Abstract
Recently, given the increased integration of renewables and growing uncertainty in demand, the wholesale market price has become highly volatile. Energy communities connected to the main electricity grid may be exposed to this increasing price volatility. Additionally, they may also be exposed to local network congestions, resulting in price spikes. Motivated by this problem, in this paper, we present a coordination mechanism between entities at the distribution grid to reduce price volatility. The mechanism relies on the concept of duality theory in mathematical programming through which explicit constraints can be imposed on the local electricity price. Constraining the dual variable related to price enables the quantification of the demand-side flexibility required to guarantee a certain price limit. We illustrate our approach with a case study of a congested distribution grid and an energy storage system as the source of the required demand-side flexibility. Through detailed simulations, we determine the optimal size and operation of the storage system required to constrain prices. An economic evaluation of the case study shows that the business case for providing the contracted flexibility with the storage system depends strongly on the chosen price limit.
Highlights
Energy communities are a group of consumers that organize themselves to achieve certain objectives
It should be noted that the formulation presented so far is general, and we introduce a new organizational structure that can be implemented for an entire national system or a transmission system operator (TSO)/independent system operator (ISO) area
The efficacy of the proposed coordination mechanism was illustrated by comparing a scenario in which there was no flexibility to a scenario in which flexibility was provided from an energy storage system
Summary
Energy communities are a group of consumers that organize themselves to achieve certain objectives. The topic has received significant attention with the focus of the literature being on techno-economic analysis and institutional arrangements; see, e.g., [1,2]. The objectives that a community may strive for include the reduction of energy costs, the reduction of carbon emissions, or enhancing sustainability [3] As these community based organizations provide a way for consumers to achieve goals that are important for them, they are referred to as being “consumer-centric” [4]. Complete self-sufficiency, is rarely achievable, and a connection to the main grid would be needed in many cases. This means that such a community would still be exposed to possibly volatile wholesale
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