Business Models for an Aggregator : Is an Aggregator economically sustainable on Gotland?

Under the determined impulse of the European Union to limit the environmental impact of energy-related services, the electricity sector will face several challenges in coming years. Integrating renewable energy sources in the distribution networks is certainly one of the most urging issues to be tackled with. The current grid and production structure cannot absorb the high penetration shares anticipated for 2020 without putting at risk the entire system. The innovative concept of smart grid offers promising solutions and interesting implementation possibilities. The objective of the thesis is to specifically study the technical and economic benefits that the creation of an aggregator on the Swedish island of Gotland would imply. Comparing Gotland's power system characteristics to the broad variety of solutions offered by demand side management, wind power integration enhancement by demand response appeared particularly suited. A business case, specifically oriented towards the minimisation of transmission losses by adapting the electric heat load of private households to the local wind production was designed. Numerical simulations have been conducted, evaluating the technical and economic outcomes, along with the environmental benets, under the current conditions on Gotland. Sensitivity analyses were also performed to determine the key parameters for a successful implementation. A prospective scenario for 2020, with the addition of electric vehicles, has finally been simulated to estimate the long term profitability of an aggregator on the island. The simulation results indicate that despite patent technical benefits for the distribution network, the studied service would not be profitable in the current situation on Gotland. This, because the transmission losses through the HVDC-cable concern limited amounts of power that are purchased on a market characterized by relatively cheap prices and low volatility. Besides, the high fixed costs the aggregator has to face to install technical equipment in every household constitutes another barrier to its setting up.