Aggregator's business models in residential and service sectors

Abstract

Flexibility coming from consumers in residential and service sectors has received significant attention to deal with uncertainty and variability of renewable energy sources. Since these consumers are too small individually to participate in the electricity markets, their assets can be pooled by an aggregator. The aggregator can implement business models by trading flexibility obtained from these consumers’ assets in different electricity markets. However, the aggregator and the consumers are only motivated to implement a business model, if it is economically feasible. The economic feasibility of a business model depends on (1) financial aspects: how much profit the aggregator makes, and how much money the consumers save, and (2) operational aspects: how the consumers’ assets are operated to increase the financial aspects. This paper aims to provide insights in these operational and financial aspects of the aggregator's business models in residential and service sectors. For this purpose, a literature review is conducted, and a framework is presented to analyze the selected papers on these operational and financial aspects. Based on this analysis, different strategies for the aggregator to implement business models are determined. Moreover, knowledge gaps are identified and several recommendations for future research are provided.