Lawrence Orsini - Founder & CIO, LO3 Energy

This is part 1 of a series of character profiles on clean energy innovators. I did this research in 2018 as an intern at the Environmental Defense Fund to support an extraordinary mentor, Dick Munson, in unmasking some of the unsung pioneers fighting climate change. I'll be posting my writing here, but you can find the final product on medium.

It's been more than a century since Edison squared off against Tesla and Westinghouse in the so-called 'War of the Currents', the lasting effects of which shaped the development of the modern electrical grid. Today, utility companies manage some of the largest infrastructure projects in the world.

Up until recently, consumers have not had much choice in opting into this centralized system. Utility companies cut a monolithic figure in an industry that still derives more than 80% of its capacity from coal, gas and nuclear energy sources in the United States.

But the times they are a-changin'.

The introduction of distributed energy resources, the bulk of which are renewable, poses a new set of challenges for aging utility grids that are unable to efficiently account for changing electrical load profiles.

Why do we continue to confine ourselves to these approaches? How else can we reconcile an increasingly diverse energy portfolio?

No doubt these were some of the questions that spurred Lawrence Orsini to create LO3 Energy in 2012.

Orsini got his start in the energy industry in 1999 working at Portland Energy Conservation (PECI), a non-profit that designs, implements and manages energy efficiency programs for clients ranging from Walmart to the U.S. Department of Energy.

While Orsini developed an understanding of how businesses navigate the regulatory environment, the energy industry continued to change around him.

Reduced costs of distributed generation are paving the way for the proliferation of microgrids. The mass hysteria that surrounds cryptocurrencies presents another opportunity in the form of blockchain technology.

The utility industry may soon undergo a paradigm shift, and Orsini's LO3 Energy is positioning itself to take a starring role in the budding distributed energy space.

Orsini's pioneering approach? Transactive energy.

[Utility companies] need to see technologies like blockchain and local microgrids as an opportunity, not a threat.

Microgrid technology is inherently independent of existing utility infrastructure, capable of operating autonomously in 'island mode'. Naturally, it's been widely adopted as backup grids for hospitals, shelters and government buildings that provide vital services during emergency power outages.

It also provides an avenue for prosumers to tap into local resources that are too small for traditional electric grids. LO3 leveraged this fact to develop the Brooklyn Microgrid (BMG), a project that gives local communities a choice over where their power comes from.

Prosumers in the BMG that invest in distributed energy (such as solar and wind) can sell excess power back to the community. After all, why rely on power transmitted from distant substations when you can buy it from your neighbor? Orsini recognized that energy generated by a solar panel on your roof is most efficiently consumed right there - in your local community. This cuts down on transmission losses and creates a local energy market tailored to the community's preferences.

To paraphrase LO3 Energy's Scott Kessler, technologies that reduce our carbon footprint are becoming readily available, but there has yet to be a good mechanism to incentivize them. A marketplace can accelerate the adoption of clean distributed energy more effectively than the typical grant or state funding.

While it's not Orsini's goal to dictate the sources that communities decide to derive their energy from, the Brooklyn Microgrid has demonstrated how such a model can promote renewable energy in this way.

However, the BMG isn't simply extending the sharing economy into the energy sector. Customers that wish to use a ride-sharing service still require the permission of an intermediary like Uber or Lyft. That isn't the role that LO3 Energy wants to play.

Orsini's vision of transactive energy is underpinned by blockchain technology. Used as a secure communications platform, it enables LO3 Energy to cut out the middle man. With peer-to-peer interactions possible, the BMG represents a truly decentralized marketplace.

We don’t have a problem producing energy, we have a problem making it into useful work.

With this success, LO3 Energy has gone on to pilot more projects in the U.S., Australia and Germany. In doing so, Orsini has revealed a driving focus on exergy - the thermodynamic concept linked with the useful work that can be extracted from a process.

LO3's EXERGY project shifts the focus from the production of energy to the production of work, by letting users securely access and share their efficiency data. Ultimately, this data can be used to finetune the community's electric grid.

Several roadblocks, many of which are policy-driven, continue to affect this growing business. But LO3 Energy has few competitors. Rather than challenging an established utility market, it's laying the foundations for entirely new ones by providing the requisite software and hardware to local communities.