From Passive to Active Consumers

The term “prosumer” reflects the shift from passive consumers of centrally, large-scale generated electricity and heat to more active players. House owners or tenants in a multi-unit dwellings – all consumers dispose of a portfolio of valuable goods enabling and empowering them to participate and collaborate on the energy market. The energy transition, digitization and technological innovations enrich the portfolio and boost the number of prosumers. Their portfolio turns prosumers into wanted business partners and emancipated players on the energy market.

“Classic” Prosumer by Generation

“Prosumer” emerged in the context of residential small-scale PV generation by house owners/tenants. They generate their own electricity (produce) to self-consume and/or sell it to the grid. When self-production falls short they buy energy from the grid (consume). The decreasing costs of PV and battery storage systems will increase the number of these “classic” prosumers.

The generation of heat and warm water with heat pumps, solar thermal installations or combined heat and power systems (CHP) is another “classic” and important prosumer activity. The integration of the electricity, cooling & heating and mobility sector (“Integrated Energy”), that is considered the key concept for an energy system with high share of renewables, will create new opportunities for prosumers: residential PV systems can provide the electricity for heat pumps and heater rods (electricity to heat) as well as for electric vehicles (electricity to mobility).

Producing Flexibility (DERs)

In the future supply-driven energy system based on volatile renewables and energy efficiency, the prosumers´ generation, storage and consumption capabilities are considered important distributed energy resources (DERs). These DERs are key to balancing the (smart) grid: consuming and charging battery storage systems in times of abundant generation, shifting consumption, generating and discharging battery storage systems to feed into the grid in times of shortage.

These flexibility or ancillary (grid) services will not only be provided by “classic” prosumers with PV and storage systems. Tenants, for example, can also buy battery storage systems without owning PV systems. They become part of a (virtual or cloud-based) community that generates, stores, consumes or sells its own energy and flexibility.

Owners of electric vehicles (EV) will be an important prosumer group in this context as EVs are technically battery storage systems. With the expected increase of EVs in the future mobility system, two-way battery charging will become a crucial flexibility option (“vehicle to grid”, “mobility to grid”).

Producing Energy Savings (Demand Response)

Demand Response (DR), the change in power consumption of a consumer to better match the demand for power with the supply, is another important DER. Dispatchable heating and cooling appliances such as heat pumps, CHP and air conditioning, are particularly suitable for DR – individually or aggregated, bringing together small individual loads to provide one larger bid.

But DR is not limited to larger appliances. Every consumer becomes a prosumer by simply using energy in a more flexible way, e.g. by responding to price signals through “dynamic tariffs”. The ongoing digitization, especially the roll out of smart meters, smart grids and home automation systems, as well as new “disruptive” technologies like blockchain, the internet of things (IoT) and artificial intelligence (AI) will boost demand response.

Producing (Big) Data – the “New Oil”

Consumers turn into prosumers by producing data – the “new oil” not only on the energy market but in all industries. Access to (real time) data on consumption, generation and storage, functioning of appliances and devices or on behavioral patterns (“big data”) becomes a crucial competitive advantage and the basis for new data-driven business cases. Consequently, IT companies are entering the energy market: Titans like Google and Apple as well as an increasing number of start-ups.

Consumers can benefit from data – more, real-time, more accurate – in terms of energy efficiency, security and comfort (smart home). For companies, (big) data helps to make internal and external business processes more efficient, create new data driven business cases (smart home) and improve customer loyalty. For grid operators, data enables a more efficient and smarter (= cheaper) grid management. For manufacturers, data is key in terms of maintenance, product development and customer relation management. This applies particularly to EVs, connected and autonomous cars.

It is noteworthy that the rising importance of (big) data for businesses raises significant privacy issues.

Digitization, Blockchain, IoT, AI

Digitization and innovative technologies, such as blockchain, the “Internet of Things” (IoT) and Artificial Intelligence (AI), will enrich the prosumers´ portfolio and boost the number of prosumers. They might even disrupt the whole energy system.

The digitization of the energy system, especially the rollout of smart meters and smart grids, provides the basic infrastructure for the future energy system and for prosumer business cases. The blockchain technology could be the key to unlock the prosumers´ potential of generation, storage and consumption capabilities and flexibilities, as it enables a low-cost decentralized transaction and energy supply system – without intermediaries. Prosumers can buy and sell even small amounts of energy directly. They can also monetize their flexibility and demand response potential via a blockchain.

In a future “Internet of Things” or “Energy Internet”, prosumers could benefit from smart devices that record, respond to, communicate and share data. The IoT could reduce the complexity of managing energy consumption and empower consumers to better understand their energy consumption in real-time, down to the small appliance level. It allows consumers to manage heating, cooling, lighting and other connected home devices and reducing energy consumption and bills. The devices might even be able to generate, buy and sell their own electricity. Blockchain could be the basic technology to process and store all the corresponding transactions and data.

A modern energy system will also learn from consumer configurations and habits, operating silently and seamlessly in the background to create personalized recommendations for users based on data gathered.