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Review

The Importance of Energy Prosumers for Affordable and Clean Energy Development: A Review of the Literature from the Viewpoints of Management and Policy

by
Jin-Li Hu
* and
Min-Yueh Chuang
Institute of Business and Management, College of Management, National Yang Ming Chiao Tung University, Taipei City 10044, Taiwan
*
Author to whom correspondence should be addressed.
Energies 2023, 16(17), 6270; https://doi.org/10.3390/en16176270
Submission received: 15 July 2023 / Revised: 15 August 2023 / Accepted: 26 August 2023 / Published: 29 August 2023
(This article belongs to the Section C: Energy Economics and Policy)
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Abstract

:
The release of greenhouse gases has led to increases in global temperatures and triggered an unprecedented array of environmental disasters. The aim of net-zero emissions is to increase the share of the world’s energy supplied by renewable sources as well as to influence consumer behavior to improve the balance between energy supply and demand. Appropriate energy policies can encourage consumers to take a proactive role in the transition to more sustainable forms of energy. Given the circumstances, an increasing number of demand-side users now function as prosumers who produce, store, consume, utilize, and manage energy. To understand the state of the energy prosumers’ business model in this changing sector, a review of the literature related to energy prosumers is made, with a focus on energy efficiency, net-zero emissions, Sustainable Development Goal 7 (SDG 7), energy management efficiency, and Energy prosumer systems. The purposes of this review are (1) to explore the shared models of the energy prosumers, (2) to gain insight into the energy prosumer in different areas, and (3) to identify any gaps in the energy management efficiency research. Finally, we examine the major difference between energy prosumers and their respective relationships to energy sources. The results reveal that for energy prosumer systems, there is still some room regarding how they will financially, equitably, and efficiently adapt to the impact of the new increased renewable energy prosumer business model.

