The document discusses the rise of "prosumers", who both produce and consume energy. Prosumers obtain energy from distributed generation sources like rooftop solar panels rather than large utility companies. By 2020, some utilities could lose 50% of their customer demand and revenue as more people become prosumers. New regulations are needed to account for changing energy business models and transactions as prosumers compete to sell excess energy on wholesale markets.

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The Rise of the Prosumers
Date: July 1st
2015;
By Alejandro S. CORE; saenzcore@gmail.com
Key Words:
Prosumer, Utility of the Future, Mini-grids and Smart grids, Distributed Generation, Renewable Energy
Resources, Off-grid Energy, Regulation and Economic Impact
PHOTO COURTESY: DAVID GERAGHTY/NEWS CORP AUSTRALIA
What if some Utilities in Western Europe, Japan, Australia and USA by 2020 lost about 50% of their
demands; and obviously the revenues associated with those operations? The Prosumers are here and
they are looking for Regulatory Solutions!!!
What is a Prosumer?
Producer and consumer: Marshall McLuhan and Barrington Nevitt suggested in their 1972 book Take
Today, (p. 4) that with electric technology, the consumer would become a producer. In the 1980 book,
The Third Wave, futurologist Alvin Toffler coined the term "prosumer" when he predicted that the role
of producers and consumers would begin to blur and merge (even though he described it in his book
Future Shock from 1970).

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In the 1982 book, The Energiewende “The Energy Transition”, the German Institute of Applied Ecology
described the problems that the energy transition faces in Germany and it proposed some solutions
such as “One power plant per company/consumer” using Solar, Wind and Biogas energy.
!n 2013, the Australian CSIRO (Commonwealth Scientific and Industrial Research Organisation)
introduced the Rise of the Prosumers as one of their energy future scenarios for 2050, where consumers
actively design or customise solutions.
After the severe weather event “Sandy” the Public Service Commission of New York State launched in
May 2014 the "Reforming the Energy Vision" program, REV NY.
Since that NY State Leads Radical Changes Toward Distributed Energy…
Are Energy Utilities and Regulators prepared for such disrupted game changers?
The technologies that make up the class of distributed energy resources (DER) are drastically beginning
to proliferate on the grid, mini-grids, rooftop PV Solar and energy storage among other energy efficient
technologies and IT local distribution controllers.
Recall Fukushima Accident, and Ike and Sandy Super Storms? Consumers are looking for resilient
services. Market forces and sentiments, low cost technology advancements, communications, and
controls are making distributed technologies more affordable and accessible, economically viable, and
controllable assets for the grid and their consumers. The resulting changes to the grid will make it more
cleaner, efficient, reliable and resilient, as well as provide end-users with the opportunity to make more
proactive use of energy and to reduce the cost of services, and usually produce more energy than they
consume.
Then, there are currently reverse power flows in the grid, two-ways power flows, do negative cost of
services happen? Yes…
Then who keep the money of the consumer who does not consume but produces electricity? What is
the role of the regulator here?
The Proliferation of distributed energy resources (DER) is scaling up faster,,,Worldwide!
GTM media recently reported that “according to Steve McBee, CEO of NRG Home, and the most
important industry trend over the next decade is the “consumerization of everything.” The energy
industry is on the brink of a shift toward new technologies that optimize customer choice, like rooftop
solar, portable power and electric vehicles -- much in the same way the transport, entertainment and
music industries have been upended by user-oriented services like Uber, YouTube and Spotify…
….From McBee’s perspective, ignoring consumer trends doesn’t help anybody. According to NRG
research, around 18 percent of U.S. energy consumers, around 50 million people, say they want more
control over their energy, and are willing to pay slightly more for tailored products and services. In three
to five years, as millennials become the dominant consumer group, that 18 percent figure could easily
grow to 50 percent.”
World Is Moving to Distributed Energy: 165 GW by 2023
Whether utilities like it or not, the world is moving to decentralized electricity.

