Electricity retailers have difficulties to differentiate themselves from each other, dueto increased competition and political regulations. The electric energy tradingmarket is facing a paradigm shift.The purpose of this study has been to investigate how a modern electricity retailercan avoid current and forthcoming difficulties within the market and what directionsthey should choose in order to improve their profitability.The study has been conducted using a quantitative and qualitative approach. Thequantitative approached was used to systematically describe all electricity retailersthat exist today in Sweden and collect data for analyzing how profitable they are.Structured interviews were later conducted in order to gather qualitative data fromthe most interesting companies from the quantitative data collection.From the quantitative approach it was found that selling electricity from guaranteeof origin was approximately two to four times more profitable than selling nuclearand fossil produced electricity. The total profits from electricity trading alone issurprisingly low. From the quantitative data sample, it was shown that 50 per centof the electricity retailers earn less than one million SEK and their averageprofitability is approximately 0.28 million SEK.In the qualitative study it was concluded that those who had succeeded with higherprofits were working with services along with the electricity trading. Examples ofsuch services are charity and loyalty programs. It was stated in the interviews thatthe profits are still low and will remain low if solely rely on electricity trading. Ittakes at least four years for a customer to be profitable. The most promisingsolution to avoid getting stuck in the middle is to expand their business withproducts together with services, servitization. If the electricity retailers shouldexpand their businesses with selling products together with services related toelectricity, servitization, they should also position themselves with a certaincompetitive strategy (cost leadership, differentiation, focus) and target a specificgroup. Groups that have been identified together with these competitive strategiesare those who wants to save money (cost leadership), environmentally friendly /technology enthusiasts (focus) and inbetweeners (differentiation)

In deregulated electricity markets, profit driven electricity retailers compete to supply cheap reliable electricity to electricity consumers, and the electricity consumers have free will to switch between the electricity retailers. The need to maximize the profits of the electricity retailers while minimizing the electricity costs of the electricity consumers has therefore seen a drastic increase in the research of electricity markets. One of the factors that affect the profits of the electricity retailers and the energy cost of the consumers in electricity retail markets is the supply and demand. During high-supply and low-demand periods, the excess electricity if not managed, is wasted. During low-supply high-demand periods, the deficit supply can lead to electricity blackouts or costly electricity because of the volatile electricity wholesale spot market prices. Research studies have shown that electricity retailers can achieve significant profits and reduced electricity costs for their electricity consumers by minimizing the excess electricity and deficit electricity. Existing studies developed load forecasting models that aimed to match electricity supply and electricity demand. These models reached excellent accuracy levels, however due to the high volatility character of load demand and the rise of new electricity consumers, load forecasting alone is unable to mitigate excess and deficit electricity. In other studies, researchers proposed charging the electricity consumers’ batteries with excess electricity during high-supply low-demand periods and supplying their deficit electricity during low-supply high-demand periods. Electricity consumers’ incorporating batteries resulted in minimized excess and deficit electricity, in turn, maximizing the profits for the electricity retailers and minimizing the electricity costs for the electricity consumers. However, the batteries are consumer centric and only provide battery energy for the battery-owned consumer. Electricity consumers without battery energy during low-supply highdemand periods have electricity blackouts or require costly electricity from the electricity wholesale spot market. The peer-to-peer (P2P) energy sharing framework which allows electricity consumers to share their energy resources with one another is a viable solution to allow electricity consumers to share their battery energy. P2P energy sharing is a hot topic in research because of its potential to maximize the electricity retailers’ profits and minimize the electricity consumers’ electricity costs. Due to the increased profits for the electricity retailer and reduced electricity costs for the electricity consumers from implementing battery charging and P2P energy sharing, this dissertation proposes a day-ahead electricity retail market structure in which the electricity retailer supplies consumers’ batteries with excess electricity during high-supply low-demand periods, and during low-supply highdemand periods the electricity retailer discharges the consumers’ batteries to supply their deficit supply or supply their peers’ deficit supply. The electricity retailer aims to maximize its profits and minimize the electricity cost of the electricity consumers in its electricity retail market, by minimizing the excess and deficit electricity. The problem is formulated as a non-linear optimization model and solved using game theory. This dissertation compares the profits of the electricity retailer and electricity costs of the consumers that charge their batteries with excess electricity, discharge their batteries and purchase electricity from their peers to supply their deficit supply, with consumers that only charge their batteries with excess electricity but do not share their battery energy with their peers, consumers that only purchase electricity from their peers to supply their deficit supply but do not employ a battery, and consumers that neither employ a battery nor purchase electricity from their peers to supply their deficit supply. The results show that the consumers that charge their batteries with excess electricity, discharge their batteries and purchase electricity from their peers to supply their deficit supply achieved the lowest electricity cost and highest profits for the electricity retailer. / Dissertation (MEng)--University of Pretoria, 2020. / Electrical, Electronic and Computer Engineering / MEng / Unrestricted