The socio-economic impact of renewable electricity generation with prosumer activity

Abstract

In order to meet the targets of the Paris Agreement, a rapid and far-reaching phase-out of fossil fuels is required. Against this background, Austria aims to cover 100% of its electricity generation from renewable energy sources by 2030. To meet this target in a standard scenario of final electricity demand, renewable electricity generation needs to be expanded by 27 TWh compared to 2019 (11 TWh PV, 10 TWh wind power, 5 TWh hydropower, and 1 TWh biomass). With respect to the ambitious expansion target for PV, the contribution of households, i.e., prosumers, will be of crucial importance.Depending on their background (most notably, type of building, income), the ability of different household groups to participate in the electricity market as prosumers—and hence, the possible distributive impacts of the electricity transformation—will vary substantially. Prosumers reduce the consumption of electricity from the grid and can thereby realize cost savings, increasing their consumption opportunities for other (non-energy) goods.This paper investigates the economic and distributive impact of increasing household PV electricity generation in Austria until 2030. For this purpose, the household module of the macroeconomic model DYNK is expanded, differentiating the degree to which households engage in “prosumer” activities. A set of PV support policy scenarios is then defined to simulate the increase in the number of prosumers as well as the distributive impacts on the different household types and the macroeconomic impacts with the expanded model. The simulation results show a small but positive effect of increased investment in residential photovoltaic systems on the GDP. With respect to the distributive effects, the design of the support scheme is essential. Targeting support for low-income households also has positive impacts on GDP growth.