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Electric vehicles with bidirectional charging, ‘everything as a service’, demand side flexibility and hydrogen are just some of the innovations long predicted by the energy experts who helped shape and integrate them. The emergence of energy communities, however, happened more quickly. In the space of just a few months, they became the new hot topic of new energy. But how did this happen, and what does it mean for the future energy system, especially within the context of a world in needs of a good health and economic recovery strategy?
We could argue that it all started with the two European directives (the Renewable Energy Directive for Renewable Energy Communities, and the Electricity Market Directive for Citizen Energy Communities) giving energy communities unprecedented rights. But giving credit where credit is due, these two directives are the results of energy communities, represented by the European cooperative REScoop, demonstrating to the European Commission that they have an essential role to play in the energy transition. Energy communities argued as well that every single person in Europe has the inherent right to take ownership of such a fundamental matter and yield benefits from it.
We’re at a tipping point in how electricity systems are balanced. Traditionally, supply and demand have been matched by turning large power plants up and down, with the occasional very large industrial customer, like a steel works, containing its demand to help balance the system. But over the last ten years we’ve seen a new breed of businesses – aggregators – bringing together hundreds and thousands of distributed assets to help the electricity systems stay balanced.
We’ve seen more and more aggregators emerging as markets have opened to distributed portfolios, with more than 70 appearing across Europe. Delta-ee Director Jon Slowe suggests “we are past the tipping point of this being a distinct sector in the energy market and there will be lots more action and development over the next years”.
Demand Side Response (DSR) markets are at varying stages of development across Europe. Typically, market access and value streams are characterised by uncertainties inherent to policies and market volatility. The aggregation business has been around for more than 10 years, and everybody has asked the same question: Are aggregators profitable businesses today? Aggregators will definitely be needed at scale – but can they survive financially until it happens?
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