Policies for Prosumer Business Models in the EU

Prosumers – who both consume and produce renewable energy (RES) and actively modulate their demand – are now a significant feature of energy systems. Across the EU and in the UK, policymakers have sought to drive the adoption of RES, including significant volumes of rooftop photovoltaics (PV). Although this has driven down electricity CO2 emissions it has also created new policy challenges. The intermittency of RES is creating significant volatility in wholesale markets, and decarbonization targets are making traditional fossil fuel sources of balancing/flexibility obsolete. Further, heat and transport systems will increasingly need to be decarbonised and electrified using RES.

In this report, we argue that one of the best ways to address these interrelated challenges is through emerging ‘prosumer business models’. We cover eight ‘families’ of prosumer business models and highlight a range of relevant issues that inform our policy recommendations. By striving to enable these business models, policymakers can facilitate the continued deployment of RES whilst delivering system stability, enabling heat and transport decarbonisation, empowering communities and addressing energy poverty.