IEEE Technology and Society Magazine - Spring 2014 - 42

nergy demand is continually rising, worldwide. Most of the
current demand is
met by non-renewable
energy sources, like coal, petroleum, and natural gas. However,
currently, society is faced with the
problem of dwindling and scarce
non-renewable energy resources,
resulting in a shortage of energy.
Moreover, the process of energy
production from non-renewable
sources is increasing greenhouse
gas emissions, leading to unpleasant and potentially dangerous
climatic changes. Therefore, in
today's world, the focus is on inducing users to reduce their household
energy consumption, and shift to
using energy produced from renewable sources, such as solar, water,
and wind. Not only this, but users
are being encouraged to generate
the green energy, and to either store
the surplus for future usage or to
feed it back into the utility grid. In
order to evolve such bidirectional

costs, and various government
regulations, including generous
feed-in tariff schemes. Under such
circumstances, managing prosumers connected to the utility grid has
become pivotal within the energy
sharing network, and the vision of
goal-oriented prosumer community groups is innovative thinking to
fulfil that ideal [2]-[4]. However,
the concept of prosumer community groups is still in its infancy,
and therefore, the existing literature has very little to offer, either
by way of investigating related
concepts or resolving associated
challenges. Therefore in this article
we investigate the key issues and
challenges associated with developing prosumer community groups
and present innovative proposals to
address the identified challenges.

Prosumer Participation
in a Smart-Grid Energy
Sharing Process
In most previous research on prosumer participation, individual

The smart grid has opened up a
new role: that of an economically
motivated "prosumer" in the energy
value network.
energy and information flow, the
concept of the smart-grid has been
proposed [1].
The smart-grid has opened up a
new role: that of an economically
motivated "prosumer" in the energy
value network. The prosumer not
only consumes energy, but also generates green energy and shares the
surplus with the main utility grid or
other energy consumers. In current
society, a massive number of energy
consumers have initiated domestic
green energy production and energy
sharing. The reasons for this trend
include strong societal attitudes in
favor of alleviating negative climatic impacts of carbon emissions,
a desire to decrease electricity
42

prosumers are directly connected
to the smart grid. This facilitates
direct energy sharing between prosumers and the utility grid, and
energy-sharing decisions are made
based on individual perceptions.
One of the apparent disadvantages
of this structure is that individual
prosumers are often excluded from
the wholesale energy market due
to their perceived inefficiency
and unreliability. For example, in
most cases, individual renewable
generators such as solar systems
and wind turbines are too small to
compete effectively in the market
with traditional power generators.
Not only are the prosumers' individual systems too small, but more

importantly, their supply is unpredictable in the sense that it depends
on uncertain climate conditions.
Another common method is
to join a set of prosumers to the
energy sharing process through
dedicated electrical infrastructure in the form of Virtual power
plants (Vpps) or a micro-grid [5].
Here, a Vpp is identified in literature as a large group of distributed
energy resources (DErs) with an
aggregated capacity, analogous to
a typical power plant. Vpps can
communicate with the energy market and also negotiate with other
distributed energy sources. Two
Vpp management architectures
can be identified, namely centralized architecture and decentralized
architecture. In the more common
centralized architecture, grid-connected prosumers are controlled
through a centralized controller. The centralized controller is
responsible for capturing the power
flow information, analyzing it, and
making decisions accordingly to
control the prosumers in the Vpp.
On the contrary, in a decentralized
architecture, agents can act independently without the involvement
of a central controller. The decentralized Vpp enables the participating prosumers to autonomously
perform certain communications
and decision making tasks.
On contrary, the concept of a
micro-grid has emerged in recent
years as a localized connection
of DErs through dedicated infrastructure. This concept appears to
be somewhat similar to that of a
Vpp, but has key differences. The
micro-grids are smaller in size
and concerned with a locality in
operation, while Vpps can vary
from small to large sizes and follow traditional energy sharing on a
large scale. One significant benefit
of micro-grids over Vpps is the
reduced transaction cost as a result
of a lesser number of intermediary
parties. Similar to a utility-grid,
this small-scale version, the microgrid, locally generates, distributes,

IEEE TECHNOLOGY AND SOCIETY MAGAZINE

SprING 2014

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