The Benefits of Local Cross-Sector Consumer Ownership Models for the Transition to a Renewable Smart Energy System in Denmark. An Exploratory Study

Abstract

Smart energy systems (SESs), with integrated energy sectors, provide several advantages over single-sector approaches for the development of renewable energy systems. However, cross-sector integration is at an early stage even in areas challenged by the existing high shares of variable renewable energy (VRE). The promotion of cross-sector integration requires institutional incentives and new forms of actor participation and interaction that are suitable to address the organisational challenges of implementing and operating SESs. Taking as the point of departure an empirical case and its institutional context, this article presents an exploratory study of the ability of cross-sector consumer ownership at different locations in the power distribution system to address those challenges in Denmark. The methods comprise interviews of relevant stakeholders and a literature review. The results indicate that distant and local cross-sector integration will be necessary to reduce overinvestments in the grid and that consumer co-ownership of wind turbines and power-to-heat (P2H) units in district heating (DH) systems may provide advantages over common separate ownership with regard to local acceptance and attractiveness of investments. Several possibilities are identified to improve the current institutional incentive system in Denmark. Finally, the results suggest the relevance of analysing the possibility for single-sector energy companies to transition to smart energy companies.