A holistic view on business model-oriented energy communities

Abstract

Purpose

This paper aims to investigate and formulate several business models (BM) for various energy communities (EC) members: prosumers, storage facilities, electric vehicle (EV) charging stations, aggregators and local markets.

Design/methodology/approach

One of the flexibility drivers is triggered by avoiding the cost and maximizing value that consists of delivering a service such as increasing generation or reducing consumption when it is valued most. The transition to greener economies led to the emergence of aggregators that aggregate bits of flexibility and handle the interest of their providers, e.g. small entities such as consumers, prosumers and other small service providers. On one hand, the research method consists of formulating six BM and implementing a BM that includes several consumers and an aggregator, namely, scheduling the household electricity consumption (downstream) and using flexibility to obtain revenue or avoid the cost. This is usually performed by reducing or shifting the consumption from peak to off-peak hours when the energy is cheaper. Thus, the role of aggregators in EC is significant as they intermediate small-scale energy threads and large entities' requirements, such as grid operators or retailers. On the other hand, in the proposed BM, the aggregators' strategy (upstream) will be to minimize the cost of electricity procurement using consumers’ flexibility. They set up markets to buy flexibility that is valued as long as their costs are reduced.

Findings

Interesting insights are revealed, such as when the flexibility price doubles, the deficit coverage increases from 62% to 91% and both parties, consumers and retailers obtain financial benefits from the local market.

Research limitations/implications

One of the limitations of using the potential of flexibility is related to the high costs that are necessary to implement direct load control. Another issue is related to the data privacy aspects related to the breakdown of electricity consumption. Furthermore, data availability for scientific research is limited. However, this study expects that new BM for various EC members will emerge in the future largely depending on Information Communications and Technology developments.

Practical implications

An implementation of a local flexibility market (LFM) using 114 apartments with flexible loads is proposed, demonstrating the gains obtained from trading flexibility. For LFM simulation, this study considers exemplifying a BM using 114 apartments located in a multi-apartment building representing a small urban EC situated in the New England region in North America. Open data recorded in 2016 is provided by UMassTraceRepository.

Originality/value

As a novelty, six BM are proposed considering a bottom-up approach and including various EC members.

Citation

Bâra, A. and Oprea, S.V. (2023), "A holistic view on business model-oriented energy communities", Kybernetes, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/K-07-2023-1235