End-User Flexibility in the Local Electricity Grid – Blurring the Vertical Separation of Market and Monopoly?

In the Norwegian electricity system, new consumption patterns and changing load profiles increase an already apparent need for reinvestment in the aging network infrastructure. This is very costly, and network operators consider alternative ways of increasing capacity, which are less costly and more flexible. One such option is end-user flexibility. In the paper, we give an overview of the Norwegian electricity market and regulation and the potential of end-user flexibility. We present an investment case provided by a network company, which illustrates that the choice of compensation method to customers have a large impact on the cost and/or revenue cap in the regulatory model. By issuing direct payments for flexibility services, end-user flexibility results in a lower efficiency, although the revenue cap may be higher, while redistribution of network tariffs have a marginal effect on efficiency and the revenue cap. Through redistribution of network tariffs, the network operator can defer investments without a notable change in the revenue cap or change in efficiency. This highlights some of the future challenges that the regulator faces in setting a regulatory framework for end-user flexibility and it challenges the vertical separation that has been a corner stone in the deregulated electricity market

Business model innovation in electricity supply markets: The role of complex value in the United Kingdom

This research investigates the new opportunities that business model innovations are creating in electricity supply markets at the sub-national scale. These local supply business models can offer significant benefits to the electricity system, but also generate economic, social, and environmental values that are not well accounted for in current policy or regulation. This paper uses the UK electricity supply market to investigate new business models which rely on more complex value propositions than the incumbent utility model. Nine archetypal local supply business models are identified and their value propositions, value capture methods, and barriers to market entry are analysed. This analysis defines 'complex value' as a key concept in understanding business model innovation in the energy sector. The process of complex value identification poses a challenge to energy researchers, commercial firms and policymakers in liberalised markets; to investigate the opportunities for system efficiency and diverse outcomes that new supplier business models can offer to the electricity system

Intermediation in Future Energy Markets: Innovative Product Design and Pricing

In order to mitigate the impacts of climate change, the international community envisages significant investments in electricity generation from renewable energy sources (RES). The integration of this decentralized and fluctuating type electricity generation poses several challenges to planning, operation, and economics of power systems. The established energy systems were originally designed for a centralized electricity generation that follows the uncontrolled but well predictable demand. However, for large shares of RES, relying only on the flexibility of the generation side would be economically inefficient. Furthermore, the environmental benefits of using RES would be depleted by additional carbon emissions from ramping highly flexible fossil-fueled power plants. An appealing alternative to facilitate the efficient integration of large shares of RES is to exploit the so far mainly passive demand side as an additional source of flexibility. The established centralized approaches can hardly handle the fine-grained and decentralized nature of demand side flexibility. Therefore, the intermediation between centralized control and decentralized demand will play a major role in future energy markets, which constitutes the overarching topic of this dissertation. Typically electricity generation from RES is capital-intensive but has near zero marginal costs. On this account, novel services need to be offered in order to transmit the right economic signals. To this end, the concept of the differentiable good electricity is refined in this dissertation. Embedded into the so-called energy service, characteristics such as temporal and spatial price differentiation or the risk of interruption can be specified to differentiate the so far homogeneous good. Based on the morphological design theory a framework for the notion of energy services is established and subsequently implemented as a decision support system. This supports a systematic and structured product development process to design innovative energy services. Such an innovative energy service is, e.g., the charging of electric vehicles in car parks, where prices are differentiated by job completion deadline. This allows the car park operator to control the aggregated load of all charging jobs to follow local RES generation. Based on this energy service the downstream activity of an intermediary is formally modeled as an optimization problem and evaluated by means of an empirical simulation experiment. The results provide insights on pricing policy and the value of demand side flexibility with regard to both the integration of local RES generation and operative profit optimization. In order to illustrate another innovative energy service the presented model is extended by the upstream activity of the intermediary. Household consumers are offered monetary incentives if they allow the intermediary to control their appliances. The results indicate the cost saving potential from demand side flexibility for the intermediary\u27s procurement of electricity. Beyond that, this model formulation constitutes the foundation for further examinations, e.g., to study the strategic behavior of intermediaries on real-time electricity markets that are prone to market power abuse due to low market liquidity

Coordination in Power Systems for Efficient Grid Utilization

This thesis focuses on the efficient use of power grid capacity and efficient investment into grid infrastructure on different voltage levels. More specifically, it analyzes different coordination mechanisms and incentives to achieve more efficient short-term operation and long-term investment behavior

Modellgestützte Analyse neuer Stromtarife für Haushalte unter Berücksichtigung bedarfsorientierter Versorgungssicherheitsniveaus

Im Zentrum der Arbeit steht die Ausgestaltung eines von Haushaltskunden akzeptierten Stromtarifs mit variablen Leistungspreisen sowie die Frage, wie sich dieser auf die Nachfrageflexibilität auswirkt. Dazu wird ein entsprechendes Tarifkonzept hergeleitet und mit Hilfe einer empirischen Studie hinsichtlich Akzeptanz und Ausgestaltung untersucht. Die Auswirkungen verschiedener Stromtarife auf die Nachfrageflexibilität werden mit einem entwickelten Bottom-up-Haushaltslastprofilmodell analysiert