Article

Economics of pooling small local electricity prosumers—LCOE & self-consumption

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The arrival of small-scale decentralized energy installations coincides with the emergence of so-called " prosumers " —entities/households that are producer and consumer of energy in one. This research focuses on an electricity prosumer model in the context of the UK market. Levelized cost of electricity (LCOE) for photovoltaic (PV) and wind energy will be modeled for six UK sites. Additionally, self-consumption levels for two different load profiles and technologies will be estimated per site. The simulations are modeled with HOMER software and multiple inputs will be varied including: natural resource, equipment cost, maintenance cost, equipment life expectancy, cost of capital, project life and load profiles. The modeled self-consumption levels show significant differences and varied between 31% and 72% depending on load profile itself and RE technologies mixes modeled. The pooling of prosumers implied by lower load profile volatility proved to be beneficial to self-consumption levels in the modeled scenarios, up to 17.6%. LCOE showed significant ranges depending on the input parameters and their combination, 10–55 p/kW h for PV and 2–19 p/kW h for wind. The combination of these factors is decisive for the final LCOE and the negative effects of less benign factors can be compensated by other parameters. When compared to current electricity retail prices of around 15 p/kW h around 97% of wind sites and around 4% of PV scenarios implied LCOE reached grid parity. The self-consumption levels and LCOE analysis indicate the viability of electricity prosumer models.
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... In fact, two households with the same annual demand may require completely different optimal system configurations and achieve very different net present values [16]. Yet, previous research has only partially addressed the heterogeneity of real-world load profiles and its influence on the optimal configuration and economics of PVB systems [17,10]. Many existing studies use synthetic load profile data [18,19,17,20] or average reference profiles [21][22][23] and thus neglect the variability of households' demand [24]. ...
... Yet, previous research has only partially addressed the heterogeneity of real-world load profiles and its influence on the optimal configuration and economics of PVB systems [17,10]. Many existing studies use synthetic load profile data [18,19,17,20] or average reference profiles [21][22][23] and thus neglect the variability of households' demand [24]. ...
... system costs, hardware efficiency, type of battery technology), and individual household-level characteristics (e.g., system orientation, annual demand, load shape). Regarding political boundary conditions, a number of articles assess how electricity retail tariffs [16,32,24,17], interest rates [33,34], and subsidy schemes [27] affect the economic viability of grid-connected residential PVB systems, and others evaluate the role of feed-in tariffs in near-and post-grid parity markets [34,11]. Several studies compare the profitability of PVB systems in different climatic regions and weather conditions within or between countries [35,24,17,27]. ...
Article
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Hightlights: - Techno-economic model analyzing profitability of PV-battery systems. - Heterogeneity analysis based on 4190 real-world load profiles. - Predictor for optimal PV-battery system configuration for individual households. - Large variance in profitability, even for households with comparable annual demand. - Good prediction accuracy with only one month of smart-meter data. Abstract: Technical advances and decreasing costs of photovoltaic (PV) and battery (B) systems are key drivers for the consumer-prosumer transition in many countries. However, the installation of a photovoltaic-battery (PVB) system is not equally profitable for all consumers. This study systematically assesses how heterogeneity in real-world electricity load profiles affects the optimal system configuration and profitability of PVB systems. To that end, we develop a techno-economic simulation model that optimizes the PVB configuration for given electricity load profiles. The analysis uses real-world energy consumption data from 4190 households and is conducted for current electricity rates and weather conditions in Zurich, Switzerland. To account for future price reductions of PV and PVB systems, we conduct a sensitivity analysis that assesses how different cost scenarios influence optimal system configuration and profitability. Finally, we develop and validate a machine learning algorithm that can predict system profitability based only on a limited set of features and on shorter measurement time-frames of smart-meter data. We find that under the current cost scenario (PV: 2000 €/kWp, B: 1000 €/kWh) and without subsidies, about 40% of the analyzed households reach a positive net present value (NPV) for a PV-system, but only for 0.1% of households is the integration of a battery profitable. Under the most optimistic cost scenario for both technologies (PV: 1000 €/kWp, B: 250 €/kWh), 99.9% of the households benefit from the integration of battery storage into their optimal system configuration, with a mean installed PV power of 4.4 kWp and a mean battery size of 9.6 kWh. In all cost scenarios, system profitability varies considerably between households, even for households with comparable total annual demand, primarily due to the hetero-geneity in the load profiles. Thus, being able to identify households for whom the installation is profitable is important. The proposed machine learning algorithm predicts optimal configuration, profitability, self-suffi-ciency, and self-sufficiency ratios with good accuracy, even when only relatively short timeframes of smart-meter data are available. The results of this study are relevant for households making individual investment decisions as well as for utility companies to more effectively identify and approach relevant customers for the installation of PVB systems. Furthermore, the findings enable policymakers to determine the critical levers for increasing private investments into PVB systems in their region and to predict how future developments like component costs will affect the future diffusion of these systems.
