New Study: Empowering Local Electricity Markets

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New Study: Empowering Local Electricity Markets

A survey study from Switzerland, Norway, Spain and Germany

Greater integration of renewable energy sources constitutes a key priority for successfully achieving agreed-upon climate goal targets. Nuclear phase out, decentralization of supply, liberalization, digital technological innovations, and the sharing economy are only some of the key issues that the energy industry is facing in the coming decade. Notwithstanding some of the associated challenges, a number of tremendous opportunities are also arising, and success can be achieved by introducing radically new business models. We are entering a period of so-called ‘platform revolution’: Platforms connect buyers and sellers in a virtual marketplace. Given the successful growth of platforms like Uber and Airbnb, it is difficult to ignore their disruptive potential for incumbent industries. This study uncovers the drivers of and barriers to developing platform solutions in the electricity market, notably ‘local electricity markets’. In local electricity markets, customers are empowered. They are connected through platforms. They actively participate in the marketplace by selling excess electricity that is produced locally using their own renewable sources, and by buying electricity that is locally produced. Consumers thus have the opportunity not only to consume, but also to produce electricity and to sell it in local markets, thereby, becoming prosumers! Local electricity markets constitute one of the most radical transformations, as they involve integrating renewable energy and selling it at the source. The agenda for empowering consumers and prosumers in such a local marketplace is long and challenging. It requires an adjustment of product and service offerings to better reflect existing and prospective consumer and prosumer needs. Putting existing and prospective consumers and prosumers center-stage is a critical step, if local electricity markets are to be a successful, forward-looking and sustainable solution. We firmly believe that the insights gained from this survey - which was conducted in four countries (Switzerland, Norway, Spain and Germany) - can be shared and acted upon by industry participants, consultants and citizens. The study was conducted by team members of the University of St. Gallen’s Good Energies Chair for Management of renewable energies, within the scope of the EU Horizon 2020 EMPOWER project (www.empowerh2020.eu).