IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i10p4231-d1152129.html
   My bibliography  Save this article

The Role of Distributed Energy Resources and Associated Business Models in the Decentralised Energy Transition: A Review

Author

Listed:
  • Karlson Hargroves

    (Curtin Sustainability Policy Institute, Curtin University, Bentley 6102, Australia)

  • Benjamin James

    (Curtin Sustainability Policy Institute, Curtin University, Bentley 6102, Australia)

  • Joshua Lane

    (University of Adelaide, Adelaide 5005, Australia)

  • Peter Newman

    (Curtin Sustainability Policy Institute, Curtin University, Bentley 6102, Australia)

Abstract

The shift from large-scale centralised energy systems to smaller scale decentralised systems based on Distributed Energy Resources (DER) is likely to cause a sector-wide replacement of current electricity management practices and business models—creating a new energy paradigm. If handled well, such a transition will not be inherently disruptive; however, it can cause major disruption if long-held views and assumptions are not rapidly reconsidered and renewed, and new supporting structures are not swiftly put in place—hence, if disruption is experienced it will be due to a lack of strategic responses rather than the nature of the technology. This paper clarifies the nature of DERs and outlines key issues and opportunities associated with a range of associated service configurations and business models. The paper outlines key factors affecting the viability of such approaches and identifies leverage points for accelerating uptake. The paper concludes by considering how shifting landscape factors and related opportunities in the coming decades will shape the transition to a decentralised energy system. This paper contains findings from research performed at the Renewable, Affordable, Clean Energy Cooperative Research Centre (RACE CRC) in Australia.

