Prosumer Empowerment Through Community Power Purchase Agreements: A Market Design for Swarm Grids

Raluca Dumitrescu*, Alexandra Lüth, Jens Weibezahn, Sebastian Groh

*Corresponding author for this work

Research output: Working paperResearch

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In this paper, we are proposing a policy innovation for both a more sustainable and a more inclusive electrification strategy, particularly for improved energy access in the Global South: combining the extension of national grids whilst taking advantage of existing decentralized renewable energy infrastructure allowing their collective feed-in to the national grid. We are introducing community power purchase agreements as a regulatory instrument for compensating and incentivizing the actors active at the intersection of the two infrastructures (prosumer, grid operator, state utility).We use both a mixed complementarity and a linear model for analyzing the concept in a case study of Pirgacha village, Bangladesh, in which a cluster of solar home system prosumers are interconnected into a renewable energy swarm grid. We determine the energy infrastructure cost components and their split among the actors. The results demonstrate a series of co-benefits: (a) the prosumer is monetarily rewarded for the utilization of her assets and for electricity trading with no additional infrastructure investment; (b) if the state utility takes over the investment costs with the interconnection infrastructure and outsources the integrated grid operations and maintenance to the private sector, the otherwise high grid expansion costs can be saved and repurposed in other infrastructure investments; (c) the operations of the decentralized renewable energy company are no longer threatened by the grid expansion and it can become an Integrated Grid Operator.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherCopenhagen Business School, CBS
Number of pages14
Publication statusPublished - 2021
SeriesWorking Paper / Department of Economics. Copenhagen Business School
SeriesCSEI Working Paper


  • Decentralized renewable energy
  • Swarm grids
  • Grid integration
  • Power purchase agreements
  • Integrated grid operator

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