An energy-as-a-service business model for aggregators of prosumers

Abstract

Traditional retail business models price electricity using volumetric tariffs, which charge customers for the unit of energy consumed. These tariffs were designed for passive consumers with low flexibility. In this paper, we argue that these volumetric tariffs are unsuitable for prosumers with high flexibility since they are unable to adequately value the flexibility of their distributed energy resources in multiple electricity markets. This reduces the interest of prosumers participating in aggregators’ business models. To address this issue, we propose a new business model for aggregators of prosumers, based on the concept of energy-as-a-service. In this business model, prosumers pay a monthly fee for aggregators to represent and optimize them in multiple wholesale electricity markets, including in energy and ancillary service markets. The monthly fee is computed by a new techno-economic simulation framework proposed in this paper, which can also be used to estimate the profitability of the new business model from the perspectives of both the aggregator and prosumers. Our experiments on a portfolio of real prosumers from Australia show that the new business model maximizes the economic benefits of both the aggregator and prosumers by increasing the average profit of the aggregator by 438% and reducing the average electricity cost of prosumers from $583/year to $0 when compared to two of the most common retail business models available in the Australian market. In other words, the economic benefit for prosumers is free electricity. In addition to this benefit, the new business model also provides simplicity and predictability to prosumers, as they are offered a guaranteed outcome before providing the services.