Suggested Citation

  • Karlson Hargroves & Benjamin James & Joshua Lane & Peter Newman, 2023. "The Role of Distributed Energy Resources and Associated Business Models in the Decentralised Energy Transition: A Review," Energies, MDPI, vol. 16(10), pages 1-15, May.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:10:p:4231-:d:1152129
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/10/4231/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/10/4231/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Murphy, C.A. & Schleifer, A. & Eurek, K., 2021. "A taxonomy of systems that combine utility-scale renewable energy and energy storage technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 139(C).
    2. Elbert Dijkgraaf & Tom P. van Dorp & Emiel Maasland, 2018. "On the Effectiveness of Feed-in Tariffs in the Development of Solar Photovoltaics," The Energy Journal, , vol. 39(1), pages 81-100, January.
    3. Bouffard, François & Kirschen, Daniel S., 2008. "Centralised and distributed electricity systems," Energy Policy, Elsevier, vol. 36(12), pages 4504-4508, December.
    4. Zakeri, Behnam & Gissey, Giorgio Castagneto & Dodds, Paul E. & Subkhankulova, Dina, 2021. "Centralized vs. distributed energy storage – Benefits for residential users," Energy, Elsevier, vol. 236(C).
    5. Yael Parag & Benjamin K. Sovacool, 2016. "Electricity market design for the prosumer era," Nature Energy, Nature, vol. 1(4), pages 1-6, April.
    6. Ma, Rufei & Cai, Huan & Ji, Qiang & Zhai, Pengxiang, 2021. "The impact of feed-in tariff degression on R&D investment in renewable energy: The case of the solar PV industry," Energy Policy, Elsevier, vol. 151(C).
    7. Jennie C. Stephens & Elizabeth J. Wilson & Tarla R. Peterson & James Meadowcroft, 2013. "Getting Smart? Climate Change and the Electric Grid," Challenges, MDPI, vol. 4(2), pages 1-16, September.
    8. Nallapaneni Manoj Kumar & Aneesh A. Chand & Maria Malvoni & Kushal A. Prasad & Kabir A. Mamun & F.R. Islam & Shauhrat S. Chopra, 2020. "Distributed Energy Resources and the Application of AI, IoT, and Blockchain in Smart Grids," Energies, MDPI, vol. 13(21), pages 1-42, November.
    9. Jafari, Mehdi & Korpås, Magnus & Botterud, Audun, 2020. "Power system decarbonization: Impacts of energy storage duration and interannual renewables variability," Renewable Energy, Elsevier, vol. 156(C), pages 1171-1185.
    10. Burger, Scott P. & Luke, Max, 2017. "Business models for distributed energy resources: A review and empirical analysis," Energy Policy, Elsevier, vol. 109(C), pages 230-248.
    11. Charbonnier, Flora & Morstyn, Thomas & McCulloch, Malcolm D., 2022. "Coordination of resources at the edge of the electricity grid: Systematic review and taxonomy," Applied Energy, Elsevier, vol. 318(C).
    12. Bouzid, Allal M. & Guerrero, Josep M. & Cheriti, Ahmed & Bouhamida, Mohamed & Sicard, Pierre & Benghanem, Mustapha, 2015. "A survey on control of electric power distributed generation systems for microgrid applications," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 751-766.
    13. Sharma, Vanika & Haque, Mohammed H. & Aziz, Syed Mahfuzul, 2019. "Energy cost minimization for net zero energy homes through optimal sizing of battery storage system," Renewable Energy, Elsevier, vol. 141(C), pages 278-286.
    14. Lucas Schmeling & Patrik Schönfeldt & Peter Klement & Steffen Wehkamp & Benedikt Hanke & Carsten Agert, 2020. "Development of a Decision-Making Framework for Distributed Energy Systems in a German District," Energies, MDPI, vol. 13(3), pages 1-22, January.
    15. Mahmud, Khizir & Khan, Behram & Ravishankar, Jayashri & Ahmadi, Abdollah & Siano, Pierluigi, 2020. "An internet of energy framework with distributed energy resources, prosumers and small-scale virtual power plants: An overview," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    16. Pepa Ambrosio-Albalá & Catherine S. E. Bale & Andrew J. Pimm & Peter G. Taylor, 2020. "What Makes Decentralised Energy Storage Schemes Successful? An Assessment Incorporating Stakeholder Perspectives," Energies, MDPI, vol. 13(24), pages 1-22, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sergio Cantillo-Luna & Ricardo Moreno-Chuquen & David Celeita & George J. Anders, 2024. "A Stochastic Decision-Making Tool Suite for Distributed Energy Resources Integration in Energy Markets," Energies, MDPI, vol. 17(10), pages 1-28, May.
    2. Pruethsan Sutthichaimethee, 2024. "A Framework on Setting Strategies for Enhancing the Efficiency of State Power use in Thailand’s Pursuit of a Green Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 14(1), pages 108-120, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Maarten Wolsink, 2020. "Framing in Renewable Energy Policies: A Glossary," Energies, MDPI, vol. 13(11), pages 1-31, June.
    2. Zhou, Hou Sheng & Passey, Rob & Bruce, Anna & Sproul, Alistair B., 2021. "A case study on the behaviour of residential battery energy storage systems during network demand peaks," Renewable Energy, Elsevier, vol. 180(C), pages 712-724.
    3. 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).
    4. Imke Lammers & Lea Diestelmeier, 2017. "Experimenting with Law and Governance for Decentralized Electricity Systems: Adjusting Regulation to Reality?," Sustainability, MDPI, vol. 9(2), pages 1-14, February.
    5. Eberhard Rothfuß & Festus Boamah, 2020. "Politics and (Self)-Organisation of Electricity System Transitions in a Global North–South Perspective," Politics and Governance, Cogitatio Press, vol. 8(3), pages 162-172.
    6. Mitridati, Lesia & Kazempour, Jalal & Pinson, Pierre, 2021. "Design and game-Theoretic analysis of community-Based market mechanisms in heat and electricity systems," Omega, Elsevier, vol. 99(C).
    7. Moritz Ehrtmann & Lars Holstenkamp & Timon Becker, 2021. "Regional Electricity Models for Community Energy in Germany: The Role of Governance Structures," Sustainability, MDPI, vol. 13(4), pages 1-24, February.
    8. Hua, Weiqi & Jiang, Jing & Sun, Hongjian & Tonello, Andrea M. & Qadrdan, Meysam & Wu, Jianzhong, 2022. "Data-driven prosumer-centric energy scheduling using convolutional neural networks," Applied Energy, Elsevier, vol. 308(C).
    9. Yang, Xinyue & Matsumoto, Shigeru, 2023. "To use or not to use, that is the question: Income and substitution effects in the feed-in tariff system for solar-generated electricity," Japan and the World Economy, Elsevier, vol. 68(C).
    10. Michaelis, Anne & Hanny, Lisa & Körner, Marc-Fabian & Strüker, Jens & Weibelzahl, Martin, 2024. "Consumer-centric electricity markets: Six design principles," Renewable and Sustainable Energy Reviews, Elsevier, vol. 191(C).
    11. Himanshi Agrawal & Akash Talwariya & Amandeep Gill & Aman Singh & Hashem Alyami & Wael Alosaimi & Arturo Ortega-Mansilla, 2022. "A Fuzzy-Genetic-Based Integration of Renewable Energy Sources and E-Vehicles," Energies, MDPI, vol. 15(9), pages 1-15, April.
    12. Matthias Kühnbach & Felix Guthoff & Anke Bekk & Ludger Eltrop, 2020. "Development of Scenarios for a Multi-Model System Analysis Based on the Example of a Cellular Energy System," Energies, MDPI, vol. 13(4), pages 1-23, February.
    13. Nicholas Mukisa & Ramon Zamora & Tek Tjing Lie, 2022. "Energy Business Initiatives for Grid-Connected Solar Photovoltaic Systems: An Overview," Sustainability, MDPI, vol. 14(22), pages 1-26, November.
    14. Hua, Weiqi & Chen, Ying & Qadrdan, Meysam & Jiang, Jing & Sun, Hongjian & Wu, Jianzhong, 2022. "Applications of blockchain and artificial intelligence technologies for enabling prosumers in smart grids: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    15. O'Shaughnessy, Eric & Cutler, Dylan & Ardani, Kristen & Margolis, Robert, 2018. "Solar plus: A review of the end-user economics of solar PV integration with storage and load control in residential buildings," Applied Energy, Elsevier, vol. 228(C), pages 2165-2175.
    16. Lowitzsch, Jens & Kreutzer, Kaja & George, Jan & Croonenbroeck, Carsten & Breitschopf, Barbara, 2023. "Development prospects for energy communities in the EU identifying best practice and future opportunities using a morphological approach," Energy Policy, Elsevier, vol. 174(C).
    17. Kühnbach, Matthias & Bekk, Anke & Weidlich, Anke, 2022. "Towards improved prosumer participation: Electricity trading in local markets," Energy, Elsevier, vol. 239(PE).
    18. Wolsink, Maarten, 2020. "Distributed energy systems as common goods: Socio-political acceptance of renewables in intelligent microgrids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    19. Botelho, D.F. & Dias, B.H. & de Oliveira, L.W. & Soares, T.A. & Rezende, I. & Sousa, T., 2021. "Innovative business models as drivers for prosumers integration - Enablers and barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 144(C).
    20. Alessandro Labella & Filip Filipovic & Milutin Petronijevic & Andrea Bonfiglio & Renato Procopio, 2020. "An MPC Approach for Grid-Forming Inverters: Theory and Experiment," Energies, MDPI, vol. 13(9), pages 1-17, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:16:y:2023:i:10:p:4231-:d:1152129. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.