Business Models: Innovation Landscape – IRENA

This brief forms part of the IRENA project “Innovation landscape for a renewablepowered future”, which maps the relevant innovations, identifies the synergies and formulates solutions for integrating high shares of variable renewable energy (VRE) into power systems. The synthesis report, Innovation landscape for a renewable-powered future: Solutions to integrate variable renewables (IRENA, 2019), illustrates the need for synergies among different innovations to create actual solutions. Solutions to drive the uptake of solar and wind power span four broad dimensions of innovation: enabling technologies, business models, market design and system operation.

Along with the main report, the project includes a series of briefs, each covering one of 30 key innovations identified across those four dimensions. The 30 innovations are listed in the figure below.

This brief provides an overview of an innovative business model: aggregators. An aggregator can operate many distributed energy resources (DERs) together, creating a sizeable capacity similar to that of a conventional generator. This aggregation also can be called a “virtual power plant”. Aggregators can then sell electricity or ancillary services via an electricity exchange, in the wholesale market, or through procurement by the system operator. The brief focuses on the various services that aggregators can provide to support power system transformation and the integration of VRE.