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Economics of pooling small local electricity prosumers—LCOE & self-consumption


  • Kästel, Peter
  • Gilroy-Scott, Bryce


The arrival of small-scale decentralized energy installations coincides with the emergence of so-called “prosumers”—entities/households that are producer and consumer of energy in one. This research focuses on an electricity prosumer model in the context of the UK market. Levelized cost of electricity (LCOE) for photovoltaic (PV) and wind energy will be modeled for six UK sites. Additionally, self-consumption levels for two different load profiles and technologies will be estimated per site. The simulations are modeled with HOMER software and multiple inputs will be varied including: natural resource, equipment cost, maintenance cost, equipment life expectancy, cost of capital, project life and load profiles. The modeled self-consumption levels show significant differences and varied between 31% and 72% depending on load profile itself and RE technologies mixes modeled. The pooling of prosumers implied by lower load profile volatility proved to be beneficial to self-consumption levels in the modeled scenarios, up to 17.6%. LCOE showed significant ranges depending on the input parameters and their combination, 10–55p/kWh for PV and 2–19p/kWh for wind. The combination of these factors is decisive for the final LCOE and the negative effects of less benign factors can be compensated by other parameters. When compared to current electricity retail prices of around 15p/kWh around 97% of wind sites and around 4% of PV scenarios implied LCOE reached grid parity. The self-consumption levels and LCOE analysis indicate the viability of electricity prosumer models.

Suggested Citation

  • Kästel, Peter & Gilroy-Scott, Bryce, 2015. "Economics of pooling small local electricity prosumers—LCOE & self-consumption," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 718-729.
  • Handle: RePEc:eee:rensus:v:51:y:2015:i:c:p:718-729
    DOI: 10.1016/j.rser.2015.06.057

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