Appraisal of community energy schemes at the early design stage

Abstract

The transition to decentralised, sustainable and decarbonised energy systems and markets is urged by the climate crisis and is enhanced by technological advancements, institutional changes and cost reductions. This transition has serious implications for the energy systems as it spans both the power and end-use sectors and requires more than two-thirds of the energy to come from renewables. In this context, local energy initiatives such as the community energy schemes are emerging that reorganise local energy systems and turn passive consumers into active prosumers. The community energy schemes provide a route to decarbonisation and increased efficiency. They can become a vital part of the energy transition as they are energy generation, distribution, storage and trading structures that focus on communities. They serve the achievement of community objectives for cost savings, emission reductions, energy efficiency and self-sufficiency. Due to the multi-energy character of these schemes, complex physical and commercial interactions are introduced that make their assessment challenging and impose complications on their designing. Particularly in the early stages of project development, there is difficulty in sourcing performance data and system parameters, making the assessment and evaluation of these schemes not effective in practice. In this context, this research proposes a straightforward and reliable way to explore, assess and compare, at the early design stage, the techno-economic options for community energy schemes. A set of linked models were developed that require limited input data and make complex processes accessible for informed decision-making. The reliability of the results is demonstrated using three residential districts as case studies. Different energy technologies and business arrangements for development of community energy schemes in these districts are evaluated, and the uncertainty in the predictions is demonstrated. The research confirms the environmental, technical and financial potential of community energy schemes and shows that 100% reduction of the districts’ CO2e emissions can be achieved by means of improved energy efficiency and use of renewables. The financial viability of the schemes though, is currently not ensured without support. The required support could be in the form of grant (at least 50% of capital cost), cost reductions (higher than 20% reduction of capital cost), subsidisation of renewable heat generation or any combination of them in order to achieve acceptable rates of return. This research also demonstrates that the energy cost savings are a significant determinant of the financial performance and shows that community energy schemes are a valuable way for communities to hedge against fuel price increases. This research also suggests that in some cases combining old and new districts into mixed community energy schemes provides the prospect for improved financial performance. Furthermore, it was demonstrated that the combination of refurbishment and renewables for electricity generation is currently the most efficient design for community energy schemes. However, each community energy scheme is an individual case and this research also shows that the returns greatly depend on the scheme’s configuration and the local conditions. Therefore, bespoke analysis for each case is required using a tool such as the one developed here.