... There is also a growing body of literature on prosumers' motivation and ways of engaging with energy [15][16][17][18][19][20][21][22][23][24] and on the gender dimension of solar-power use and prosuming practices [25]. Finally, technical aspects of prosuming [26] have been studied from the perspective of traditional actors in the electricity system: energy producers, system operators and policymakers [20]. ...
... Hansen and Hauge [20] claim prosuming is an idea based on studies about 'the future energy user mainly from the point of view of the traditional actors in the electricity system'. Such studies often focus on technical aspects and related economic or management schemes [26,29,30]. ...
... Several studies address motivations for PV investment, experiences with prosuming technologies and how micro-generation might affect prosumers themselves or the wider system [15,19,[21][22][23]26,41]. For example, PV micro-generation can influence energy practices or foster greater 'energy literacy', as well as clearer expectations towards the energy company [15,20,42]. ...
Article
Solar prosuming is an emerging phenomenon in which many actor groups are involved in shaping new solutions. Here we study national policymakers, relevant stakeholders such as grid companies, and the prosumers themselves and the interconnections between them-to provide a contextualised exploration of positions, perceptions and interconnections that influence prosuming activities. Our 65 in-depth interviews in Norway, 33 of which with pioneering prosumers show that this group is not attracted to prosuming primarily for financial reasons, but for pursuing particular identities. However, our results also indicate that if prosuming were to become more widespread, economic considerations would be central. Further, the interplay among actor groups, mediated through current regulations and technologies, and the related perceptions, affect the uptake and organisation of solar prosuming activities. Third-party market actors such as the solar and building industry play important roles, as do grid companies and municipalities that are expected to facilitate prosuming activities. Given the current policy framework in Norway, we conclude that if increasing prosuming activities becomes a desired political goal, this will require stronger financial incentives for individual prosumers, and a deeper understanding of the interplay among actors across arenas and sectors.
... With the emergence of distributed energy resources (DER), the relevance of so-called "prosumers"-entities/households that are producer and consumer of energy in one-increases [1] [2]. There are different aspects in the context of energy markets and prosumers, which are researched, and which impact each other e.g. the definition of prosumer models and how they fit into the energy market; a highly regulated market framework and how it integrates new market entrants; how new technologies and their characteristics are adapted to; and the economic aspects of energy prosumers. ...
... The economic advantage/disadvantage between the two approaches is measured as difference between the present value of the annual and lifetime cost for a given Figure 3 shows the schematic methodology approach taken. Input data of the Model are based on simulation results described in an earlier paper of the Authors which describes the site selection process, the LCOE and self-consumption level calculation [1]. ...
... Graphic representation of the Prosumer-Model. Self-produced electricity is first directly consumed at household level, than shared at local prosumer pool level and as last resort the National Grid is used to balance any remaining excess supply/demand [1]. ...
Article
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This paper analyses the economics of pooling small UK based local electricity prosumers with back-up access to the National Grid and compares it to the current conventional UK electricity supply model—business as usual (BAU) approach. This is contextualized against the UK energy market framework, prosumer research and changing energy market dynamics. For the economic assessment a three-tiered production/supply and consumption model is developed based on site specific levelized cost of electricity (LCOE) and other cost parameter to operate the model. Modeling results indicated the economic feasibility and advantage of a prosumer approach in a significant number of modeling scenarios. Additionally, a break-even analysis for the two approach-es was undertaken to understand the sensitivity of individual input parameters. Keywords: Energy-Prosumer, Decentralized Energy, Economics, LCOE
... An increase in profitability was witnessed when self-consumption was considered. Self-consumption concept motivates prosumers to invest in solar PV technology with a perspective that self-produced energy is cheaper than buying from the utility [16]. ...