1. Introduction

In economics, the consumer has been defined as the person who uses goods and services to satisfy their needs, whereas the producer is the provider of such goods and services [1]. However, in the new model for energy production, a new term has been coined, the ‘prosumer’, which describes those who become energy producers and consumers at the same time [2]. The emergence of the energy prosumer not only necessitates the development of new business models but also effectively helps in the promotion of the circular economy [3,4].
The term prosumer was first used by Toffler [5] in his masterpiece, The Third Wave, to mean a person who is both a producer as well as a consumer. Later, it became popularized as a business model [5]. However, the prosumer phenomenon already exists in some industries [6,7,8]. For instance, in the financial sector, those requesting loans are also providers of funds through savings deposits with the bank [8,9]. In the agricultural industry, people are not only producers of agricultural goods but also consumers of agricultural goods, consuming feed, organic fertilizers, and seeds [9,10,11]. An energy prosumer also produces and consumes energy at the same time. Pieńkowski [12] mentions four types of energy prosumers: residential, community/co-op, commercial, and public prosumers. These energy prosumers provide electricity, which is fed into the grid, while they also consume electricity supplied from the grid but generated by other suppliers [13,14]. The energy consumer/producer business model is an inclusive model that allows various kinds of energy consumers to also become energy producers [12,15].
Energy prosumers have been important in facilitating the energy transition towards more sustainable types of production. The process of energy prosumption describes citizen participation in the energy market and leads to a remodeling of future energy features [13,16]. According to the European Environment Agency [13], the types of prosuming in Europe include individual investment (on-site), collective prosumers in one building, community investment, and participation in company-led projects.
The energy prosumer is an important driving force for achieving the target of 100% renewable energy (RE100). Taking Finland as an example, Child et al. [17] pointed out that by 2050, prosumers could self-generate up to 26% of the electricity consumed. Both individuals and groups can choose to become energy prosumers, contributing their efforts to achieving the goal of RE100.
The UN’s 7th Sustainable Development Goal (SDG) is aimed at ensuring that everyone has access to affordable sources of clean energy [18]. Energy prosumption, which allows individuals, communities, small and medium enterprises (SMEs), etc., to generate electricity, especially from renewable energy, is an important and effective measure towards achieving this [18]. Thus, energy prosumption is inclusive, meaning that the regional energy market will no longer be monopolized by large power plants.
The transition towards greater sustainability and less dependence on fossil fuels naturally affects all sectors of the economy and dimensions of society [19,20,21]. However, switching to green energy does not always lead to improved economic sustainability [22] because it requires increasingly complex processes, including testing the reliability of the energy supply network and determining the impact of energy on production costs, which will have an impact on people’s purchasing power and production growth rates [22,23]. Hence, a complete transformation of the energy-related economy is required, affecting not only the way electricity is produced and transported but also the restructuring of the way other businesses operate under the goal of net-zero emissions [19]. To reach carbon neutrality by 2050, the energy systems of many regions must increasingly shift towards renewable sources and decentralized configurations to support both the consumption and production of renewable energy [24,25].
However, the progress so far in realizing the assumptions of the green economy shows clearly that success is dependent on several diverse factors [26,27]. In the Net Zero 2050 scenario, each country and region must spend to reduce emissions and develop low-emission energy sources to support local economic growth. Investment needs vary widely across the region due to differences in national economies, and decarbonization cannot occur at the same pace in all areas [28,29]. Although some global policies have been formulated to encourage the trend towards net-zero emissions by 2050, the sustainable development programs for each country will have some unique features and require the adjustment of different methods depending upon the starting point of their green and clean energy infrastructure, natural resource potential, and demographic and social characteristics [30,31].
The four pillars of green transformation are carbon pricing, sustainable investment, and industrial policy [32]. This can be accomplished through technological progress and effective use of available resources [20]. The adoption of energy-saving techniques and the expansion of the use of renewable energy sources are crucial [33]. However, these changes are also made possible by the presentation of modern advances and forms within the energy sector and the ceaseless quest for effectiveness and competitiveness [34]. The social transformation from energy consumer to prosumer poses both challenges and opportunities [35]. Under the energy prosumer business model, energy prosumers not only generate and use their own energy but also sell excess self-generated energy to the other units [4,36,37,38].
In a long-term reduction plan, the 26th United Nations Climate Change Conference (COP26) set the goal of limiting global warming to 1.5 °C above preindustrial levels [39]. Wind and solar energy, zero-carbon technologies, and complementary actions across economies are embedded in solutions to improve and meet common global objectives [40]. In addition to the energy prosumer model, other policies are required to ensure a just transition; for example, in addition to varying goals between wealthy and less wealthy nations, the provision of appropriate allowances to lessen the potential socio-economic effects of moving towards low-carbon energy sources depending upon the group [41].
Net zero is aligned with the broader Sustainable Development Goals, including socio-ecological sustainability and economic opportunities [42]. To achieve net-zero targets, industrialized systems must make an effort to change their energy sources to low-carbon options [41,43]. However, the rapidity of the rate of transition to clean energy is heavily determined by access to funds and the cost of the available solutions [43,44]. Over the past ten years, the emergence of prosumers in the energy sector has been facilitated by the development of accessible renewable energy technologies like solar power, hydrogen energy, etc. [31,45,46].
The new energy strategy of the European Union (EU) promotes dependence upon energy prosumers and decentralized energy systems [12,47]. The effects on society under the 2050 net-zero emission trend will be diverse, but the business model involves the development of networks of energy prosumers supplying affordable and clean energy [4,36,48]. Therefore, the focus is on the energy prosumer in our review of the energy transition literature from the socio-economic and policy viewpoints. This review is meant to provide relevant information about existing policies and the current socio-economic situation to further our understanding of the environmental, social, and economic consequences of the energy prosumer business model. Policy measures need to be designed while taking into account all the diverse relationships among energy units, including the supply and the demand side, as well as technical, economic, ecological, social, and funding variables, as the transition is a heterogeneous, locally-specific process [12,49]. Table 1 presents a description of the classification under each category.
This paper reviewed the literature on energy prosumers from the perspectives of energy transition and management, using the Web of Science (WoS), Scopus, and Google Scholar search engines to find relevant academic and energy transition technical documents. The search keywords included ‘energy prosumers’, ‘energy efficiency’, ‘net-zero emissions’, ‘low-carbon energy’, ‘socio-economic’, and ‘SDG 7′. In addition to utilizing the abovementioned keywords, policy reports from major international organizations and public information sites found using the Google Scholar search engine were also downloaded. Pure engineering and natural science papers were not included in this literature review. An outline of the strategic position of energy prosumers based on the literature review is presented in Figure 1.
The conceptual framework derived from the literature review is depicted in Figure 2. It covers the following topics: energy prosumers and energy efficiency, energy prosumers and net-zero emissions, energy prosumers and SDG 7, energy prosumers and energy management efficiency, and the energy prosumer systems. Finally, suggestions are made for future research on energy prosumers from the energy and management viewpoints.

