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Economics of Pooling Small Local Electricity Prosumers—Prosumer vs Business as Usual Approach

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Peter Kaestel at Centre for Alternative Technology
Peter Kaestel
Bryce Gilroy-Scott at Centre for Alternative Technology
Bryce Gilroy-Scott
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This paper analyses the economics of pooling small UK based local electricity prosumers with back-up access to the National Grid and compares it to the current conventional UK electricity supply model—business as usual (BAU) approach. This is contextualized against the UK energy market framework, prosumer research and changing energy market dynamics. For the economic assessment a three-tiered production/supply and consumption model is developed based on site specific levelized cost of electricity (LCOE) and other cost parameter to operate the model. Modeling results indicated the economic feasibility and advantage of a prosumer approach in a significant number of modeling scenarios. Additionally, a break-even analysis for the two approach-es was undertaken to understand the sensitivity of individual input parameters. Keywords: Energy-Prosumer, Decentralized Energy, Economics, LCOE
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... The researchers who performed RES system value evaluation focused on the peak shaving capability of prosumers with energy storage systems (ESS) and prosumers' self-sufficiency and on the electric vehicles as auxiliary services suppliers to the power system (Gudmunds et al., 2020;Sołtysik et al., 2021). The authors (Grzanic et al., 2022;Child et al., 2020;Couder, 2015); discussed the prosumer aggregation issues and, particularly, photovoltaics (Walch and Rüdisüli, 2023); household prosumers (Camargo et al., 2018;Colmenar-Santos et al., 2012); energy communities, microgrids (Hu and Chuang, 2023); market participation, decentralization and local models (Parra-Domínguez et al., 2023;Kästel and Gilroy-Scott, 2018); prosumers on biomass (Volpe et al., 2022). Cost-benefit issues of RES and prosumers-related energy technologies analysis (LCOE, profitability, investments) are performed by (Tran and Smith, 2018), who incorporated the sensitivity and uncertainty analysis into LCOE calculations, and (Kurbatova et al., 2023), who discovered the prosumers development trends based on LCOE dynamics. ...
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... The limitation is that these hybrid systems lock-in natural gas to provide heating and some electricity and can only provide marginal GHG reductions, so they are inferior technical solutions from a climate perspective than the PV+HP systems investigated here. This is not to say there are not integration solutions-community energy systems with high penetration rates of heat pumps can economically integrate high levels of PV using a combination of demand response, storage, and curtailment [96,97]. Realizing these solutions require novel policies and business models, in concert, developed around distributed generation as opposed to the legacy model of centralized generation and one-way power flow [98]. ...
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Article
Full-text available
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Article
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