Intelligent local energy management through market mechanisms: Driving the German energy transition from the bottom-up

Abstract

Energy systems are moving towards more decentralized and distributed architectures, within the ongoing energy transition, which replaces considerable amounts of fossil fuel by renewable generation. As electrical storage is still expensive and difficult to deploy in a massive market, additional means of flexibility, such as those provided through sector-coupling, e.g. by heat storage means, need to be considered. Our approach proposes an intelligently managed energy system at a district level, which has been tested for feasibility in a simulation model. The mechanism is based on a market mechanism, and has only reduced need for ICT by making use of autonomous decision making at each prosumer. First results of the virtual demonstrator show that peak load can be considerably reduced, alleviating the grid; as well as self-consumption increased, providing benefits to the end consumer by reducing its grid dependency. Furthermore, the implementation within the existing regulatory scheme shows economically viable results.