2. Energy Prosumers and Energy Efficiency

Energy efficiency is the practice of using less energy to provide the same amount of useful output from a service. It means using less energy to do the same job, thereby reducing energy costs and pollution [50,51,52,53]. Therefore, energy efficiency improvement can be defined as the practice of reducing energy requirements while achieving the required economic output [54,55]. Most of the existing studies support the argument that the inclusion of energy prosumers helps increase energy efficiency. For example, in two case studies conducted in Pakistan, Mansoor and Paul [56] found that the participation of energy prosumers helped improve energy efficiency due to its nature grounded in green intrinsic motivation (GIM), green thinking (GT), and energy efficiency behavior (EEB).
Encouraging EEB as it relates to efforts to minimize energy consumption to build a more sustainable environment [56,57] has long been considered the preferred way to approach consumers and reduce demand [58]. In line with this trend, consumers are gradually becoming prosumers, offering the power distribution system a range of additional services such as micro-generation, demand reduction, demand response, and energy storage [58].
With the increase in the proportion of renewable energy, increasing energy demand, and increasing energy efficiency, prosumers can participate, contributing to energy efficiency by storing and selling any surplus energy they have produced [59]. Utilizing methods to save energy at the household level is also important. Gajdzik et al. [14] found that prosumers demonstrate a general tendency towards pro-ecological behavior, for example, by installing photovoltaic panels to generate electricity and switching to heat pumps to save electricity.
In a between-country comparison of nine countries and regions, Inês et al. [60] explored the challenges and opportunities of the trend towards collective renewable energy (RE). They found that some countries had a more favorable framework and conditions for the collective prosumer and that the current legal framework in the EU presents clear opportunities for the growth of prosumer collectives.
In terms of information efficiency, the incorporation of larger numbers of prosumers, as well as the two-way flow of energy and information, are the two essential components for adapting energy market structures and operating an intelligent energy system [61]. The development of advanced smart grid technologies allows prosumers to interact closely and flexibly within net-zero energy communities [62,63]. The smart grid acts as an interface between information and communications technology, energy, and urban systems and plays a role in linking these factors [62]. In recent years, the inherent characteristics of automation, standardization, and self-enforcement have led to the development of blockchain technologies and smart contracts, which have the potential to aid in the transition of energy systems [64] as well as improve the energy efficiency of such systems.
Due to its decentralized and cryptographic features, blockchains have unique characteristics among various digital technologies [65,66]. Hwang et al. [36] introduced an energy prosumer service model applying blockchain technology to connect different energy sources to other users and producers. Park et al. [67] suggested implementing a peer-to-peer (P2P) energy trading platform built on blockchain technology to facilitate the effective trading of electricity between prosumers and consumers. This system is designed to promote a sustainable electrical energy transaction ecosystem between prosumers and consumers with smart homes. The technical advantages of blockchain technology are applied to this complex system to manage peer-to-peer energy sharing, transmission, and data storage and build smart contracts between network participants to develop an optimal consensus mechanism within the new power grid [68].
Blockchain technology can connect the flow of information in the energy supply chain, providing all stakeholders with information for decision-making. However, it is important to emphasize that blockchain technology is not a panacea. Therefore, energy system operators and planners should continue to focus on balancing the technological and human elements in the energy industry [68].
In their investigation of the residents’ experience with a smart grid project, Hansen and Hauge [69] found that, as residents gradually gained experience, they became skilled practitioners and prosumers, raising expectations for energy companies that, in bidirectional peer-to-peer energy transactions, passive consumers can become prosumers [70,71]. According to Mahmud et al. [70], the smart grid or Internet of Energy (IoE) makes it easier for prosumers of different types to coordinate and create virtual power plants (VPPs). The energy balance in intelligent buildings can be improved by converting electricity into heat and exporting it. The functionality of intelligent buildings depends on local climatic conditions, user needs, and power grid requirements [72]. Anam et al. [73] explored the key factors for the sustainable development of solar energy. They found that changes in prosumer energy consumption behavior could facilitate the integration of prosumer-based direct-current nano-grid systems into power grids. This would enable more efficient peer-to-peer energy-sharing practices. In other words, energy prosumers play a coordinating role between producer and consumer, enabling improvements in energy communication efficiency [73,74,75].
Sources show that energy efficiency can be improved through technological change and the effects of economic growth and the energy prosumers [76]. Vigna et al. [77] argued that smart buildings are the latest step in the evolution of energy development, acting as active participants and becoming energy consumers at the cluster/energy infrastructure level. Sołtysik et al. [25] examined the impact of proposed changes to prosumer schemes on the level of benefits prosumers receive. They found that prosumers derive the most benefit from participating in mechanisms where unused energy is stored in grid storage and from which they can receive 70% or 80% of the amount stored.
Analyzing the above elements related to energy prosumers and energy efficiency shows that it can be improved by prosumers generating their own power and investing in their own distributed energy resources, like solar, wind, or battery storage, for applications in electrical systems and for smart buildings [72]. Digitalization can also increase energy efficiency through the development of systems that gather, analyze, and apply data to adjust energy consumption [78]. Then, prosumers can sell the excess energy they produce back to the utility company or other units [59]. This can help reduce energy needs and require less energy imports from traditional power plants, which can, in turn, help reduce greenhouse gas emissions and other pollutants, causing less environmental harm [50].

