An increase in strategic, self-generating renewable energy ‘prosumers’ in the energy market has the potential to lead to ‘death spirals’ for utilities, according to research from the Tokyo University of Science.
Using mathematical modelling of markets, the research found that strategic prosumers – those consumers with rooftop solar, for example, who tailor their energy consumption based on the market conditions – can increase the transmission charge that generators and consumers have to pay to grid utilities and increase the risk of a ‘death spiral’ in the market.
A large 24 panel solar installation in Hemel Hempstead (Image: JT/Tanjent)
A death spiral is the term to describe an increase in self-generation and off-grid assets that in turn cause energy providers to raise their prices, pushing more consumers to become prosumers, which drives the price up further, and so on.
The paper in which the research appears – “Death spiral, transmission charges, and prosumers in the electricity market” – says that the enhanced resilience that distributed prosumer generation can provide to the power sector can also shift the cost of bulk energy use to ‘traditional’ consumers who rely on what the grid provides.