Levelized cost of electricity in renewable energy communities: Uncertainty propagation analysis

Abstract

Renewable Energy Communities (RECs) are being deployed all around the World as a technically feasible solution to decreasing users' dependence on fossil fuels. Several demonstration facilities have shown their potential to provide final consumers with clean energy and all associated environmental benefits. However, the economic evaluation of these systems as a whole set is more complex than evaluating generation technologies individually, which can be considered a barrier, and it may be more complicated to calculate its uncertainty with precision. This paper deals with this challenge and adapts a model for the evaluation of the global Levelized Cost of Electricity (LCOE) of a polygeneration microgrid to the characteristics of a typical REC, allowing the assessment of the distribution of the LCOE depending on the uncertainty of the input parameters. Thanks to its simple analytical formulation, the proposed model, that can be used for any combination of technologies (both renewable and conventional), provides relevant information on uncertainty propagation in a symbolic way that avoids the need to run numerical simulations or make assumptions on the distribution of the random input parameters. A case study has been presented, considering a typical small electrical REC with photovoltaic plants and micro wind turbines. Although the model can be defined to any market, as a representative example, it has been evaluated according to the current Spanish and Italian regulations, which are analyzed in depth with reference to the scientific literature. Results show that uncertainties in parameter estimates give rise to a very large scatter in the LCOE, pointing out a set of quantities whose role is crucial for a reliable estimate, among which electricity purchase and selling prices, yearly power load, and self-consumption / virtually-shared energy rates stand out.