... Another study has reported that BESS could help increase self-consumption by 20 -50% of annual solar energy generated in the Swedish households [20]. In UK, incorporation of BESS to solar PV systems was reported to result in about 17.6% increase in selfconsumption [16]. It should also be noted that self-consumption is sensitive to load demand profile [16]. ...
... In UK, incorporation of BESS to solar PV systems was reported to result in about 17.6% increase in selfconsumption [16]. It should also be noted that self-consumption is sensitive to load demand profile [16]. The concept of self-consumption enhancement has recently become a point of attention for several researchers and has been covered in other studies such as [12,21,22]. ...
Article
A store-on grid scheme model is proposed to facilitate grid-tied rooftop solar photovoltaic (PV) systems implementation in developing countries. Using Uganda as a case study, the proposed model’s costs analysis results were compared to time of use rating model for energy consumption results of an industry by considering solar PV system performance and daily energy demand. The proposed model’s results revealed that the prosumer should be charged a fee of 5.14 ¢/kWh by the grid operator for storing solar PV generated energy on battery energy storage system. Also, the utility operator could sellback energy to the prosumer at 17.03 ¢/kWh under the proposed model. Comparison of the models’ results revealed that the proposed model reduces the energy costs of the prosumer by about 12.5% compared to under time of use rating model. Also, implementation of rooftop solar PV by an industry could guarantee energy security by meeting about 84% of the annual energy demand by using solar PV energy generated. Also, under the proposed model, the prosumer could feed about 20% of total annual generated solar PV energy to the grid. The proposed SoG model is replicable and applicable to any location worldwide with the utilization of the appropriate datasets.
... Provider-consumer relationships [16,36,[60][61][62][63][64][65][66][67][68][69][70][71][72] Consumer engagement [5,14,36,56,[73][74][75][76][77][78][79][80][81][82] Socio-Economic-technological aspect [18,28,46,74,76,80,81, This paper is structured as follows: Section 2 discusses the latest progress in the area of prosumer based smart grids focusing on prosumer communities and prosumer relationships. Section 3 outlines the future work and Section 4 concludes the paper. ...
... There are several ways to integrate energy systems (such as virtual power plants or VPPs, community grids, energy hubs, PCGs, and community energy systems) and various issues and trends influencing the development of ICESs [18]. Some of these issues are intermittent local energy generation [46], local balancing of supply and demand [47], community engagement [4,10,12], split-incentive problem [48], trust, motivation and continuity [49]. ...
... This section outlines the latest research related to managing the prosumer relationship. This includes a number of aspects such as provider-consumer relationship [16,36,[60][61][62][63][64][65][66][67][68][69][70][71][72], consumer engagement [5,14,36,56,[73][74][75][76][77][78][79][80][81][82], and socio-economic-technological aspect [18,28,46,74,76,80,81,. We will elaborate each of these aspects in further detail in the subsequent sections. ...
Article
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Smart grids are robust, self-healing networks that allow bidirectional propagation of energy and information within the utility grid. This introduces a new type of energy user who consumes, produces, stores and shares energy with other grid users. Such a user is called a “prosumer.” Prosumers’ participation in the smart grid is critical for the sustainability and long-term efficiency of the energy sharing process. Thus, prosumer management has attracted increasing attention among researchers in recent years. This paper systematically examines the literature on prosumer community based smart grid by reviewing relevant literature published from 2009 to 2018 in reputed energy and technology journals. We specifically focus on two dimensions namely prosumer community groups and prosumer relationships. Based on the evaluated literature, we present eight propositions and thoroughly describe several future research directions.
... Three papers have been published in 2014 and one in 2015 as shown in Table 6. Here we found that Brusco et al. [6] paper was not cited by other three papers in this cluster (see Pillai et al. [36], Velik and Nicolay [56] and Kastel and Gilroy-Scott [22] represented by 118, 127 and 183 numbers in Figure 2). But Pillai et al. [36] and Velik and Nicolay [56] papers were cited by Kastel and Gilroy-Scott [22] in this cluster. ...
... Here we found that Brusco et al. [6] paper was not cited by other three papers in this cluster (see Pillai et al. [36], Velik and Nicolay [56] and Kastel and Gilroy-Scott [22] represented by 118, 127 and 183 numbers in Figure 2). But Pillai et al. [36] and Velik and Nicolay [56] papers were cited by Kastel and Gilroy-Scott [22] in this cluster. The content analysis also revealed that authors have mentioned similar keywords in these three papers; e.g. ...
