LO3 Energy is to activate German neighborhoods with a new approach to the way renewable energy is bought and sold by testing the German market with two local partners, Karlsruhe Institute of Technology (KIT) in cooperation with local energy provider, EnergieSudwest, and Allgauer Uberlandwerk, in an effort to run ahead of a planned nationwide roll-out of microgrid technology for renewables.
Millions of homes and businesses across Germany currently benefit from solar panels fitted to their roofs but must sell the excess power back to the grid at a set price determined by the major utility firms. Solar users will have the opportunity to become ‘prosumers’ and sell their excess power to their closest neighbors.
 LO3 Energy
“For many of Germany’s early adopters of PV technology, who are reaching the expiration of the feed-in tariff, our platform can offer them a new way to receive the full benefit from their investment in renewables, while allowing energy consumers the choice to buy energy directly from their neighbors and community.  We think many participants will recognize that buying energy locally strengthens their community and the local economy,” said LO3 Energy’s CEO, Lawrence Orsini.
The test projects will be set up in Lazarettgarten in Landau, and in the Allgau region of Southern Germany, that follows the successful development of a US-based microgrid in Brooklyn, New York.
The Lazarettgarten microgrid, which will be established in a 3.8-hectare community with 130 residences and 19 businesses, is backed by EnergieSudwest, co-owned by Enovos and the City of Landau.
As part of the project, they plan to install additional solar PV and battery storage in the area and integrate it with existing supplies, with LO3 setting up the local microgrid to open up a local transactive energy market.
“The German energy transition is a mammoth task,” said Dr. Thomas Wassmuth from EnergieSudwest AG, who supports the implementation of the research project. “We want to provide our customers with the possibility to support it here in their community.”
With the help of the generated data from the participants of the field test, the researchers of KIT will know in detail how much electricity was consumed and traded in the Landau Microgrid and how the electricity price developed. Subsequently, the market model will be analyzed, adapted and further developed.
“For the future of energy markets there are many uncertainties,” said Prof. Christof Weinhardt of the Institute of Information Systems and Marketing at KIT and references the possible expiration of the feed-in tariff for renewable energies. “We need to simulate markets already today, to develop them for the future.”
The project in Allgau, which is in partnership with Allgauer Uberlandwerk GmbH, will initially be a short-run proof of concept, with some prosumers selected to participate in a ’virtual microgrid’ for three months.
“The key challenges for today’s energy market are decentralization, decarbonization and digitization. With their deep understanding of blockchain technology for the energy market and profound experience, we are very happy that LO3-Energy will be our partner for this exciting project,” said Michael Lucke, CEO Allgauer Uberlandwerk GmbH.
Both projects aim to demonstrate how distributed energy and microgrids can fit into the existing networks and establish how interested consumers are in knowing their energy origin and paying for clean local energy.
LO3 Energy has already proven its transactive energy concept in the United States through the development of the highly successful Brooklyn community microgrid.
Last year, the project saw LO3 work with local regulators on its integration, and with residents and businesses to encourage adoption and evaluate the way they interact with the system.
The Lazarettgarten Transactive Microgrid marks the next step in a global rollout of LO3’s blockchain technology that will act as a case study on how similar projects can work across Europe and the world.
Once the project is set up, the prosumers will define pricing and usage while LO3 and its partners will work to develop innovative ways to maximize their energy efficiency through time-of-use rates and energy mixes.
This concept will also demonstrate how existing regulations can be revised to manage the integration of these microgrids and determine the changes required to run similar markets across Europe.
The Karlsruhe Institute of Technology was engaged to undertake a rigorous evaluation of the project, which will review its impact on the electricity grid, electricity prices, and consumer satisfaction.
 “We look forward to seeing the results of the KIT study and the feedback from the users and utilities engaged from these two German microgrids,” Orsini said.