3. Energy Prosumers and Net-Zero Emissions

Thus, it can be said that energy prosumers play a positive role in achieving net-zero emissions [79]. In an analysis of data from Japan, Li et al. [80] found an effective reduction in carbon emissions for energy-prosumer households having an integrated system for real-time energy demand management. This integrated system could effectively and simultaneously manage electricity, heating loads, and cogeneration systems. The prosumer system also has the additional benefits of enhancing the local electricity self-sufficiency ratio and lowering net load fluctuations.
Low-carbon technologies need to be developed and become more competitive to facilitate the energy transition required to meet the net-zero goals by 2050. Companies need to take steps to support research and development and promote technological innovation [81]. There may be changes in the relationship between the utility provider and the customer, given more widely distributed generation and storage capacities and increases in demand [82]. The current business model will also change over time so that the customer is not just a consumer but a ‘prosumer’ [37].
As mentioned above, energy prosumers can be households or business units that produce their own energy through renewable sources such as solar panels and wind turbines [14,75]. Liu et al. [83] examined strategies for managing and optimizing energy usage in the commercial building sector in urban areas based on the estimated installation potential of solar photovoltaics and off-shore wind power. In their management and optimization methodologies, most of the Pareto optimality solutions for net-zero energy could be attained by employing large pumped hydro systems in commercial buildings.
In terms of trading mechanisms, peer-to-peer (P2P) energy trading requires the direct sharing or transfer of energy between more than one grid-connected user, where any excess energy can be transferred and sold to other users through a secure platform [45,84]. Wang et al. [85] proposed a distributed P2P energy transaction method based on the double auction market concept. That integration transformed traditional consumers into prosumers, capable of both producing and consuming energy. Prosumers could take advantage of a distributed energy management model to autonomously determine supply and demand. The price was set with the intention of making the most profits possible, ultimately starting P2P energy transactions in the double auction energy market.
Villa-Arrieta and Sumper [86] developed an innovative model for the economic evaluation of urban energy self-sufficiency. They found that the self-consumption of solar power and the development of a local prosumer marketplace contributed to a decrease in primary energy consumption, energy costs, and CO2 emissions. Other studies have determined that distributed power generation using photovoltaic technology is essential to achieving climate and energy policy objectives.
However, in many situations, the cost of the hydrocarbon fuel needed to manufacture the solar panels or wind turbine components is not taken into account in the introduction of new energy systems and upgrading equipment. The expense of disposing of discarded solar panels and wind turbine blades, which is a huge environmental issue, is also disregarded [87,88,89]. Such costs also need to be included in the examination of the applied technology, economic evaluation, environmental impact, and legal and regulatory requirements [79].
Net-zero strategies can include switching from fossil fuels to renewable energy, developing low-carbon technologies and agricultural practices, encouraging large-scale dietary changes, and increasing the value of food and agricultural waste [81]. From another viewpoint, however, Kilkis [90] argues that the current definitions of net-zero conditions, although important, are not sufficient for sustainable decarbonization efforts. It is also necessary to recognize exergy destruction, as a measure of degradation of resources, as one of the underlying causes of emissions.
In summary, as discussed above, on the path to net-zero emissions, energy prosumers can use renewable sources of energy, such as solar panels or wind turbines, to produce clean energy. They also play a positive role in achieving net-zero emissions by applying real-time energy demand management, which effectively reduces carbon emissions, as well as building more widely distributed generation and storage capacities. However, the initial cost of installing distributed energy resources also needs to be considered, as well as the potential for increased costs for non-prosumers.

