The Benefits of Local Cross-Sector Consumer Ownership Models for the Transition to a Renewable Smart Energy System in Denmark. An Exploratory Study

Leire Gorroño-Albizu

doi:10.3390/en13061508

Abstract

Smart energy systems (SESs), with integrated energy sectors, provide several advantages over single-sector approaches for the development of renewable energy systems. However, cross-sector integration is at an early stage even in areas challenged by the existing high shares of variable renewable energy (VRE). The promotion of cross-sector integration requires institutional incentives and new forms of actor participation and interaction that are suitable to address the organisational challenges of implementing and operating SESs. Taking as the point of departure an empirical case and its institutional context, this article presents an exploratory study of the ability of cross-sector consumer ownership at different locations in the power distribution system to address those challenges in Denmark. The methods comprise interviews of relevant stakeholders and a literature review. The results indicate that distant and local cross-sector integration will be necessary to reduce overinvestments in the grid and that consumer co-ownership of wind turbines and power-to-heat (P2H) units in district heating (DH) systems may provide advantages over common separate ownership with regard to local acceptance and attractiveness of investments. Several possibilities are identified to improve the current institutional incentive system in Denmark. Finally, the results suggest the relevance of analysing the possibility for single-sector energy companies to transition to smart energy companies.

Highlights

A drastic reduction in global CO2 emissions is crucial to mitigate global warming and its devastating consequences [1]
This sub-section has analysed the ability of the cross-sector consumer ownership solution implemented at the different location cases presented in Figure 2 to address the organisational challenges of SESs
As suggested by the theoretical background, the necessary coordination is expected to be easier in the co-ownership solution than in the separate ownership solution because the wind turbines are regarded as one of the components of the district heating (DH) system [22,29] and the decisions are made by one single stakeholder, i.e., the DH company

Summary

Introduction

A drastic reduction in global CO2 emissions is crucial to mitigate global warming and its devastating consequences [1]. Achieving this target requires the substitution of fossil fuels, with significant reductions in energy demand and a high penetration of VRE [2] This implies fundamental changes in the energy system—most remarkably, the significant loss of flexibility on the production side (previously provided by and cheaply storable fossil fuels) and the decentralisation of the energy system (in order to harvest local energy resources with modular/scalable technologies such as wind turbines and solar panels). These changes are of a technical nature as they are expected to demand and open up important organisational changes, including new business models and the possible reconfiguration of the energy system’s ownership [3,4,5]. The new EU Renewable Energy Directive and Electricity Market Directive, which include definitions for “renewable energy communities” and “citizen energy communities”, respectively, could foster ownership changes by promoting the implementation of renewable energy projects with open and participatory forms of citizen ownership in the EU Member States

Methods

Results

Discussion

Conclusion