In progress The Pros and Cons of Industrial Energy Cooperatives

Reference:
ERIM PhD 2015 RSM LIS BIM

Abstract

Technological progress and climate change concerns are disrupting the electric- ity supply chain. These factors stimulate public and private interest in renewable energy sources (RES), electric mobility, and pivoting electricity markets to be more demand-driven. However, the electricity grid has historically been centralized and supply-driven. This was mainly because the supply chain was dependent on large- scale, fossil fuel-based electricity generation. Yet many emergent elements in the electricity grid require that it be decentralized and smart. One organizational form that fosters a decentralized grid and smart information systems is energy coopera- tives. This organizational form appeared in the early years of electricity supply in the early 20th century, and has recently found significant implementation in Ger- many as a platform for aggregating distributed RES from small-scale prosumers within a microgrid. However, there is very little research on how this organizational form would operate in an industrial microgrid. In this work, I propose three studies that delve into this topic. I seek to inform the business and academic communi- ties about the advantages and setbacks that energy cooperatives will experience as results of the transition to a decentralized, clean electricity grid.

Keywords

energy cooperatives, sustainability, microgrids, electricity markets

Time frame

2015 - 2019

Topic

Business Information Management

The research in this theme aims to understand the usage and impact of advanced, next generation information systems on firm and supply chain performance. The overall supply chain performance will be partly determined by the quality (in terms of availability, reliability, timing) of information and communication of the different firms in the supply chain and their information systems. Next generation information systems are characterized by taking into account real time and detailed data (so called big data), incorporate autonomous decision making, collaboration and learning capabilities (for example by using software agents), and explores the opportunities of new information technology concepts such as cloud computing, sentiment analysis, semantic web technology and business analytics. The focus of the research is on inter-organisational information exchange among different firms in supply chains and its impact on decision-making and performance.

 

Theme 1:  Design of a Sustainable Smart Electricity Market

 

There is a growing scientific and societal interest in many aspects of future energy business. A key challenge is how to facilitate the transition from traditional to renewable energy, and how to promote and support the consumption of sustainable energy in markets with dynamic prices. Currently, most energy markets employ fixed energy tariffs, and energy consumption in such systems is relatively insensitive to the height of energy prices. Due to current developments aimed at allowing for sustainable energy resources that usually fluctuate in terms of supply, this situation is likely to fundamentally change. Flexible energy tariffs -- that fluctuate to reflect the state of the energy market at the time -- have been put forward as a means to cope with the imbalances in the future energy market. For individual households, fluctuations in energy pricing may revolutionize the ways in which they consume and deal with energy, because they may receive higher energy bills than before, or be temporary disconnected at times due to unforeseen overload, but also can move their energy consumption to time windows with a low energy demand. These developments in the energy market raise the need to design smart markets mechanisms that achieve efficient, robust, and sustainable outcomes given the collective and individual preferences of market participants and the social context.  Research will be carried out in collaboration with the Power Trading Agent Competition (TAC) community, a state-of-the-art computational simulation platform for sustainable energy market research. For further information: prof.dr. Wolfgang Ketter: wketter@rsm.nl and prof.dr ir Eric van Heck: evanheck@rsm.nl

 

Theme 2: Next Generation Decision Support Systems in Online Markets  

 

Because the human mind has limited cognitive capacity, humans tend to make decisions using rules of thumb, or heuristics, which stem from their own experiences. While these heuristics may be appropriate for the decision maker’s environment, they usually result in only satisfactory, rather than optimal, decisions. As such, there is ample room for improvement. An important area of study within the overlapping fields of artificial intelligence and cognitive psychology is the design and implementation of (artificially) intelligent agents (i.e., software) that can effectively assist humans with their decision-making efforts, particularly in information-rich and time critical environments like markets. This theme calls for a quantitative approach to the future trading and decision-support.

 

The need for real-time decision-making arises in many different domains from deciding dynamic change of parameters in online auctions to making decisions in the flower markets. In this research, we envision a novel decision support framework where highly personalized software agents gather and analyze information, and recommend or automate decisions at the discretion of human decision makers. Such intelligent agent-based decision support systems will be particularly useful in various online markets where market participants must anticipate and adapt to ever-evolving market conditions at warp-speed and will need to take into account the challenges of the next generation supply chain and logistics. Research will be carried out in cooperation with FloraHolland, the leading global auction platform for flowers and potted plants. For further information: prof.dr ir Eric van Heck: evanheck@rsm.nl and prof.dr. Wolfgang Ketter: wketter@rsm.nl.

Supervisory Team

Eric van Heck
Professor of Information Management and Markets
  • Promotor
Wolfgang Ketter
Professor of Next Generation Information Systems
  • Promotor