4. Energy Prosumers and SDG 7

Sustainable Development Goal 7 (SDG7) calls for “affordable, reliable, sustainable and modern energy for all” [18]. Several policies and legislative initiatives are being put into place in efforts to speed up the transition to a low-carbon, sustainable energy system and, eventually, resolve one of the biggest crises of our time: climate change [91,92]. Therefore, it is more important than ever to increase the penetration of renewable energy sources in the existing power system to enhance the de-carbonization of energy production and help reduce greenhouse gas emissions [91,92,93].
The economics of climate change show that the benefits of taking decisive and early action to reduce greenhouse gas emissions far outweigh the economic costs of inaction [94]. These policies can include public subsidies [95], carbon taxes [96], the utilization of low-carbon infrastructure [48,97,98], and the development of renewable and sustainable sources of energy [99]. It is crucial to shift away from dependence on fossil fuels for energy to renewable energy sources in order to achieve carbon neutrality in the future. This transition can occur through advancements in technology and economics and due to social development, lower costs, and improved living standards [100]. However, most developing countries are consumers of clean technologies rather than innovators or producers [43]. Accordingly, the construction of low-carbon infrastructure, including urban infrastructure, transportation systems, energy infrastructure, and buildings, is important for low-carbon society development [101,102].
As explained earlier, targeting climate change requires reducing energy use by cutting back on electricity, increasing energy efficiency by using more energy-efficient tools and appliances, and switching to sustainable energy systems based on renewable energy sources like solar and wind power [92,103]. With respect to the spatial planning processes, grid-bound energy supply networks and prosumer demand and supply may strengthen the integration of different energy sources into one system. Hence, in order to achieve Sustainable Development Goals, not only do we need to focus on clean and affordable energy but also integrated spatial and energy planning factors [104].
As the world moves towards a low-carbon economy, the effects will be positive and negative [105]. Introducing decentralized energy systems, developing resilient cities and buildings that are more energy efficient, and electrifying the transportation sector requires major changes. Although a change of this magnitude creates pressure, it also creates opportunities [106,107]. The positive side includes job opportunities in green industries and a way for prosumers to integrate their systems efficiently. However, on the other hand, taking solar prosumers as an example, especially those who rent their homes or do not have access to their rooftop solar panels, require net metering and reasonable compensation for their contribution [12,90]. In such cases, without progressive policy frameworks, small-scale solar has limited effects, and the socio-economic benefits for poor households are also limited [108]. The costs of a low-carbon economy and waste recycling afterward also need to be considered [48,96,98].
According to Wuebben et al. [16], there are four pathways for aligning public participation in energy communities with citizen science projects: benefits and values, energy practices, intermediaries, and energy citizenship. To achieve Goal 7, the prosumer units must be diverse, including renewable energy communities, citizen energy communities, collective renewable energy self-consumers [60], and commercial and public prosumers [12]. Energy users, consumers, and prosumers may well argue that existing information, although widespread, is sometimes contradictory and not easy to understand [78,109]. Therefore, it is necessary to further define the role of management efficiency, which will be discussed in the next section.

