Econonomics of Energy and Environmental Policy

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“Prosumage” and the British Electricity Market

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Abstract:
Domestic electricity consumers with PV panels have become known as "prosumers"; some of them also have energy storage and we have named the combination "prosumage". The challenges of renewable intermittency could be offset by storing power, and many engineering studies consider the role and value of storage which is properly integrated into the 'smart grid'. Such a system with holistic optimal control may fail to materialise for regulatory, economic, or behavioural reasons. We therefore model the impact of naive prosumage: households which use storage only to maximise self-consumption of PV, with no consideration of the wider system. We find it is neither economic for arbitrage nor particularly beneficial for shaving peaks and filling troughs in national net demand. The extreme case of renewable self-sufficiency, becoming completely independent of the grid, is still prohibitively expensive in Britain and Germany, and even in a country like Spain with a much better solar resource.
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JEL Codes:L51: Economics of Regulation, Q41: Energy: Demand and Supply; Prices, L94: Electric Utilities


Keywords: prosumer, electric storage, battery, solar PV, electricity market

DOI: 10.5547/2160-5890.6.1.rgre


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Published in Volume 6, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


 

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