The Collective Power Platform by roelofsmichiel

For the semi-final round we updated the following parts: 

·       Summary has been updated

·       The section: “What actions do you propose?” has been largely updated, only the subsection: “Smart infrastructure” has stayed unchanged. Especially, the subsection "Transparent and competitive prices" addresses the competitiveness of the Collective Power Platform. Various business models are discussed in the subsection “Open and technology agnostic”

·       The section: “Who will take these actions?” has been completely rewritten. Here we describe who is the “champion” of our proposal and we describe future roles in a smart grid environment besides the Collective Power Platform. 

·       The section: “Key benefits” has been updated and presents options for how active prosumers can become in the collective power platform.

·       The section: “Time line” has been shortened.

We are looking forward to receive the feedback of the jury. 

Best regards,
Michiel and Niko

Thank you very much for selecting the Collective Power Platform for the final round of the energy supply 2016 contest! We have taken your comments into account and will reply on the regulatory and market power challenges as well as provide a brief competitive landscape analysis.

Regulations and Market Power

Our concept would indeed require a shift in how different actors in the energy system interact. Especially in Europe there are several regulatory developments already underway, that would facilitate the realization of a Collective Power Platform.

Liberalization of electricity retail markets
In all European union countries retail markets for electricity are being liberalized. This means that new players can start a retail company and access whole-sale electricity or agree on PPA contracts and then retail that electricity to consumers. In some countries this has already led to retailers with peer2peer type business models. Also whole-sale markets have numerous players and bidding processes are anonymous, preventing incumbent retailers from exerting market power.

Unbundling of network and retail/supply activities
In European countries unbundling regulations have in varying degrees led to separation of utilities into grid operators and retail/supply companies. Regulatory measures prevent the grid operator from any commercial activities to prevent market distortions, as the grid owner has an obvious monopoly. In some countries they are allowed to procure flexibility from grid users to prevent expensive grid investments as the penetration of non-dispatchable renewables is creating in-efficient peaks in the distribution grid. The Collective Power Platform creates and incentivize for prosumers to generate and consumer more efficiently in the local distribution grid, preventing expensive CAPEX investments.

On top of that individual nation states in the European union do have significant room for implementing specific regulations or creating “regulatory niches” where new concepts can be tested.

Competitive landscape analysis

In order to shortly illustrate the uniqueness of the Collective Power Platform compared to other business models in the market, a short illustrative landscape analysis is presented below. We consider two dimensions in comparing the different business models:

Empowering prosumers
Is the business model empowering prosumers to fully take part in energy markets and make their own choices for both consumption and production? This includes access to both whole-sale markets as well as enabling them to trade energy peer2peer.

Cost-reflective incentives
As described in the proposal the transition to renewable energy means that the value of energy can no longer be considered a centralized commodity. Energy has a very specific value for the prosumer and the rest of the system, both differentiated in time as well as locality. Is the business model providing incentives that are cost-reflective for the system and therefore will result in fair and efficient markets?

Energy management systems
Energy management systems are often easy to implement and allow the user to become more aware of its energy use and optimize self-consumption and energy efficiency. However most energy management models do not offer price incentives or allow any trading activity behind the meter.

Energy Cooperatives
Regulatory models differ, but often these cooperatives allow communities of people to invest together in energy production projects. It does allow a community to produce their own electricity, but often works with a flat feed-in tariff and no direct sales to other consumers is allowed.

Peer2Peer business models
New business models that lead to better prices for prosumers. In most models however, there is no time-differentiated price, let alone market incentives to create local energy. This also excludes the power of the community.

Aggregators
Aggregators are often combined with ESCO models, but do no empower him to access energy markets nor trade energy in-between prosumers. Also competitive interests make them less transparent. The contracts they offer are more cost-reflective in the time domain, but are most are aimed mainly at whole-sale markets and don’t evaluate the local value of energy.

Overall we believe that the Collective Power Platform translates a cost-reflective market into meaningful choices for prosumers and the community, empowering them to take smart personal choices for a smart and sustainable energy system.

With kind regards,

Niko and Michiel