5. Energy Prosumers and Energy Management Efficiency

There are numerous challenges to developing future renewable, smart grid, exceedingly productive low-carbon energy frameworks [110]. Such frameworks require the effective arrangement and organization of new approaches [62,111]. The concept of the smart grid is complementary to the idea of the energy-information and communications technologies (ICT) framework, which comprises a network of interconnected microgrids with distributed control [62]. As consumers become prosumers, they offer a variety of services to the system, in line with the net-zero trend [58]. Prosumers, in addition to being major stakeholders in the development of future smart grids, must play a crucial role in demand management [2]. Accordingly, efficient energy management is a critical component of the business model for the energy prosumer [2,63,112].
Future low-carbon energy systems will necessarily place a greater emphasis on demand-side management, which will involve consumers offering the grid a variety of auxiliary services such as demand reduction, demand response, energy storage, and microgeneration [58]. The main management factors for the sustainability of prosumer-community management schemes include contribution assessment and motivation schemes, fair distribution of rewards, management skills, and effective communication and negotiation [113,114]. Hence, increasing energy management efficiency enables the improvement of proactive and systematic monitoring, control, and optimization of energy consumption to conserve energy and decrease energy costs.
The growth of distributed generation from different providers, where energy may not be centrally distributed or under central control, creates a challenge for existing energy management systems (EMS) [115]. Dimitroulis and Alamaniotis [112] explored a climate-independent fuzzy logic EMS that incorporates solar and wind generators, battery energy systems (BES), electric vehicle (EV) loads, and dynamic electricity pricing and tariffs. The results demonstrated the effectiveness of the EMS at lowering the prosumer’s electricity bill, with an overall reduction in the monthly bill by more than 40 USD when compared to a linear optimizer and by about 2 USD when compared to a rule-based EMS.
Cui et al. [116] proposed a framework for day-ahead and real-time energy management for prosumers, as well as a technique for intercommunity and intracommunity energy sharing, where, to save time, prosumers exclusively shared energy with their peers in the community and worked together to tackle real-time uncertainties and lower real-time expenses. Yang and Wang [117] combined several methods, including heating, ventilating, and air-conditioning (HVAC) systems, the alternating direction method of multipliers (ADMM), and P2P energy trading to develop a distributed approach for a residential transactive energy system. The results showed that effective energy trading lowered the customers’ peak loads and, on average, reduced the overall energy cost of the system by 23%.
In the smart grid (SG), energy customers can share both energy and information with other energy consumers and the power grid. This facilitates the two-way flow of energy and information between energy consumers and the power grid [118]. The emergence of the SG relies on the active participation of these prosumers, and their interactions may also have a significant impact on its core operations [115]. Therefore, energy consumer management programs are essential for information exchange about energy. The crucial elements of such programs, including smart devices, bidirectional communication facilities, software infrastructure, and a dynamic prosumer base, must be successfully integrated in order for the SG energy-sharing system to operate without a hitch [113].
According to Jiang et al. [119], who examined the economic interactions between community energy managers and photovoltaic prosumers from a cooperative perspective, the Nash bargaining cooperative mode is more advantageous for both the photovoltaic prosumers and the community energy managers than the Stackelberg game method. Si et al. [120] investigated the optimal energy scheduling problems of prosumers based on the complementarity of multi-energy demand using a multi-energy management strategy. They found that, at the compromise solution point, the two prosumers could save 7% and 10% of costs on a summer day and 9% and 11% on a winter day. These results suggest that the implementation of the proposed multi-energy management strategy could create a win-win situation that would successfully address the optimal energy scheduling problem.
Zheng et al. [63] discovered that a P2P operation method using neighborhood-level control could reduce operational costs by 24.6% and net equivalent CO2 emissions by 7.1% in comparison to the traditional peer-to-grid operation. Liu et al. [121] explored peer-to-peer energy trading, management, and optimization strategies for using a renewable energy system and energy storage provided by hydrogen and battery vehicles for the purpose of supplying electricity to a diverse net-zero energy community. They discovered that while battery-integrated systems perform better in terms of grid integration, economics, and the environment, hydrogen vehicle-integrated systems produce greater supply.
Mansouri et al. [122] explored efficient routes for constructing net-zero emission energy systems. They detailed two possibilities: the integrated exploitation of various energy infrastructures in the form of multi-energy systems (MESs) and the evolution of traditional prosumers into smart prosumers. Managing different energy markets becomes a challenge for the operators of MESs. Shandiz et al. [123] discussed a systematic approach to energy master planning (EMP), which would allow communities to access their energy systems based on their values as prosumers rather than just as consumers, giving them more control over the design and performance of the energy system.
In their discussion of the planning and design process of energy infrastructure, Shandiz et al. [124] detailed the challenges to successfully achieving this goal for whole communities. In such systems, energy prosumers can directly trade energy with each other either through peer-to-peer (P2P) trading or as a community via peer-to-community (P2C) trading. Accordingly, an efficient and reliable energy management model is required to handle the issue of demand-supply management between the prosumers and the local energy market. Energy management efficiency tools are also needed for peak demand management [2], contribution assessment and motivation schemes, the fair distribution of rewards, management skills, effective communication and negotiation [113], energy management systems (EMS) [112], real-time energy management [93], and smart devices [113].
However, if prosumer trading systems are poorly structured, it could threaten the reliability of the grid, undermine sensitive privacy protections, and inflate expectations to the point where the prosumer revolution leaves no one satisfied [125]. Simplistic policies and wishful implementation could even lead to the failure of these markets, with critical implications for sustainability, consumer empowerment, and energy innovation efforts [126]. A more informed and cautious perspective is needed [126,127]. Most distributed generation policies do not include specific provisions for prosumer aggregation. Most previous studies point to the benefits of prosumers being able to sell excess energy back to the utility [4,25,128,129]. However, generators are forced to reduce the amount of energy they produce if there is no market for the excess energy, resulting in a profit loss.

