Business models and market pricing mechanisms within virtual microgrids for smart energy networks : a European market perspective

Abstract

Over the past decade, a number of countries across the world have taken up steps to increase the share of renewables such as Wind and Solar PV in their generation portfolio. EU has a goal to enable the transmission and distribution of up to 35% of electricity from dispersed and concentrated renewable sources by 2020 and a completely de-carbonized electricity production by 2050. However, these "clean" sources too have a lot of critics questioning the stability and reliability of the future power system with large scale integration of renewables. This is primarily due to the intermittent and non-reliable nature of renewables. A concept of microgrid aggregator (VMGA) has been investigated in this thesis work as a step forward in an attempt that, a power market system with large scale integration of small RES prosumers is possible. This thesis work investigates the possible market pricing models in a decentralized electricity market network by participation of aggregators who will have market power to participate in the grid. Full integration of RES prosumers in future power system is visualized. Ten different pricing models based on existing economic principles and market types have been discussed in detail. The recent trend in research is to exploit business possibilities and opportunities in ICT backed grid of the future where RES energy is a reliable and profitable business. In keeping with the trend, business model canvas and value proposition canvas for the microgrid aggregator (VMGA) has been illustrated so as to enable the managers to be better prepared while working in decentralized grid of the future.