01865 952 700 |
Press enquiries


Home/Distributed and flexible capacity in Germany – Will prosumer or utility scale business models dominate?

Distributed and flexible capacity in Germany – Will prosumer or utility scale business models dominate?

Maturing technologies, high retail power prices, and a replacement of baseload by intermittent capacities will drastically alter the functioning of power markets. These trends create opportunities for new business models, but also threaten existing ones. Understanding them early on can provide a competitive advantage for investors, utilities and innovators over the next decade.

Many developments favour the “prosumer”: Decentral renewables are supported by high retail prices and falling costs of storage and solar PV. Small-scale CHP with an interesting self-consumption business case have additional potential to participate in balancing markets through aggregators, and demand side response can profit from increasing price volatility and regulatory incentives for peak shaving.

On the other hand, maturing technologies can offer flexibility on a utility scale: Large-scale batteries and pumped storage can benefit from price arbitrage and provide balancing services. Peaking plant may benefit from rising price volatility and vNNE, and flexible CHP plants with power-to-heat conversion and heat storage might be-well positioned to benefit from price volatility.

Will utility-scale technologies become the norm for providing flexibility over the next decades, or will distributed technologies dominate?

Assessing the market potential of these options needs to go beyond the wholesale power market and account for revenue streams such as balancing markets, vNNE and self-consumption.

This report presents first results on selected business models answering questions such as:

  • When will decentral technologies such as CHP, solar and batteries reach grid parity and how much build-out potential do they have?
  • Which combination of technology and business model has still potential to be built at utility scale?
  • How will these developments individually affect the various power markets?
View Report

Our subscription services

Our subscription service provides you with long-term market forecasts, strategic insight reports, interactive client forums and access to our market data and analytics platform.

Interested? Please sign up to receive our complimentary monthly summary reports via email. Simply tick which reports you would like to receive.

If you would like further information on a particular subscription service or report please enter further information in the box provided.

  • Commodity prices drive the size and structure of the energy industry perhaps more than any other factor. Long-term commodity price expectations have fallen dramatically across the energy market, and strategies and policies are evolving consistent with these new beliefs. More than $200 billion worth of oil and natural gas assets are currently for sale globally. Coal-to-gas switching in power, which becomes more attractive with falling commodity prices, is firmly on the political agenda in Europe and the US.

    Read More
  • In October 2014, EU leaders agreed on common climate and energy targets for 2030. These included a 40% reduction in GHG emissions relative to 1990 levels, along with targets for renewables deployment and energy efficiency. However, Europe’s main decarbonisation instrument, the EU ETS Phase III, is well out of step with her stated ambitions. The 20% reduction in GHG emissions by 2020 should easily be achieved. However, the 2030 target requires credible commitment to much more stringent policies, particularly in power, where the economics dictate much of the emission reduction burden should be borne.

    Read More
  • Natural gas markets are growing fast on a global level, with more players, increasingly complex rules and mechanisms, and rising global connectivity. In this global context, Europe sits in a unique position, with an escalating import dependency and an ever growing number of suppliers. Increasingly difficult upstream financing, highly political infrastructure developments, and the intricate evolution of gas-for-power demand will drive the future of the European gas market.

    Read More