1. This project has received funding from the European Union’s Horizon 2020
research and innovation programme under grant agreement N°691689.
Business models for renewable
energy aggregators
Andreas Fleischhacker, Daniel Schwabeneder
Energy Economics Group, TU Wien
October 25th, 2017

2. Overview
• Introduction to the BestRES project
• The BestRES methodology
• Evaluation of selected business models
• Summary and Conclusions
30/10/2017 2

3. The BestRES Project
Motivation and Introduction

4. Introduction
• The transformation of the electricity system (e.g.
integration of renewables, e-mobility) increases the need for
system flexibility.
• The uprising issues cannot be tackled by single individual
market participants.
• Within the BestRES project we develop innovative business
models for integration of renewable energy sources by
aggregation.
We defined “Aggregator” as:
“legal entities that aggregate the load or generation of
various demand and/or generation/production units and
aim at optimizing energy supply and consumption either
technically or economically”
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5. The BestRES project partners
30/10/2017 5

6. The BestRES project progress
30/10/2017 6
Start
March 2016
Analysis of Current
Business Models
Development and testing of improved
business models
Implementation and monitoring of
improved business models
Recommendations for the uptake of
the existing market barriers
Aug. 2016 Dez. 2018Feb. 2017
End
Feb. 2019April 2018

7. The BestRES Methodolgy
How do we achieve improved business models for
renewable energy aggregators?

8. Current and Improved Aggregator Business
models within the BestRES project
Combined
Aggregator-
BRP
Combined
Aggregator-
Supplier
Delegated
Aggregator
Aggregator as
Service
Provider
NKW Germany X X X
NKW France X X
NKW Italy X X
NKW Belgium X X X
Good Energy X X X
Oekostrom X X X X
EDP Portugal X X
EDP Spain X X
FOSS X X
30/10/2017 8
(*) NKW … Next Kraftwerke (**) EDP … Energias de Portugal
X … Current Business Model X … Improved Business Model

9. Business model canvas
30/10/2017 9
Key Partner Key
Activities
Key
Resources
Value
Proposition
Customer
Relation-
ships
Channels
Customer
Segments
Cost Structure Revenue Stream
For further information see: Osterwalder et al. 2010,
“Business model generation”, ISBN 978-0470-87641-1.

10. Current Business Model:
Next Kraftwerke Germany
• Next Kraftwerke (NKW) Germany is a Balance
Responsible Party (BRP) in Germany.
• NKW Germany is pooling decentralized generators (PV,
Wind, Biogas, …) and mid-scale customers and
marketing the pool on the day-ahead spot market and
various ancillary markets.
• The key assets are control systems, computer models,
forecast algorithms and administration knowledge.
• Value is generated by offering balancing services and
optimal scheduling of electricity generation, trading
and consumption.
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11. Improved Business Model:
Next Kraftwerke Germany
Supplying „mid-scale“ consumers with time variable
tariffs including grid charges optimization
30/10/2017 11

12. Business model evaluation
• Unit-Commitment Models:
– Optimal dispatch and investment of generation units to meet
the electrical load
– E.g. reducing balancing costs
• Load Management Models:
Optimal dispatch of flexibility (i.e. demand) to minimize costs
• Hybrid Energy Models:
Optimal dispatch and investment strategy of multi-energy
generation and demand
• Game Theoretical Models:
– Investigate the interaction of different players (e.g. owners
and users of flexibility)
– E.g. Mathematical Program with Equilibrium Constraints
(MPEC), Stackelberg game
30/10/2017 12

13. Selected business model examples
Next Kraftwerke, Oekostrom and Good Energy

14. Business model categorization
Within the BestRES project qualitative and preliminary
quantitative analyses have been conducted, in order to
categorize the identified improved business models:
• Group 1: Business models are technically, economically
and regulatory feasible and ready for implementation.
• Group 2: Business models are economically feasible but
face regulatory or technical barriers in the short to
medium term.
• Group 3: Business models are not economically feasible
and / or face substantial regulatory and technical
barriers.
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15. Group 1: NKW Germany
• NKW Germany is already
valorizing flexible
customers at the
wholesale electricity
markets.
• Improvement: Consider
other tariff components
like grid charges in the
optimization algorithm.
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Supplying „mid-scale“ consumers with time variable
tariffs including grid charges optimization

