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

Zheng Ma, Joy Dalmacio Billanes and Bo Nørregaard Jørgensen
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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

Energies, 2017, vol. 10, issue 10, 1-19

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.

Keywords: demand response; virtual power plant; energy flexibility potential; aggregators; business model; building energy flexibility (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2017
References: View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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