... Furthermore, we found that Kastel and Gilroy-Scott [22] paper also cited Ritzer and Jurgenson [45] paper which is purely related to Business and Sociology cluster therefore authors found that these two clusters are slightly overlapped with each other. At this stage, authors conducted content analysis (titles, keywords and abstract) of underlying papers to explore that which paper is the part of which cluster and this conventional but rigorous method has been used by previous studies (see Apriliyanti and Alon [1] Van Raan [55]). ...
Article
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The purpose of this paper is to explore research clusters in Prosumption field through co-citation analysis. This study enriches our understanding by systematically reviewing Prosumption articles extracted from Web of Science (WoS) database at January 10, 2018, and consequently, we found only 350 publications. Co-citation analysis approach was applied for investigating research topics and identifying influential entities for the last 20 years with two bibliometric analysis tools, i.e., HistCite and VOSviewer. In total, we analyzed 350 articles and found three research clusters in prosumption; (1) Business and Sociology (2) Energy and Power grid and (3) Energy and Economy. But before exploring research clusters, we used HistCite to determine most influential authors, articles, journals, institutions, and countries in Prosumption field. Results indicated that prosumption is new and emerging field as academia focused their attention just a decade before. This bibliometric analysis reveals important gaps in the existing knowledge on prosumption and identifies relevant areas for future research.
... Compared to other RES, solar photovoltaic (PV) power plants have a large potential for electricity generation and represent a milestone in the pathway from a fossil-based to a carbon-neutral power sector [8]. In recent years, a large market penetration of PV plants occurred due to price reductions by over 80% from 2008 to 2016 in most competitive markets [9] and to policy incentives [10,11]. PV already reached cost competitiveness in 2012 in several EU regions (e.g. ...
... • The PV plant lifetime T u is 25 years [10] and its residual life is T r = 20 < T u . ...
... and p 0 (t = 0) = 54 €/MWh 8 . • Based on Ciabattoni et al. [66], Kastel and Gilroy-Scott [10] and Cucchiella et al. [5], we set n = 0.4. In addition, according to literature we assume that selfconsumption increases by 15%, 20% and 30% points respectively with a battery storage capacity of 0.5, 1.0 and 1.5 kWh per installed kW PV power, respectively [4,18,41]. ...
Conference Paper
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In this paper, we investigate whether investments in battery storage systems, coupled with existing PV plants, are profitable in the phasing out of incentives. In detail, we analyze the investment decision of a household, who has already invested in a PV plant and has to decide whether and when to invest in the adoption of battery storage systems (BSS). We provide a Real Option Model to determine the value of the opportunity to invest and its optimal timing. The existing PV plant gives the household the opportunity to invest in BSS adoption, and this opportunity is analogous to a call option. Our findings show that negative NPV investments may turn to be profitable if the household optimally exercises the option to defer. The greater the volatility of energy prices, the greater the option value to defer, and the greater the opportunity cost of waiting (i.e., the greater the energy prices drift), the smaller the option value to defer.
... Similarly, excess supply of electricity by a certain prosumer, after its demand has been met, first considers other prosumers before supplying to the grid or external loads. [7]. [8] demonstrates the intricacies in the energy management of a 6-bus DC prosumer microgrid with a utility-scale storage system installed to handle uncertainties in power imported to and from the grid. ...
... This provides a more realistic estimate and makes allowance for slight variations due to sudden changes in demand or supply from the prosumer. This forecast error for prosumers is denoted by as shown in (7). The sum of all forecast errors is allowed to vary between a minimum value of and a maximum value of as shown in (8) and (9) ...
... Prosumer research has largely focused upon the perspectives of 'traditional actors' in the energy system (Hansen & Hauge, 2017), i.e. grid operators and policy makers, thus covering technical aspects (e.g. Oliveira, Antonio, Burani, &Udaeta, 2017 andKästel &Gilroy-Scott, 2015) and management schemes (e.g. Parag & Sovacool, 2016;Kaufmann, Kuenzel, &Loock, 2013, andSchleicher-Tappeser, 2012). ...
