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Aggregation Potentials for Buildings—Business Models of Demand Response and Virtual Power Plants

Author

Listed:
  • Zheng Ma

    (Center for Energy Informatics, Mærsk Mc-Kinney Møller Institute, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark)

  • Joy Dalmacio Billanes

    (Center for Energy Informatics, Mærsk Mc-Kinney Møller Institute, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark)

  • Bo Nørregaard Jørgensen

    (Center for Energy Informatics, Mærsk Mc-Kinney Møller Institute, University of Southern Denmark, Campusvej 55, 5230 Odense M, Denmark)

Abstract

Buildings as prosumers have an important role in the energy aggregation market due to their potential flexible energy consumption and distributed energy resources. However, energy flexibility provided by buildings can be very complex and depend on many factors. The immaturity of the current aggregation market with unclear incentives is still a challenge for buildings to participate in the aggregation market. However, few studies have investigated business models for building participation in the aggregation market. Therefore, this paper develops four business models for buildings to participate in the energy aggregation market: (1) buildings participate in the implicit Demand Response (DR) program via retailers; (2) buildings with small energy consumption participate in the explicit DR via aggregators; (3) buildings directly access the explicit DR program; (4) buildings access energy market via Virtual Power Plant (VPP) aggregators by providing Distributed Energy Resources (DER)s. This paper also determines that it is essential to understand building owners’ needs, comforts, and behaviours to develop feasible market access strategies for different types of buildings. Meanwhile, the incentive programs, national regulations and energy market structures strongly influence buildings’ participation in the aggregation market. Under the current Nordic market regulation, business model one is the most feasible one, and business model two faces more challenges due to regulation barriers and limited monetary incentives.

Suggested Citation

  • Zheng Ma & Joy Dalmacio Billanes & Bo Nørregaard Jørgensen, 2017. "Aggregation Potentials for Buildings—Business Models of Demand Response and Virtual Power Plants," Energies, MDPI, vol. 10(10), pages 1-19, October.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:10:p:1646-:d:115763
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    Citations

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    Cited by:

    1. Mlecnik, Erwin & Parker, James & Ma, Zheng & Corchero, Cristina & Knotzer, Armin & Pernetti, Roberta, 2020. "Policy challenges for the development of energy flexibility services," Energy Policy, Elsevier, vol. 137(C).
    2. Giulietti, Monica & Le Coq, Chloé & Willems, Bert & Anaya, Karim, 2019. "Smart Consumers in the Internet of Energy : Flexibility Markets & Services from Distributed Energy Resources," Other publications TiSEM 2edb43b5-bbd6-487d-abdf-7, Tilburg University, School of Economics and Management.
    3. Ramos, Dorel Soares & Del Carpio Huayllas, Tesoro Elena & Morozowski Filho, Marciano & Tolmasquim, Mauricio Tiomno, 2020. "New commercial arrangements and business models in electricity distribution systems: The case of Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 117(C).
    4. Bhuiyan, Erphan A. & Hossain, Md. Zahid & Muyeen, S.M. & Fahim, Shahriar Rahman & Sarker, Subrata K. & Das, Sajal K., 2021. "Towards next generation virtual power plant: Technology review and frameworks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    5. Pedro Faria, 2019. "Distributed Energy Resources Management," Energies, MDPI, vol. 12(3), pages 1-3, February.
    6. Adrian Tantau & András Puskás-Tompos & Laurentiu Fratila & Costel Stanciu, 2021. "Acceptance of Demand Response and Aggregators as a Solution to Optimize the Relation between Energy Producers and Consumers in order to Increase the Amount of Renewable Energy in the Grid," Energies, MDPI, vol. 14(12), pages 1-19, June.
    7. Botelho, D.F. & de Oliveira, L.W. & Dias, B.H. & Soares, T.A. & Moraes, C.A., 2022. "Prosumer integration into the Brazilian energy sector: An overview of innovative business models and regulatory challenges," Energy Policy, Elsevier, vol. 161(C).
    8. Tronchin, Lamberto & Manfren, Massimiliano & Nastasi, Benedetto, 2018. "Energy efficiency, demand side management and energy storage technologies – A critical analysis of possible paths of integration in the built environment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 95(C), pages 341-353.
    9. Tang, Hong & Wang, Shengwei & Li, Hangxin, 2021. "Flexibility categorization, sources, capabilities and technologies for energy-flexible and grid-responsive buildings: State-of-the-art and future perspective," Energy, Elsevier, vol. 219(C).
    10. Guntram Pressmair & Christof Amann & Klemens Leutgöb, 2021. "Business Models for Demand Response: Exploring the Economic Limits for Small- and Medium-Sized Prosumers," Energies, MDPI, vol. 14(21), pages 1-28, October.
    11. Mahmood Hosseini Imani & Shaghayegh Zalzar & Amir Mosavi & Shahaboddin Shamshirband, 2018. "Strategic Behavior of Retailers for Risk Reduction and Profit Increment via Distributed Generators and Demand Response Programs," Energies, MDPI, vol. 11(6), pages 1-24, June.
    12. Yuchun Li & Yinghua Han & Jinkuan Wang & Qiang Zhao, 2018. "A MBCRF Algorithm Based on Ensemble Learning for Building Demand Response Considering the Thermal Comfort," Energies, MDPI, vol. 11(12), pages 1-20, December.
    13. Shaw-Williams, Damian & Susilawati, Connie, 2020. "A techno-economic evaluation of Virtual Net Metering for the Australian community housing sector," Applied Energy, Elsevier, vol. 261(C).
    14. Zixu Liu & Xiaojun Zeng & Fanlin Meng, 2018. "An Integration Mechanism between Demand and Supply Side Management of Electricity Markets," Energies, MDPI, vol. 11(12), pages 1-23, November.

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