1. Energy Supply Business Model enabled by the Clean Energy Package
Pantelis Capros
Professor of Energy Economics at the National Technical University of Athens
March, 28, 2019
3/28/2019

2. Aims of the Clean Energy Package
Efficiency
Active participation of consumption – demand response
Dynamic pricing – smart metering
Renewables
Based on dramatic drop of costs, move RES in the core market business
RES attractive to demand for certificates of origin
Removal of indirect or direct subsidies to power resources and priorities in the organized markets
Promotion of flexibility resources
Distributed energy resources (DER)
Cost-effectiveness for consumers via bundling of RES, DR and storage at the DSO level
Facilitation of flexibility and balancing enabled by the DER
Aggregators
Facilitation of RES balancing and Power Purchasing Agreements
Facilitation of extracting system services and their value from bundled DER
Market competition
Enhancement of participation in the organized markets
Increase of interconnections’ capacities available to markets
Regional TSOs
Removal of subsidies via capacity mechanisms (unless justified by security of supply)
Demand response
Removal of price caps and floors
3/28/2019

3. Factors supporting transition
Enablers
Economic fundamentals
Regulatory framework allowing participation of new and diverse players
System Infrastructure (smart meters, communication systems, storage, system controls)
Market Infrastructure (transactive platforms, risk hedging instruments, liquidity and transparency, check and balance security)
Accurate data (market data and prices, weather, load and system forecasts)
Avoidance of supply market dominance
Low cost renewables
Access to diverse and low cost balancing resources, including cross-border
Support of clean technology (directly and indirectly)
Socialized funding of system infrastructure
Rewards or standards for efficiency and the exploitation of distributed energy resources
3/28/2019

4. What is the implied business model for energy suppliers?
Incumbent suppliers can no longer block aggregators
Dynamic pricing and smart meters enables active consumer response
The threshold for participation in day-ahead and intraday markets is now less than half a MW
Removal of priorities increase liquidity of wholesale markets
Balancing energy can be found cross-border and competition increases
Limiting subsidies via capacity markets reduce market concentration
Facilitation of supplier switching also reduce market concentration
Transactive platforms without a central clearing house can emerge
Co-existence of conventional suppliers-producers and independent aggregators?
Separated small-scale large-scale business?
Dominance of an Uber-Airbnb business model?
Integrated supply business with a highly diverse portfolio of assets (by resource, origin and scale)?
3/28/2019

5. Enhanced business model of suppliers
Consumer preferences
Supplier’s value
Low cost of energy
Hedging technical and information risks
Monetization of distributed resources (demand response, storage, RES)
Access to transactive market places including aggregation opportunities
Demand for options in the energy supply mix
Low cost energy supply mix with balancing responsibility
Customer engagement and retention
Efficiency and optimization services offered to customers
Non-wires alternatives with community sharing
System services collected from distributed energy resources
3/28/2019

6. Integrated Supply Business Model
Mixed-Assets Portfolio
Aggregation of Demand Response
Aggregation of Community Shared Renewables
Aggregation of Distributed Resources
Cross-border and Power Exchange Trading
Virtual Power Plants (bundled RES and balancing)
Large-scale RES Aggregation
Conventional Flexible Power Plants
3/28/2019