... Prosumer research has largely focused upon the perspectives of 'traditional actors' in the energy system (Hansen & Hauge, 2017), i.e. grid operators and policy makers, thus covering technical aspects (e.g. Oliveira, Antonio, Burani, &Udaeta, 2017 andKästel &Gilroy-Scott, 2015) and management schemes (e.g. Parag & Sovacool, 2016;Kaufmann, Kuenzel, &Loock, 2013, andSchleicher-Tappeser, 2012). ...
Article
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Worldwide, the number of electricity end-users who produce electricity and feed it to the grid is rapidly increasing. The term ‘prosumer’ is often used to denote this group. Following innovations in policy, technology (e.g. inverters, smart meters), tariffing and subsidy schemes, solar panels (PV – photovoltaic) connected to the grid have entered the electricity systems in many countries such as the UK and Germany. Consumers’ increasing drive for self-production has also supported this trend. Norway is an exceptional case. Because electricity production is mainly based on hydropower, solar power does not form a significant part of the government’s vision of the country’s future energy mix for electricity. As a result, governance is limited to prosumer regulations that make it possible to become prosumers in a relatively simple way, but policies and regulations do not actively encourage growth in this market, which is largely demand driven. The first registered prosumer in Norway was connected in 2011, and today the number has reached 700 (population ca 5 million), hence the market is slowly increasing. In this context of pioneering prosumer activities in Norway, this study draws on material from 29 in-depth interviews with prosumers located across the country. The objective is to examine people’s rationales for investing in solar power and how they use this technology to signal identity. We draw on consumption and domestication theory as well as anthropological and practice-oriented approaches to energy use. The results show that at present there are three groups of prosumers in Norway who have followed distinct paths towards household solar electricity. We denote the groups as ‘individual prosumers’ (who have taken the initiative to install solar PV), ‘smart house dwellers’ and ‘ecovillagers’, respectively. All three share an emphasis on self-consumption in terms of maximising electricity use in periods with sunshine. They also make use of solar technology to signal identity. However, the three groups’ underlying values and ‘styles of prosuming’ differ. The individual prosumers, who are largely men, emphasise their interest in testing the new technology. The smart house dwellers stress the ‘modern’ aspect of PV technology and refer to the high level of comfort provided this particular type of housing. The ecovillagers are primarily concerned with environmentally friendly living. The prosumers’ levels of engagement with the technology vary considerably in that individual prosumers engage more actively than the others with the PV system by registering their production levels through self-acquired monitoring equipment. The materiality and physical position of the solar panels on the roofs partly help to create social significance, but only because the dwellers and their observers associate the object with particular values. Each of our three groups draws a particular meaning from PV that serves to strengthen their desired identity. Our results thus indicate that solar panels may have the potential to spread to a variety of energy customer groups. However, the issue of diffusion is highly uncertain, partly because the studied groups are pioneers and do not necessarily represent a general segment of the population. Also, the studied prosumers tend to downplay economic profitability as a rationale for obtaining PV, and Norwegian authorities do not actively promote PV through support schemes.
... With respect to small-scale production plants, it is commonly agreed in literature that, compared to other options, solar photovoltaic (PV) plants exhibit a rather large potential for electricity generation and can play a major role in the achievement of energy efficiency targets set at EU level (Koskela et al., 2019). In recent years, PV systems considerably increased their market share due to both a rapid decline of their price by over 80% from 2008 to 2016 in most competitive markets (Schopfer et al., 2018) and to the large adoption of Feed-In-Tariffs (FITs) (Kästel and Gilroy-Scott, 2015;Lüth et al., 2018). Nonetheless, several barriers to more widespread implementation of solar PV plants persist. ...
... 2019). 9 Tables C.1 and C.2 in Appendix C report the results for 1 and 2 , in which the average PVB lifetime is set equal to 20 and 25 years, respectively (see Zucker and Hinchliffe, 2014;Kästel and Gilroy-Scott, 2015;Linssen et al., 2017;Schopfer et al., 2018). • To calibrate 3 and 4 , we computed some numerical simulations of (13) assuming (̄) = 3 ln( ) + 4 ≃ 0.5 wherē∈ [0.90, 1.20], and the boundary condition is ( ) + ( ) ≃ 0 with ∈ [0.00, 0.03]. ...
