Electricity "Prosumers"

Briefing 11-11-2016

Active energy consumers, often called 'prosumers' because they both consume and produce electricity, could dramatically change the electricity system. Various types of prosumers exist: residential prosumers who produce electricity at home – mainly through solar photovoltaic panels on their rooftops, citizen-led energy cooperatives or housing associations, commercial prosumers whose main business activity is not electricity production, and public institutions like schools or hospitals. The rise in the number of prosumers has been facilitated by the fall in the cost of renewable energy technologies, especially solar panels, which in some Member States produce electricity at a cost that is the same or lower than retail prices. Profitability depends partly on the share of the electricity produced that prosumers can consume themselves. But while this can reduce their bills, it can create problems for traditional energy generators and grid operators. The EU has no specific legislation on prosumers, self-generation or self-consumption, nor a common definition of prosumers. But the Energy Efficiency Directive, the Renewable Energy Directive and Guidelines on State Aid include provisions which relate to small-scale electricity producers. The European Parliament has called for a common operational EU definition of prosumers and for new energy legislation to provide measures for encouraging investment into self-generation capacity.