The Role of Distributed Energy Resources and Associated Business Models in the Decentralised Energy Transition: A Review

Abstract

The shift from large-scale centralised energy systems to smaller scale decentralised systems based on Distributed Energy Resources (DER) is likely to cause a sector-wide replacement of current electricity management practices and business models—creating a new energy paradigm. If handled well, such a transition will not be inherently disruptive; however, it can cause major disruption if long-held views and assumptions are not rapidly reconsidered and renewed, and new supporting structures are not swiftly put in place—hence, if disruption is experienced it will be due to a lack of strategic responses rather than the nature of the technology. This paper clarifies the nature of DERs and outlines key issues and opportunities associated with a range of associated service configurations and business models. The paper outlines key factors affecting the viability of such approaches and identifies leverage points for accelerating uptake. The paper concludes by considering how shifting landscape factors and related opportunities in the coming decades will shape the transition to a decentralised energy system. This paper contains findings from research performed at the Renewable, Affordable, Clean Energy Cooperative Research Centre (RACE CRC) in Australia.