Interview — Prosumers and the energy crisis: citizens contributing to Europe’s energy transition

The term prosumers appears to be a growing phenomenon across Europe. What do we mean by ‘prosumption’ exactly?

The term ‘prosumption’ is very broad and the definitions often overlap. In the strictest sense, prosumers are those individuals, institutions, or small businesses that both produce and consume energy. However, we expand the term to cover all those that actively contribute to the energy system, for example, by helping to stabilise the grid using their batteries. Prosumers can act individually or as a collective, for example like in an energy cooperative. 

Our recent EEA report ‘Energy Prosumers in Europe — Citizen participation in the energy transition’ looks at this emerging practice.

What are the key benefits of prosumption compared to large-scale renewable energy plants? What are the drawbacks?

So many to choose from! I will pick just three benefits. First, prosumers are usually less exposed to high energy prices since they often generate part of the energy they consume. Second, many prosumer installations are placed on rooftops, avoiding the need for extra land. Third, these projects are usually funded by households, so they are a good way to mobilise private savings into the energy transition.

There are significant drawbacks, too. One of the main ones is that prosumer projects are often less cost efficient than large-scale projects, simply because of economies of scale. The high upfront cost of some prosumer models is also criticised, since not everyone can afford it.

In the end, I believe the future energy system will be more decentralised, with a mix of large- and small-scale plants connected through a flexible smart grid.

How big of an impact can citizen prosumers have in helping to reduce the negative impacts of the current energy crisis, especially energy bills?

The potential is immense. A household can sometimes cover all their electricity needs by self-generation, especially in combination with batteries and a heat pump. Small-scale projects can usually be implemented relatively quick in response to periods of high energy prices.

In fact, we are seeing a huge demand for solar rooftop panels in the last few months. However, there are some factors limiting the speed at which prosumer projects can be deployed. For example, there are currently supply issues regarding solar panels and their components. Getting a permit can also lead to delays as can the shortage of skills. Of course, not everyone has a rooftop available to be covered by panels.

Is this just based on the use of solar panels by consumers? What other technologies are we talking about?

Solar rooftop is the technology of choice. But some collective prosumers also invest in other technologies such as wind, small hydropower, or district heating.

What EU policies are helping to promote prosumption?

The recast Renewable Energy Directive and Internal Market in Electricity Directive defined various prosumer types and set out detailed rights and obligations for each. But the biggest push for prosumption came last May with the proposed REPowerEU plan and its Solar Rooftop Initiative. This proposal includes a legal obligation to install solar panels in new buildings and encourage countries to cut red tape, provide incentives and advise citizens on how to become prosumers. It is a real game changer.

How easy would it be for an energy consumer to become a ‘prosumer’?

This depends a lot on the prosumer model and there are many of them. For example, someone wanting to install solar panels on their roof should expect a substantial initial investment, together with some planning, permitting and, sometimes, a waiting list for qualified professionals.

On the opposite, joining a large energy cooperative can be almost as easy as changing your energy provider. It varies a lot but reducing these entry barriers is key for a faster adoption of prosumption.

What are the key challenges and hurdles facing prosumers and what can governments do?

A clear, stable, and well-developed policy framework is key. In some countries, prosumption is not properly incorporated in national laws and regulations, creating uncertainty for prospective prosumers. Access to finance and lack of information is often a hurdle too. National or regional authorities can create one-stop-shops were citizens have access to information on technical and regulatory aspects, as well as on the available financial support. Governments should also address the shortage of skills and adapt vocational training to the market needs.

What further work is the EEA doing in this area?

We are currently finalising an EEA briefing, which is a short online assessment we will publish in the coming months, on prosumers and cities. It provides an analysis of the specific factors affecting prosumers in urban areas and how municipalities can support them.

Javier Esparrago

EEA expert on environment and energy

Interview published in EEA newsletter issue 03/2022