Business models for demand response related to small- and medium-sized prosumers – new stakeholders and the role of DSOs

The concept of demand response (DR) is considered a promising approach for covering increasing demand for flexibility in our electricity system. In this paper, firstly an overview of relevant flexibility markets for DR is given and the role of distribution system operators (DSOs) is highlighted. Then, novel business models making use of demand side flexibility at small- and medium-sized prosumers are identified and assessed by carrying out a business model canvas analysis. In this context, new market players in the field of DR are discussed, including aggregators and flexibility service companies. Also, organisations potentially assuming those roles are mentioned such as facility managers, technology providers, energy retailers and microgrid managers. Finally, the implications on DSOs arising from such business models are considered. The paper concludes, that the decisive factor for economic viability of DR business models targeting small- and medium sized prosumers are transaction costs. Those need to be strictly minimised by applying automated aggregation platforms and by making use of existing customer channels. DSOs need to maintain a neutral position, providing meter data and procuring local flexibility demand. More active roles of DSOs dispatching loads at prosumers’ sites and therefore gaining local flexibility need to be further specified by the regulatory framework.