Techno-economic feasibility for residential Local Energy Communities: Case study of Italy

Sammanfattning: The use of renewable energy has proven to be essential for the decarbonisation of the energy system, bringing changes on both the production and consumption side, with an increase of renewable energy in the mix and a change in the role of consumers. From passive actors, Consumers are becoming Prosumers (producers and consumers) of self-generated energy, with the potential of becoming the pillar of the energy sector transition. The European Union set ambitious goals for the realization of a low carbon society by 2050, giving birth to several energy related initiatives. From a regulatory perspective, Europe is indeed paving the way for an internal energy market revolution, that sees the introduction of new actors among which, Local Energy Communities (LEC). In the progressive transition from a centralized to a decentralized system with intelligent and interconnected production sources, consumers are allowed to produce, store, share or resell their energy directly or as energy cooperatives, and can manage demand either independently or through aggregators. In this context Energy Communities take shape. In accordance with the definition given in the European RED directive "Renewable Energy Directive", this study refers to energy communities as a set of energy users who, through cooperatives, non-profit associations, or other legal forms, make common decisions for the satisfaction of their energy needs, with the aim of providing environmental, social and economic benefits. The overall objective of the study is to gain a better understanding of the environmental, grid and social impacts of local energy communities, as well as of the factors that can potentially enable or inhibit the deployment of such communities. The emergence of prosumers and energy communities raise new challenges in terms of technologies and technical requirements for the interaction with the electricity grid, in terms of the need for new business models and new energy policies and regulatory framework, to encourage these new configurations and unlock their benefits as effectively as possible. In the context of this work, a model for the assessment of LECs viability has been built; it examines the consumption and renewable generation loads, with the possibility to measure the effects of adding a battery storage system in the community configuration. The profitability of residential customers participating in a LEC is investigated for four different technological community scenario: (i) solely stand-alone PV plant (ii) stand-alone PV plant with the addition of a solar battery for self-consumption maximization (iii) stand-alone PV plant with the addition of a battery storage system for Demand Side Management behind-the-meter and (iv) stand-alone PV plant with the addition of a battery storage system for Demand Side Management front-of-the-meter. The economic impact of storage on LEC energy usage has been studied while considering the technical aspects of the proposed system. The simulation analysis – based on real residential demand profiles, renewable generation curves, battery energy storage functioning, market pricing and incentives scheme, showed that energy sharing and collective investment in residential scale renewable assets and batteries can be economically feasible, but the economics can significantly fluctuate with changes in parameters such as technology cost, LECs incentives, electricity prices, and that therefore the convenience of one scenario over the others should be verified each time the conditions change. Also, the type of services for which the battery can get revenues may disrupt the conclusions reached. The aim of the work, however, was to build a model easily adaptable to the variation of these parameters, in order to calculate case by case economics and convenience of any possible community configuration.