The Effectiveness of Energy Cooperatives Operating on the Capacity Market

Jakub Jasiński,Maciej Sołtysik,Mariusz Kozakiewicz

doi:10.3390/en14113226

Jakub Jasiński, Maciej Sołtysik + Show 1 more

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https://doi.org/10.3390/en14113226

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Abstract

The European Green Deal aims to make Europe the world’s first climate-neutral continent by 2050 by shifting to a clean circular economy, combating biodiversity loss and reducing pollution levels. In Poland, whose economy invariably remains one of the most dependent on coal consumption in Europe, institutional responses to the above EU objectives have taken the shape of energy cooperatives aimed at filling the gaps in the development of the civic dimension of energy on a local scale and the use of potential renewable energy sources in rural areas, including in relation to the agricultural sector. This article is a continuation of the authors’ previous research work, which has so far focused on the analysis of the development of profitability of Polish institutions that fit into the European idea of a “local energy community”, which includes energy cooperatives. In this research paper, they present the results of subsequent research work and analyses performed on the basis of it which, on the one hand, complement the previously developed optimization model with variables concerning actual energy storage and, on the other hand, analyze the profitability of the operation of energy cooperatives in the conditions of the “capacity market”. The latter was actually introduced in Poland at the beginning of 2021. The research took account of the characteristics of energy producers and consumers in rural areas of Poland, the legally defined rules for the operation of the capacity market and the institutional conditions for the operation of energy cooperatives that can use the potential of energy storage. A dedicated mathematical model in mixed integer programming technology was used, enriched with respect to previous research, making it possible to optimize the operation of energy cooperative with the use of actual energy storage (batteries). Conclusions from the research and simulation show that the installation of energy storage only partially minimizes the volume of energy drawn from the grid in periods when fees related to the capacity market are in force (which should be avoided due to higher costs for consumers). The analysis also indicates that a key challenge is the proper parameterization of energy storage.

Highlights

Decreasing amounts of raw material and constantly increasing pro-environmental pressure make it necessary to look for solutions to increase the efficiency of the use of resources and the optimization of their use [1]
The need for changes was an effect of the situation in the regulatory and market environment, which resulted in the permanent exclusion of some centrally dispatched generating units that are critical from a Polish Power System (PPS) point of view [35]
The effect of energy storage can be considered on multiple levels

Summary

Introduction

Decreasing amounts of raw material and constantly increasing pro-environmental pressure make it necessary to look for solutions to increase the efficiency of the use of resources and the optimization of their use [1]. An analysis of the short-run marginal cost (SRMC) amounting to about PLN 155–160/MWh (for 2015) for a typical generation system in Poland, i.e., a 200 MW coal-fired power unit, and the average level of wholesale prices on the energy exchange (TGE S.A.) [37], showed that these values were at similar levels. This resulted in the inability to cover the fixed operating costs of the generating unit and a lack of investment impulses for modernization of the existing energy sources and construction of new ones. In 2015, the average operating time of a 200 MW coal-fired power unit was only 3817 h/year (43%)

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