Business models selected for research
The business models selected focus on DER aggregation and the provision of balancing service: this choice relies on the finding that massive DER integration will require aggregation both on a technical and economical standpoint.
Amongst the possible streams of revenues that DER can initiate beyond the direct electricity trading, those connected to the balancing activities are the most promising ones on short term, because few or no other ancillary service is yet possible.
The three business ideas investigated are:
- Business model I: Aggregating commercial and industrial demand response to balance intermittent generation
- Business model II: Integrating residential scale flexible Micro-CHP into electricity markets
- Business model III: Leveraging on the flexibility of aggregated CHP units and demand response to extend the conventional Energy Service Company business
Coverage of the business models
- DER technologies considered : intermittent renewable energy sources, Combined Heat and Power, flexible demand.
- Market segment / unitsize considered : Residential customers (small size), Commercial customers (small to medium size) and Industrial customers (medium to large).
- Types of companies investigated to implement DER aggregation : electricity suppliers, energy suppliers (electricity and gas) and Energy Services Companies (ESCO).
RES + Flexible demand
Medium Commercial + Industrial
CHP + Flexible demand
In terms of time horizon and level or risk, Business model I could become operational in the short term, Business model III is the extension of an existing ESCo business to new emerging services, and Business model II is a more long term and risky case. This enables studying DER aggregation development both for “today” and “tomorrow”.
With regards to geographical and regulatory/market contexts, the three business models were analysed in five different countries each: the UK, Germany, Greece, Spain and France.
Click here for an overview of the methodology for business modelling.