More and more energy consumers are also becoming producers of the energy they consume, becoming “prosumers”. But they are not yet the norm. How does one become a prosumer? What are the existing models? How much potential do these different models have?
This article reviews the state of play of the main stakeholders and best practices to inform and boost people, communities, and other relevant stakeholders to engage in prosumerism.
Prosumers are becoming increasingly important in stimulating the renewable, decentralised, carbon-free energy needed to meet Europe's climate neutrality goals. The Horizon 2020 PROSEU project demonstrated that in 2050, 89% of generated electricity could be provided by prosumer technologies in the residential sector. With the Clean Energy for All package, the European Union recognises the right of consumers to be active (Article 15, Internal market for electricity Directive 2019/944): they can store, sell and consume the electricity they produce either individually or collectively, and their flexibility may be valued, for example through demand response or energy efficiency programmes.
A WIDE RANGE OF MODELS
Many prosumer business models have emerged over the last years, boosted by market, local or community strategies. Many prosumer models exist, including small or big businesses and households equipped with solar panels, storage, vehicle-to-grid injections, or opting for a “plunge pricing tariff” (when a supplier would pay its customers to take excess energy off the grid) or demand-side flexibility. The potential value for people and the planet is huge. For instance, balcony solar panel may potentially cut household utility bills by 25% over 20 years and significantly help people in energy poverty.
One of the most popular models is collective self-consumption through citizens and renewable energy communities, i.e. groups of users who jointly produce, consume and manage the energy produced in local community-owned facilities. Research conducted by the EU-funded REScoopVPP showed that up to 98 million EU citizens could become prosumers by 2050 by joining an energy community.
THE BENEFITS OF THE COMMUNITY MODEL
Community models have demonstrated a wide range of positive impacts at the environmental and social levels. They imply a direct participation of the citizens in the decision-making required for project implementation and governance processes. Many deliver value at the local levels beyond energy – for instance, they create more social cohesion within a community, and help address energy poverty.
Local and renewable energy communities span a wide range of projects – from district heating to hydropower. Some are even developing their own offshore wind power production, following the lead of Middelgrunden (DK), where direct citizen participation enabled to overcome the “Not in my backyard” (“NIMBY”) phenomenon and increased the social acceptance of the project.
FLEXIBILITY IS POWER
Demand-side flexibility, i.e. adapting the electricity consumption to production, price signals or market incentives, is widespread in industrial settings. Still, it has only started to gain interest among and towards private individuals. Though, for the European Commission, households represent the most significant flexibility potential. Flexibility allows better management of the network and greater use of electricity from renewable sources. At the same time, smart technologies and storage measures enable consumers to tap into this potential without sacrificing comfort.
One of the most promising tools are aggregators. These are people, companies or technologies that modulate the electricity consumption of a group of consumers according to total electricity demand on the grid. They can even be designed and implemented by energy communities, as demonstrated by the FlexCoop project.
Flexibility and prosumerism make sense to reach European’s decarbonisation objectives and contain energy prices. It is also increasingly relevant for developing countries too. In LEAP-RE, a project financed by the EU, the EURICA consortium is demonstrating the value of automated demand-side response in the city of Ouagadougou (Burkina Faso) to avoid shortages and ensure overall better quality of the supply.
Flexible assets in homes. (Source: Yule-Bennett, S., & Sunderland, L.. The joy of flex: Embracing household demand-side flexibility as a power system resource for Europe. Regulatory Assistance Project - June 2022)
- Yule-Bennett, S., & Sunderland, L.. The joy of flex: Embracing household demand-side flexibility as a power system resource for Europe. Regulatory Assistance Project (June 2022)
- European Commission, Directorate-General for Energy, Antretter, M., Klobasa, M., Kühnbach, M., et al., Digitalisation of energy flexibility, Publications Office of the European Union, 2022
- RESCoop, Flexibility Services For Energy Cooperatives - An overview of possible flexibility-based services using residential equipment control (28/01/2021)
- BEUC, Fit for the consumer? Do’s and dont’s of flexible electricity contracts (2019)
About the author:
Marine Cornelis is the executive director and founder of Next Energy Consumer, a policy consultancy focused on the social aspects of the energy and climate transitions. Her work bridges the needs and experience of civil society, scientific communities, businesses, and policymakers. Her commitment enabled Marine to be appointed one of the first ambassadors of the European Climate Pact.
Disclaimer: This article is a contribution from a partner. All rights reserved.
Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of the information in the article. The opinions expressed are those of the author(s) only and should not be considered as representative of the European Commission’s official position.
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