Prosumers as active market participants: A systematic review of evolution of opportunities, models and challenges

The possibility of onsite production and flexible consumption is transforming consumers from passive users to active service providers in power systems with the large share of renewable energy sources. The prosumer-centric paradigm brings diverse possibilities by introducing real-time (RT) pricing, enabling easy and fast change of the supplier, creating opportunities for aggregation, enabling local energy production and local energy exchange, as well as the provision of ancillary services. The paper brings a comprehensive review of the evolution of the diverse options for prosumer to exploit their potential. It starts with the analysis of models and opportunities for a single end-user who decided to invest in Photovoltaic (PV), electric vehicles, and flexible devices. Aside from the review, the paper challenges the logic of the prosumer responding to dynamic prices and providing power system flexibility and compares it with the logic of lowering only their electricity bill. It further analyses different types of aggregation, such as energy communities or microgrids, combined market participation with RES, but also decentralization models designed to stimulate internal energy exchange and solve network problems locally. Finally, it discusses the possibility of providing service to both Transmission and Distribution System Operator and the complexity such coordination requires when procuring flexibility services from resources connected to the distribution network or aggregated prosumers. In addition to a comprehensive review and discussion, the paper brings easy-to-understand models and belong results for the reviewed cases of a) single prosumer flexibility, b) aggregated multiple flexible prosumers, c) energy community with the possibility of peer-to-peer trading.