The value of aggregators in a flexible and decentralized Swiss energy system (AGGREGATE)

Description

In a future electricity system with high shares of renewables and new demand entities, conventional generation alone will not be able to balance supply and demand. Therefore, active participation of distributed energy resources is necessary. Yet, due to imperfect information, bounded rationality, and regulatory barriers, households often do not react to price signals. In this environment, aggregators can play an important role in pooling prosumers to act jointly on power and ancillary services markets. Such aggregation can yield efficiency gains and increase welfare, while regulatory arbitrage must be avoided. In the project, we will first evaluate the regulatory framework and provide a literature overview. Second, we will model the welfare and system impacts of different levels of aggregator participation in a decentralized Swiss energy system. Third, we will assess the market framework for aggregation (costs of supply of and system demand for flexibility) and derive policy conclusions.