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Because of Western Europe's supportive renewable energy policies, utilities there have been struggling
the most, losing hundreds of billions of dollars in market capitalization. In the US, a battle is underway
from the threatened industry trying to hold onto its centralized business model.
"One of the most important issues for the energy industry is striking a balance between distributed
generation growth and fairly compensating utilities for the ability to effectively use the existing electrical
grid as a backup service for onsite power at higher concentrations in the future," says Dexter Gauntlett,
senior research analyst with Navigant Research. "Utilities that proactively engage with their customers
to accommodate distributed generation - and even participate in the market themselves - limit their risk
and stand to benefit the most."
By 2018, Navigant expects new distributed capacity additions worldwide to surpass new centralized
ones, and by 2023, it will eliminate the need for at least 321 GW of new large-scale power plants.
Extremely efficient diesel engines will dominate in the short term, followed by solar PV and natural gas.
What challenges will those changes pose to current providers of electricity? Will the changes lead to
new business models to deliver electricity?
In New South Wales, Australia, the PV rooftop solar installations are flourishing as more households and
companies choose to generate their own power rather than relying entirely on electricity from the grid.
The Regulator planned to launch the US$20 billion auction of Australian power assets over there,
however the sale is uncertain and perhaps canceled since all the off-grid business operating in the area
is eroding the utility potential revenues.
Then, what if some Energy Utilities in Western Europe, Japan, Australia and USA by 2020 lose about 50%
of their light industry, commercial and residential demands; and obviously the revenues associated with
those operations? In addition these former consumers produce electricity and trade it at a wholesale
market through aggregators competing with these same Energy Utilities…
There is certainly a change in business model and economic transactions and rewards, so it is necessary
new regulations.
New regulations should establish the new rules of the game for instance
- Technical standards for control, energy management systems, smart grid, metering, and beyond the
meter equipment
- Technical standards on Multi-Dimensional, Multi-Scale Modeling and Algorithms for Next Generation
Electricity Grids
- Who and when pay for the use of the transmission and distribution grid
- Regulate Energy Back-up services
- Regulate utilities, prosumers, and aggregators or middle men
- Directions on cybersecurity issues
In summary, new regulation and open markets should provide investment certainty and allow these
Prosumers to compete with Utilities and large corporations at the wholesale Market.

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Read more – http://www.slideshare.net/saenzcore/the-rise-of-the-prosumer-july-12015
References:
Wikipedia – accessed on Saturday June 27 2015 - https://en.wikipedia.org/wiki/Prosumer
Craig Morris, and Martin Pehnt. “Energy Transition - The German Energiewende”. The Heinrich Böll
Foundation. Nov 2012 http://energytransition.de/wp-content/themes/boell/pdf/en/German-Energy-
Transition_en.pdf
CSIRO. “Change and choice - The Future Grid Forum’s analysis of Australia’s potential electricity
pathways to 2050”. Dec 2013.
https://publications.csiro.au/rpr/download?pid=csiro:EP1312486&dsid=DS13
NYSPSC. “Reforming the Energy Vision”. Jun 2015.
http://www3.dps.ny.gov/W/PSCWeb.nsf/All/26BE8A93967E604785257CC40066B91A?OpenDocument
GTM Research. “Is the Power Secttor Ready for a New Phase of Complementary Disruption? - according
to Steve McBee…”. June 2015. http://www.greentechmedia.com/articles/read/is-the-power-sector-
ready-for-a-new-phase-of-complimentary-disruption
GTM Research. “First Solar CEO: ‘By 2017, We’ll Be Under $1.00 per Watt Fully Installed’”. June 2015.
http://www.greentechmedia.com/articles/read/First-Solar-CEO-By-2017-Well-be-Under-1.00-Per-Watt-
Fully-Installed
Navigant Research. “Capacity of Distributed Generation is Expected to Double by 2023”. Dec 2014.
http://www.navigantresearch.com/newsroom/the-annual-installed-capacity-of-distributed-generation-
is-expected-to-double-by-2023
Santiago Grijalva. “Research Needs in Multi-Dimensional, Multi-Scale Modeling and Algorithms for Next
Generation Electricity Grids”. Georgia Institute of Technology. Feb 2011.