Humanising the energy transition: Welcome to the age of the prosumer

October 1, 2019

The energy transition is no longer just an idea: it’s a fact. This new way of being in the world comes with new roles, rights and responsibilities. And one of these new roles is the shift from consumer to prosumer.


New roles

Futurist Alvin Toffler came up with the name ‘prosumer’ in the early 1980 to describe people who both consumer and produce a product. In recent years, the line between consumer and prosumer has become ever more blurred. If you create content on Instagram, for example, you are a prosumer.

The energy transition, it’s argued, can give prosumers a bigger role than ever before. Once passive consumers of energy, new technology will allow prosumers to take an active part in the management of their distributed energy resources, such as electric vehicles, solar photovoltaics, heat pumps and energy storage devices. They can produce, sell and buy their own energy.

“The energy sector is undergoing a large-scale low-carbon transition,” write Rafael Leal-Arcas, Feja Lesniewska and Filippos Proedrou in their 2018 paper, Prosumers as New Energy Actors. “What is underemphasised in this transition is that it involves a major paradigm shift from a supply-driven to a demand-side energy policy.”

Opportunities abound

This new role will bring new opportunities. Prosumers who don’t want the burden of managing their own supplies may wish to call in experts to manage those supplies for them, for example, allowing new businesses to spring up. Becoming more involved with the process of producing their own energy will encourage people to think more about the kind of energy they use, and how much of it they use.

Technology is making it easier to be a prosumer than ever, too. Apps and smart meters can deliver instant updates on systems, digital payment systems make buying and selling easier, and the rise of the gig economy means that people are now far more used to being an active participant in everyday transactions.

The biggest rise in demand is for electricity: according to McKinsey’s report Fuelling the energy transition: opportunities for financial institutions, it is growing seven times faster than for other fuels. And renewables, which can be produced in households, are becoming cheaper than fossil fuels.

Challenging times

However, the rise of the prosumer also points to new challenges. Take fluctuating energy prices, for example. What happens if the price rises or falls sharply and all the prosumers decide to buy or sell at the same time? Excessive demand could cause power outages or shortages, so demand management is key.

Information is also vital: how can prosumers best understand how to correctly participate and make the most of a complex infrastructure and market? “The provision of adequate and precise information to prosumers—so that they can optimise their use of smart grids—as well as the transition to targeted, flexible contracts to adjust to the needs of prosumers need to be embedded in well-articulated broader policy and market regulatory frameworks,” point out Leal-Arcas, Feja Lesniewska and Filippos Proedrou.

Forward thinking

Projects designed to find the best ways to get prosumers involved are already up and running. Take DCBrain, an InnoEnergy supported start-up that develops a software which allows individuals to easily visualise, in real time, what is happening in their energy and logistics networks, to identify anomalies, to predict them, and to simulate their evolution, thereby giving the customer full capacity to decide on next steps. Meet the developers and hear DCBrain CEO speak at The Business Booster during the “Skills gap or skills crisis?” parallel session.

Other examples include: Energy Floors, a company that develops, sells and rents innovative floor systems that convert kinetic energy from pedestrians and solar energy into electricity. And BeON energy– a microinverter that plugs in to a wall socket like a house appliance, enabling a PV system to become DIY and changing the way we think about the solar business.

And these are just the beginning. If governments and energy companies work together to encourage prosumers, and utilise the opportunities that technology brings, they could play a major part in the clean energy revolution. Give them the tools, and it seems prosumers will get to work.

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