The EU´s plans for an Energy Union could determine the fate of private small-scale energy prosumers – not only in Europe: a dedicated long-time strategy to switch to a prosumer-centered energy system would send a strong and important signal to the many countries on the way towards energy transition to start or increase ambition.
“Prosumer-centered” Energy Union – only marketing?
The Juncker Commission has promoted its idea of an Energy Union as “New Deal” placing “active consumers” at the center of its marketing strategy. And indeed, the draft electricity, renewables and energy efficiency directives – the fundamental pillars of the Energy Union – contain some promising concepts. But it is too early to call it a success as the policy making process has only begun – and so has the lobbying. Does the European Commission really favor a prosumer-centered energy system or is it only clever marketing to ensure acceptance among EU citizens? The Commission traditionally aims at boosting economic and job growth in the first place, consumers and prosumers serve as enablers. A truly prosumer-centered energy system is likely to be incongruent with at least some the Commission´s goals, raising concerns that – in case of collision – it might give priority to the industry interests and let down prosumers.
Is a truly “prosumer-centered” energy system realistic?
Even if the Commission is really heading for a prosumer-centered energy system: does it have enough political weight to push its ideas through the policy making process? Let´s be realistic: it will not be easy. Against the background of the division of competencies between EU institutions and Member States and the corresponding EU-policy making process, the disparity among national prosumer regulations will probably lead to a diluted agreement, reflecting only the lowest common denominator.
Industry associations from the energy and other sectors (especially IT) also follow an agenda that is not in line with a truly prosumer-centric energy system, even though they hardly miss an opportunity to highlight the key role of consumers and prosumers in the future energy system. They already lobby the Member States´ and Energy Union´s institutions and will intensify their efforts when the policy making enters the final stage.
Proposals for new directives: promising start
Nevertheless, the Commission´s proposals for new Electricity, Renewables and Energy Efficiency directives contain promising concepts. The core provisions in article 15 Electricity Directive and article 21 Renewables Directive introduce a set of definitions and prosumer rights:
The proposals are now subject to the formal EU policy making process: consultations and votes in the European Parliament (EP) and the Council (Member States representatives). With the huge number of amendments (1300!) by Members of European Parliament (MEP) from all political sides more or less [all current and predictable prosumer types and prosumer activities] have been introduced to the discussion. Due to the large number of controversial subjects, the directives are very likely to go the longest way possible with the final decision to be taken in so called “Trilogues”, informal meetings in which representatives from the Council, the Commission and the EP meet and try to find a common text which all agree upon.
Amongst the large number of prosumer-relevant subjects, the most important – and hence most disputed – are likely to be the following:
- Formal right to generate, store, self-consume and feed-in
- Formal right to participate on the markets to monetize (excess) electricity, flexibility (battery storage, electric vehicle) and demand response (heat pumps, CHP) – individually or through aggregators
- Prosumer rights enforcement
- Guarantee that prosumers maintain the consumer status and protection – under civil law, energy law and State aid/competition law
- Guaranteed & priority grid access and priority dispatch for small scale renewables
- Transparent system of grid tariffs/rate design with fair allocation of costs & benefits
- Proportionate administrative procedures & requirements
- Proportionate technical rules, esp. regarding the integration of dispatchable generation and consumption appliances into the smart grid
- Empower & promote tenants to become prosumer
- Empower & promote low-income households to become prosumer to address energy poverty
- Enabling framework for innovative business cases, e.g. blockchain-based P2P-trading, provision of ancillary services through pooled battery storage systems
- Proportionate digitization of the energy system: cost/benefit, privacy, data ownership
Summary and Outlook
The European Union´s plans for an Energy Union could boost the energy transition and climate change mitigation through “The Rise of Prosumers”. But it could also turn out to be a tough setback for prosumers. The policy making process will be difficult – and heavily lobbied. Failure – especially after “trilogues” being criticized as non-transparent and not democratic – would send a devastating signal to world.
Against the background of the Paris Agreement, the EU should not miss the opportunity to become a role model for a sustainable energy system with consumers and prosumers at its core. It should therefore set up an ambitious and innovative regulatory framework which supports all prosumer types, house owners and tenants, and all prosumer activities. The European Commission, Member States and all other stakeholders, who proclaimed an “prosumer-centred Energy Union”, will be measured against their own promises: if “prosumers” are on the label, they must be inside, too!