Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers
The European energy transition increasingly requires flexibility to ensure reliable operation of the electricity system, making use of demand response, a promising concept. With technological advances in the fields of big data analysis and the internet of things, small- and medium-sized prosumers co...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2021-10-01
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| Series: | Energies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/1996-1073/14/21/7085 |
| _version_ | 1797512591852961792 |
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| author | Guntram Pressmair Christof Amann Klemens Leutgöb |
| author_facet | Guntram Pressmair Christof Amann Klemens Leutgöb |
| author_sort | Guntram Pressmair |
| collection | DOAJ |
| description | The European energy transition increasingly requires flexibility to ensure reliable operation of the electricity system, making use of demand response, a promising concept. With technological advances in the fields of big data analysis and the internet of things, small- and medium-sized prosumers could also provide flexibility services through aggregators. A lot of conceptual work has been conducted recently to formulate business models in this context, but their viability still remains unclear. In this paper, a quantitative validation is conducted of two business models that are frequently proposed in the scientific discussion. The aim of this work is to explore the economic limits of these business models and show under which conditions they can be profitable for small- and medium-sized prosumers. For this purpose, a multi-level contribution margin calculation for several scenarios, customer segments and target markets is conducted. The results show that the profitability for the participation of small loads is still very low under current market conditions. Especially for household consumers, transaction costs are too high to be covered by the revenues. Considering the quantitative results, in the future profitable business cases can only be expected for medium-sized tertiary consumers. |
| first_indexed | 2024-03-10T06:03:57Z |
| format | Article |
| id | doaj.art-b204a85b73c24f14a90997306729e1b2 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T06:03:57Z |
| publishDate | 2021-10-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-b204a85b73c24f14a90997306729e1b22023-11-22T20:43:17ZengMDPI AGEnergies1996-10732021-10-011421708510.3390/en14217085Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized ProsumersGuntram Pressmair0Christof Amann1Klemens Leutgöb2E7 Energy Innovation & Engineering, 1020 Vienna, AustriaE7 Energy Innovation & Engineering, 1020 Vienna, AustriaE7 Energy Innovation & Engineering, 1020 Vienna, AustriaThe European energy transition increasingly requires flexibility to ensure reliable operation of the electricity system, making use of demand response, a promising concept. With technological advances in the fields of big data analysis and the internet of things, small- and medium-sized prosumers could also provide flexibility services through aggregators. A lot of conceptual work has been conducted recently to formulate business models in this context, but their viability still remains unclear. In this paper, a quantitative validation is conducted of two business models that are frequently proposed in the scientific discussion. The aim of this work is to explore the economic limits of these business models and show under which conditions they can be profitable for small- and medium-sized prosumers. For this purpose, a multi-level contribution margin calculation for several scenarios, customer segments and target markets is conducted. The results show that the profitability for the participation of small loads is still very low under current market conditions. Especially for household consumers, transaction costs are too high to be covered by the revenues. Considering the quantitative results, in the future profitable business cases can only be expected for medium-sized tertiary consumers.https://www.mdpi.com/1996-1073/14/21/7085business modeldemand responseflexibilityprosumerseconomic assessment |
| spellingShingle | Guntram Pressmair Christof Amann Klemens Leutgöb Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers Energies business model demand response flexibility prosumers economic assessment |
| title | Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers |
| title_full | Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers |
| title_fullStr | Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers |
| title_full_unstemmed | Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers |
| title_short | Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers |
| title_sort | business models for demand response exploring the economic limits for small and medium sized prosumers |
| topic | business model demand response flexibility prosumers economic assessment |
| url | https://www.mdpi.com/1996-1073/14/21/7085 |
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