6. Energy Prosumer Systems

The development of new technologies, blockchain, international and local policies, and social factors have led to the rise of new types of supply and demand, especially in the energy sector. It is also becoming increasingly difficult to differentiate between energy consumers and producers. The stakeholders in the prosumer system include subscribers, suppliers, consumers, providers, prosumers, peer nodes, and exchange systems [128]. Prosumers may even compete against each other with the aim of maximizing their own profits, increasing the liquidity of the local market [129]. The calculation of the costs and value of participation and the distribution of costs and benefits between stakeholders is complex, given the range of financial arrangements. However, higher participation benefits will increase willingness to participate [130].
The adoption of a blockchain-based platform would facilitate the participation of prosumers, promoting trust and privacy among market participants while eliminating the need for a broker-like aggregator [129]. Some studies have found that the blockchain platform is beneficial because energy transactions are recorded in an immutable and complete record. This allows for more secure and efficient monitoring of community interactions and prosumer activities [131]. The blockchain system would also enable energy prosumers to monetize any surplus energy and register ownership, supporting their integration into a more competitive energy market [128].
However, the pollution costs of the production of equipment prior to use and waste recycling afterward are often ignored when considering the whole life cycle of renewable energy. These costs need to be considered to ensure the sustainability of renewable energy [89,132,133]. For example, it is obvious that wind energy is not totally clean. A wind turbine has an estimated lifetime of 20–25 years. It is predicted that the cumulative composite waste from the blades alone that will be needed to be recycled will be in the tens of thousands of tons worldwide by 2050 [87]. The lifetime of solar panels, on the other hand, is projected to be longer, 20–35 years. The rapid growth in the demand for renewable energy has resulted in the production of millions of metric tons of PV panels each year [134]. In the future, even more end-of-life panels will be produced. Several countries are already having issues with solar waste recycling and disposal [135,136,137]. This issue is evolving, and the disposal of panels after the end of the PV lifetime and other types of e-waste will be a concern in PV system replacement [88,138]. Therefore, it might be possible to avoid some of these recycling problems with the energy prosumer model for the generation of renewable energy. We thus propose the concept of the energy prosumer system, formed through transactions with other prosumers, forming connected units connected and embedded with others in a larger structure.

7. Conclusions

The prosumer market platform enables energy users to become active participants rather than passive consumers. From an energy market perspective, it is essential to create appropriate local market structures to align partner profits with system benefits in order to accommodate the new role of the prosumer. This requires attention to rule sets, pricing, transactions, trading platforms, and pricing mechanisms. Therefore, prosumers should be subject to legal protections to avoid being taken advantage of and misconduct by larger producers, who tend to be better informed and more organized, to safeguard the legal rights and interests of all market participants.
The development of new communication technologies, the interface between these technologies and the user, the rate of technology adoption, and the implementation of cost-effective energy-saving measures are all elements that influence the attractiveness of products and the possibility of consumers becoming prosumers. In addition, management issues need to be considered, including the willingness to change behavior, public support for new policies, and access to funding. These factors are correlated with the economic and environmental benefits of energy prosumers, with equilibrium being the first consideration. Therefore, in order to achieve energy prosumer market equilibrium while moving towards the net zero carbon goal, balanced offers and bids are desirable to attract more active participation from energy prosumers.
By transforming consumers into active prosumers, the economic, operational, and environmental benefits of services such as micro-generation, demand reduction, demand response, and energy storage can be maximized. Under this approach, policies can target prosumers or self-consumers, with decentralized renewable energy production subject to independent regulation. If consumers are clearly identified, subsidies, feed-in tariffs, and other methods of encouraging collective pre-consumption can be more effectively targeted. Prosumers can choose which energy services to reduce, resume, or provide.
This voluntary behavioral choice reduces the risks associated with dealing with prosumers from a demand-side perspective. Finally, the legal and structural forms of energy prosumers should be complemented by the economic dimension. Effective energy management systems can support the optimization of benefits between the supply side, prosumers, and the demand side in the local energy market. This can also effectively improve the relationship with the energy network.
From the perspective of sustainability, to ensure a safe, clean energy supply for the future, to meet the goals of energy efficiency, net zero emissions, SDG 7, and energy management efficiency, prosumers play an important role. Their participation is facilitated by the use of operational mechanisms such as peer-to-peer connections, smart grids, and blockchain platforms for energy production, storage, delivery, and integration with existing energy management systems. However, the large amounts of waste generated by the renewable energy industries, such as solar panels and wind turbine blades, that need to be disposed of must also be considered. The energy prosumer system could help to deal with end-of-life management. Therefore, from the point of view of zero energy waste, the energy prosumer system is not just a single cycle but an infinite loop in a sustainable energy prosumer system.
The economic transformation required to achieve net-zero emissions will be massive in scale and complex in execution. The transition would bring substantial shifts in demand, capital allocation, costs, and jobs. These shifts will be challenging for a wide range of stakeholders, not least because they will be distributed unevenly. This review provides a descriptive basis for further research. However, the formulation of a sufficiently strong theoretical foundation is still needed for practical applications. The literature review with management and policy viewpoints presented in this research could be useful for energy prosumers who want to find sustainable energy solutions that consider all stages of the energy system. However, such assessments are beyond the scope of this research.