16. Group 1: NKW Germany
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17. Group 2: Oekostrom
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Invest and market distributed generation of customers
in apartment houses
• Improvement: Acquisition of new customers and higher
customer loyalty resulting from local investments.
• Opportunity for renewable investments in urban areas
• The aggregator is in charge of dispatching and
allocating generation and of billing.
• The Austrian government passed a law enabling
distributed generation and distribution in apartment
houses in July 2017.
→ Further details need to be clarified to boost the
implementation.

18. Group 2: Oekostrom
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Battery
PV Plant
Consumer 1
Utility function 𝑢𝑢1
𝐶𝐶
Load 𝑞𝑞𝑡𝑡,1
𝐿𝐿
𝑝𝑝𝑡𝑡
𝐺𝐺
Consumer 𝑁𝑁
Utility function 𝑢𝑢𝑁𝑁
𝐶𝐶
Load 𝑞𝑞𝑡𝑡,𝑁𝑁
𝐿𝐿
Utility
Retailer
Distribution
System
Operator
Wholesale
Market
𝑝𝑝𝑡𝑡
𝑀𝑀𝑀𝑀𝑀𝑀
𝑞𝑞𝑡𝑡,1
𝐺𝐺
𝑞𝑞𝑡𝑡,𝑁𝑁
𝐺𝐺
𝑞𝑞𝑡𝑡
𝐵𝐵𝑖𝑖 𝑖𝑖
Electricity grid
𝑞𝑞𝑡𝑡
𝑃𝑃𝑉𝑉𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼
𝑞𝑞𝑡𝑡,𝑖𝑖
𝐵𝐵𝑜𝑜𝑜𝑜𝑜𝑜
𝑞𝑞𝑡𝑡,1
𝑃𝑃𝑃𝑃
+ 𝑞𝑞𝑡𝑡,1
𝐵𝐵𝑜𝑜𝑜𝑜𝑜𝑜
𝑞𝑞𝑡𝑡,𝑁𝑁
𝑃𝑃𝑃𝑃
+ 𝑞𝑞𝑡𝑡,𝑁𝑁
𝐵𝐵𝑜𝑜𝑜𝑜𝑜𝑜
�𝑞𝑞𝑡𝑡
𝑃𝑃𝑃𝑃
Owner
of distributed
generation
Consumers
Aggregation
of distributed
generation
and
consumption

19. Group 3: Good Energy
“Peer-to-peer” energy matching
• Uniting customers and generators on a local level to
create value for both.
• Currently facing significant legal
and regulatory barriers.
30/10/2017 19
Source: piclo.co.uk

20. Summary and Conclusions

21. Summary
• 13 improved business models have been developed and
categorized.
• Seven business models have been allocated into
Group 1 and are currently being implemented in real-
life within the BestRES project.
• Two business models have been allocated to Group 2
and will not be implemented but simulated.
• The remaining four business models are allocated to
Group 3 due to economic infeasibility or major
regulatory barriers (no implementation, simulation
only).
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22. Conclusions
• Possible aggregator business models are manifold.
• EU regulation (e.g. “Winterpackage) is expected to
boost the implementation of aggregator business
models.
• Business models not being in Group 1 is mainly caused
by legal and regulatory barriers.
• Comprehensive analysis (economic, technical and
regulatory) is essential for business model
implementation.  Requires multiple tools.
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23. Thank you for your attention!
Andreas Fleischhacker, Daniel Schwabeneder
fleischhacker@eeg.tuwien.ac.at
schwabeneder@eeg-tuwien.ac.at
Energy Economics Group, TU Wien