large-scale solar power costs have dropped by 36%, with prices now ranging between $46 and $53 per megawatt-hour—lower than traditional thermal power at around $60. However, price is just one of many challenges in the green energy sector. The intermittent nature of wind and solar power, combined with the distance between generation sites and consumption centers, continues to complicate energy distribution.
**01 Microgrid**
At the end of 2016, Siemens, a global engineering leader, partnered with U.S. startup LO3 Energy to develop an energy trading network using blockchain technology. Since April 2016, LO3 has enabled Brooklyn residents to connect their rooftop Solar Panels to microgrids, allowing them to buy and sell electricity within the network. Blockchain ensures transparent and tamper-proof data sharing, enabling those without solar panels to also access electricity through the system.
Scott Kessler, Director of Business Development at LO3, explained that blockchain’s ability to record transactions allows small producers and consumers to adjust their electricity buying and selling in real time based on their generation and consumption patterns. Solar panels or other energy generation equipment can be integrated into the microgrid.
“We are developing power trading platforms specifically for microgrid equipment,†Kessler said. “We believe blockchain is the most effective communication protocol for these platforms.â€
He added that traditional grid management relies on centralized control systems, which collect and analyze data before sending instructions to edge devices. In contrast, blockchain’s decentralized structure allows all network participants to access and manage data freely. This enables real-time grid operations across multiple devices. Kessler believes this technological shift is transforming the electricity grid, encouraging more localized energy production and consumption.
Currently, small-scale producers can benefit from wholesale electricity rates and may also qualify for environmental incentives. This model reduces long-distance transmission, making local energy supply more efficient and accessible.
**02 Local Energy Closed Loop**
LO3 Energy isn’t the only company leveraging blockchain for green energy transformation. Greenflex, a French energy giant, is collaborating with BlockchainPartner to explore the concept of a “local energy closed loop.†Lucas Elicegui, Greenflex’s Chief Innovation Officer, explained to DirectIndustry that future energy management will be increasingly localized.
“Right now, only a few local producers must decide in advance whether to produce electricity for themselves or for others,†he said. “If homes and offices are equipped with solar panels, they often have different energy needs throughout the day. It makes sense to sell surplus power directly to the local grid rather than re-introducing it to the national grid.â€
For both local generators and consumers, this approach creates a win-win scenario. Generators earn more from the local market, while consumers enjoy lower electricity prices. Blockchain records track the amount of electricity produced over time and the agreed-upon prices for local purchases, all managed through automated programs.
Greenflex and BlockchainPartner aim to launch a prototype trading platform by the end of the year. These models are designed to reshape the green energy economy and attract investment. Another company is also exploring how blockchain can streamline financing for renewable energy projects.
**03 Token System**
Lithuanian startup WePower introduces a novel approach: developers of new energy projects can sell green energy “tokens†to buyers before constructing large-scale power plants. This blockchain-based token system provides project developers with new funding opportunities and offers buyers discounted electricity prices.
Commercial customers can purchase “tokens†in advance to secure future energy rights and reduce electricity costs. ArtÅ«ras AsakaviÄius, CEO of WePower, told DirectIndustry that due to the removal of subsidies for renewables, banks often require higher upfront capital for new projects. WePower’s system offers an alternative source of funding, helping commercial customers meet their green energy commitments.
WePower has already secured its first customer for a 1,000 MW solar project. The company plans to launch its token system platform next year, further expanding the role of blockchain in the renewable energy sector.
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