Author Contributions

Conceptualization, J.-L.H.; methodology: J.-L.H. software: J.-L.H. validation, J.-L.H. and M.-Y.C.; formal analysis, J.-L.H. and M.-Y.C.; investigation, J.-L.H. and M.-Y.C.; resources, J.-L.H.; data curation: J.-L.H.; writing—original draft preparation, J.-L.H.; writing—review and editing, J.-L.H. and M.-Y.C.; visualization, J.-L.H. supervision, J.-L.H.; and project administration, J.-L.H. All authors have read and agreed to the published version of the manuscript.

Funding

This research was partially funded by Taiwan’s Ministry of Science and Technology (MOST110-2410-H-A49-051).

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

All data are obtained from public sources.

Acknowledgments

The authors would like to thank the three anonymous reviewers for their insightful comments and valuable suggestions on how to improve our study.

Conflicts of Interest

The authors declare no conflict of interest.

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Energies 16 06270 g001
Figure 1. The strategic position of energy prosumers.
Figure 1. The strategic position of energy prosumers.
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Figure 2. Conceptual framework derived from the energy prosumer literature review from the viewpoints of energy and management.
Figure 2. Conceptual framework derived from the energy prosumer literature review from the viewpoints of energy and management.
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Table 1. Description of Classification.
Table 1. Description of Classification.
Energy Prosumer LiteratureDescription
Energy prosumers and energy efficiencyOutlines the research on prosumer relationships in different energy efficiency settings. Systematic energy efficiency is beneficial for further analyzing the behavior and relationships of energy prosumers.
Energy prosumers and net-zero emissionsOutlines prosumer research in this area on the provision of relationships in net-zero emission settings and consideration of the initial cost of installing distributed energy resources and the potential for increased costs.
Energy prosumers and Sustainable Development Goal (SDG) 7Outlines research in this area on the provision of relationships concerning SDG 7.
Energy prosumers and energy management efficiencyOutlines approaches to effectively arranging and organizing efficiency in relation to energy management efficiency.
Energy prosumer systemsDescribes the role of the energy prosumer as derived from the literature review and offers a systematic perspective.
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Hu, J.-L.; Chuang, M.-Y. The Importance of Energy Prosumers for Affordable and Clean Energy Development: A Review of the Literature from the Viewpoints of Management and Policy. Energies 2023, 16, 6270. https://doi.org/10.3390/en16176270

AMA Style

Hu J-L, Chuang M-Y. The Importance of Energy Prosumers for Affordable and Clean Energy Development: A Review of the Literature from the Viewpoints of Management and Policy. Energies. 2023; 16(17):6270. https://doi.org/10.3390/en16176270

Chicago/Turabian Style

Hu, Jin-Li, and Min-Yueh Chuang. 2023. "The Importance of Energy Prosumers for Affordable and Clean Energy Development: A Review of the Literature from the Viewpoints of Management and Policy" Energies 16, no. 17: 6270. https://doi.org/10.3390/en16176270

APA Style

Hu, J.-L., & Chuang, M.-Y. (2023). The Importance of Energy Prosumers for Affordable and Clean Energy Development: A Review of the Literature from the Viewpoints of Management and Policy. Energies, 16(17), 6270. https://doi.org/10.3390/en16176270

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