4 Definition of the prosumer term in an energy context
Since the first use of the word ‘prosumer’ in an energy context, the academic literature has accepted and adopted the concept and today there is a whole body of work surrounding the prosumer in the energy context. Unfortunately, most academic contributions use the term ‘prosumer’ very liberally, and often provide only a brief and incomplete definition.
We list a few select definitions, in order to give the reader an idea of the disparity between the different definitions in use in the literature. Jacobs uses ‘prosumer’ as a general term that not only encompasses generation but also other essential grid services, such as storage, grid balancing and demand response.(1) Sharon Jacobs, ‘The Energy Prosumer’ (2017) 43 Ecology LQ 519, 524. Lavrijssen and Carrillo Parra limit themselves to stating that “energy consumers are becoming more active as they are able to produce electricity themselves, for instance by installing solar panels, and supplying it to the energy network, thereby becoming prosumers”,(2) Saskia Lavrijssen and Arturo Carrillo Parra, ‘Radical Prosumer Innovations in the Electricity Sector and the Impact on Prosumer Regulation’ (2017) 9 Sustainability 1207.while later on in the article referring to demand response as a form of prosumption. Ford, Stephenson and Whitaker list several definitions of the prosumer concept from the non-legal energy literature. These definitions are very wide-ranging in scope. They also provide their own definition: “An energy prosumer is a consumer of energy who also produces energy to provide for their needs, and who in the instance of their production exceeding their requirements, will sell, store or trade the surplus energy”(3) Rebecca Ford, Janet Stephenson and Juliet Whitaker, Prosumer collectives: a review (University of Otago 2016).This definition is very detailed and quite restrictive. It also emphasizes the requirement of electricity production to provide for the producer’s own needs, which is not commonly found in other definitions.
Defining a new concept inevitably means abstracting the different elements of the concept to their common core.(4) Tom Ginsburg and Nicholas Stephanopoulos, ‘The Concepts of Law’ (2017) 84 Univ. Chic. Law Rev. 147, 150. As a result, every definition is faced with a tradeoff between broad applicability and concreteness. Because the prosumer is a fundamental participant within the dynamics of the electricity system, on a par with the producer and the consumer, the term should be given a general definition that is able to encompass the various kinds and degrees of possible prosumption. For that reason, we think the best approach is to define prosumption as broadly as possible, all the while ensuring that the concept does not become so broad as to lose its relevance.
The core of the prosumer concept is its negative relationship with the classic producer and consumer concept: the prosumer combines elements of both, and is therefore neither.(5) This is an example of differentiation: Ibid. 154. Being true to the etymological origins of the word, a ‘prosumer’ can be defined as ‘someone who both produces and consumes energy’.(6) This definition is used by the European Commission: European Commission, ‘Staff Working Document: Best Practices on Renewable Energy Self-consumption’ COM (2015) 339 final, 2; The definition is also found in academic literature: Yael Parag and Benjamin Sovacool, ‘Electricity market design for the prosumer era’ (2016) 1 Nat. energy 1; and Peter Kåstel and Bryce Gilroy-Scott, ‘Economics of pooling small local electricity prosumers - LCOE and self-consumption’ (2015) 51 RSER 718, 719. The resulting conceptualization is the following: everyone who only produces energy is a producer, everyone who only consumes energy is a consumer, and everyone who both produces and consumes energy is a prosumer.(7) Regardless of the balance between the two elements: someone who produces a lot but only consumes very little is a prosumer, as is someone who consumes a lot but only produces very little.