Participation of active consumers in the electricity system: Design choices for consumer governance

Abstract

Household electricity use has an increasing impact on the overall energy system. Numerous proposals have been made to support households to consume electricity in a system-friendlier manner. By breaking these proposals down into functions and how they are performed, this paper identifies four distinctive governance designs: energy communities, variable electricity tariffs, local energy markets and virtual power plants. None covers all the functions required and each addresses different trade-offs that households face. Energy communities focus on investing in energy assets, while the others target the operation of households’ assets, including demand response. Virtual power plants attract profit-oriented consumers, while the others primarily target normative consumers.

Keywords

• Energy market design
• Demand response
• Distributed energy resources
• Variable tariff
• Local energy market
• Virtual power plant