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Market Design for a Decentralized Integrated European Energy Transformation

Project description

Engaging consumers in decentralised energy transformation

The 'Clean Energy for all Europeans' package of the European Commission calls for higher engagement of residential electricity consumers in the energy value chain, from production and sharing to flexible and responsive demand. However, while the European legislation advances the end user of electricity as a central player in the future market, national regulations do not follow this process fast enough. The EU-funded NRGcitizens project will explore the advantages and disadvantages of a decentralised energy transformation from a system perspective, how the organisational models could be designed, and which business models arise in energy communities. The project will also examine the possible market designs for a 100 % renewable energy transformation, integrating the heating and transportation sectors.

Objective

"The European Commission, with its ""Clean Energy for all Europeans"" package, calls for stronger participation of residential electricity consumers—individually or through communities—in the energy value chain, that is, production and sharing as well as flexible and responsive demand. While European legislation is promoting the end user of electricity (and therewith, both, the consumer and so-called prosumer) as a key player in the future market, national regulation is often not proceeding fast enough in this transition process. While pilot projects in many countries have shown the technical and economic feasibility of energy communities in Europe and around the world, the impact of widespread implementation on existing markets remains unclear. In theory, these local electricity markets could form a bridge between decentralized electricity production and wholesale electricity exchanges as well as driving investments in distributed energy resources without governmental subsidies. Yet, research on local market designs and associated features developed on the basis of pilot projects is still in an early stage, especially in regard to regulatory and economic frameworks. Subsequently, there is a mismatch between developed market designs and their feasibility in the current regulatory framework. The project NRGcitizen will therefore address the following research questions: What are advantages and disadvantages of a decentralized energy transformation from a system perspective? How could organizational models be designed and what business models arise in energy communities? What are possible market designs for a 100% renewable energy transformation, integrating the heating and transportation sectors? Techno-economic modeling will be used to quantitatively assess those designs. The project will enlarge policymakers’ toolbox for the analysis of energy markets to assess the value of decentralized small-scale production and flexibility, thereby making it highly policy-relevant."

Coordinator

COPENHAGEN BUSINESS SCHOOL
Net EU contribution
€ 207 312,00
Address
SOLBJERG PLADS 3
2000 Frederiksberg
Denmark

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Region
Danmark Hovedstaden Byen København
Activity type
Higher or Secondary Education Establishments
Links
Total cost
€ 207 312,00