Electricity supply chain adaption to distributed solar PV sources: electricity suppliers and prosumers. Sweden Case study based on UK framework.

Abstract: Background The Paris Agreement has forced the European Parliament to set a target of 35% renewable energies by 2030. In Sweden, the adaptation of the electricity supply chain to renewable energy production has created new opportunities for the electricity supply chain member. New business models between prosumers and electricity suppliers are currently being developed while the whole management of the grid is evolving. Problem formulation Distributed solar PV facilities installed around the territory are increasing in Sweden. Therefore, the kWh injected into the grid coming from several solar PV sources is affecting the management of the electricity supply chain. This bi-directional electricity flow is challenging the grid in terms of capacity, stability, and efficiency. A description of which is the current situation and what to expect in the future is the main goal of this research project. The relationship between prosumers and electricity suppliers, the last players in the chain value, have to evolve into new business models if small-scale generation and flexibility market is to play a productive role in the future electricity supply chain. Purpose The purpose of this thesis is to analyze and describe how Swedish electricity suppliers are managing the bi-directional electricity flow generated by the increasing installation of distributed solar PV systems. The research project also intends to study which are the possible future business models (incentives, barriers, etc.) of the electricity supply chain between electricity suppliers and prosumers, using the UK framework. Method The research project follows a descriptive – exploratory approach, for achieving a description of the current Swedish electricity supply chain and a further prediction of business models. Therefore, a theoretical framework has been developed using a single case study research - based on the company E.On – to gain a deep knowledge of the topic within the research area. The insights in which the research project is built have a qualitative behavior. Seven interviews have been conducted to achieve a deep understanding of the Swedish electricity market from several stakeholder’s points of view. Conclusions The capacity challenge the Swedish grid is currently having is being faced by reinforcing the grid and making it smarter. A smarter grid will enable the use of flexible tariffs to do better use of the electricity grid, by consuming when there is a high electricity volume circulating and producing when there is a lack of generation. Consequently, the increasing number of solar PV prosumers and the new European legislation has forced the Swedish electricity market to promote business models as the basic prosumer scheme and, at the same time, developing and testing new ones – energy communities. However, incentives for the integration of solar PV facilities to the electricity market play, and will play in the future, the main role for triggering new prosumers to invest. Contribution Nowadays, there is a lack of scientific papers and reports regarding business models development and how it will affect the electricity supply chain in terms of collaboration.Therefore, this research project is a first attempt to contribute this scholar's knowledge of the electricity market from a supply chain point of view.