Article
Renewable energy technologies are expected to play a major role in mitigating climate change and resource depletion effects as well as in contributing to domestic energy security. Due to the intermittent nature of solar photovoltaic (PV), there are often significant gaps between energy consumption and energy supply by PV plants. This makes storage systems a potential option to maximize savings and accrue managerial flexibility by increasing the share of self-consumed energy while guaranteeing adequate power levels in distribution grids. This paper provides a theoretical framework to model households’ decision to invest in domestic PV plants coupled with battery storage. To capture the value of managerial flexibility relative to the decision to install both a PV plant and a battery, i.e., a domestic PV-Battery System (PVB), we implement a Real Options approach and propose an optimization model, which we calibrate and test according to data from the Italian energy market. Our findings show that the option of storing energy via batteries increases de facto investment value: the adoption of a PVB increases managerial flexibility, as households can optimally exercise the option to decide their consumption and storage patterns contingent on favorable market conditions. The opportunity to store energy via batteries encourages households to invest in larger plants compared to those not paired with batteries. There is indeed a positive relationship between the PVB optimal size and investment timing.
... Simultaneously, an increasing number of electricity consumers are investing in renewable energy sources. Photovoltaic (PV) power generators especially benefit from a growing popularity in residential homes, allowing these customers to reduce electricity costs and rendering them as prosumers [3]. A home energy storage system (HES) can be added to further increase self-consumption and self-sufficiency rates [4]. ...
Article
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In the context of the increased acceptance and usage of EV, V2B has proven to be a new and promising use case. Although this topic is already being discussed in literature, there is still a lack of experience on how such a system, of allowing bidirectional power flows between an EV and building, will work in a residential environment. The challenge is to optimize the interplay of electrical load, PV generation, EV, and optionally a HES. In total, fourteen different scenarios are explored for a German household. A two-step approach is used, which combines a computationally efficient linear optimizer with a detailed modelling of the non-linear effects on the battery. The change in battery degradation, storage system efficiency, and OPEX as a result of different, unidirectional and bidirectional, EV charging schemes is examined for both an EV battery and a HES. The simulations show that optimizing unidirectional charging can improve the OPEX by 15%. The addition of V2B leads to a further 11% cost reduction, however, this corresponds with a 12% decrease in EV battery lifetime. Techno-economic analysis reveals that the V2B charging solution with no HES leads to strong self-consumption improvements (EUR 1381 savings over ten years), whereas, this charging scheme would not be justified for a residential prosumer with a HES (only EUR 160 savings).
... Numerous studies have attempted to explain prosumer-based electricity systems in many different contexts: P2P energy trading between electric vehicles [12]; assessment of P2P energy trading in the Australian national electricity market [13]; architecture and system analysis for micro-grid with P2P electricity sharing [14]; technical and feasibility assessment of household energy storage and community energy storage for residential electricity prosumers [15]; a decision support model to buy and sell electricity [16]; prosumer clustering [17]; roles of utilities and distributed electricity prosumers [18]; electricity prosumers in the UK electricity market [19], and a tariff structure for prosumers [20]. ...
Article
The concept of prosumers is well-established in the literature, but the role of a functioning prosumer in the least developed world has not yet been clarified. This paper attempts to show how prosumerism has evolved in Bangladesh, a pioneer, least developed country. It provides an insight into a functional prosumer-based renewable off-grid direct current (DC) network from the socioeconomic point of view, also reveals an operational peer-to-peer electricity trading system within this network. Prosumerism and its diverse impacts on the rural community are discussed. Along with the positive evolution of prosumerism, some barriers, drivers and enablers are explained with examples. Some negative impacts are also anticipated, but these can be overcome by implementing proper procedures in well-defined stages. Results show that prosumerism can improve the quality of life and greater socioeconomic awareness in least developed countries like Bangladesh. Prosumerism can be adopted in other similar countries by making long-term plans and learning from existing implementation in order to attain global sustainability. In addition, difficulties can be avoided with better planning and through commitment to research, aiming to improve general living standards.
... There are many different wind site owners are using the same or similar turbines, hence once a good case practice is identified it can be deployed very easily. The motivation is common for all renewables, keep lowering the LCOE [8][9][10]. ...
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In recent years both the demand and supply for upgrade solutions and repair services are growing. The majority of the American turbine owners are motivated to be able to operate their various fleets of wind turbines on their own and gain sufficient knowledge to do so in a professional manner. With this goal in mind, the learning curve includes optimizing operation cost, fine-tuning practices, and building a network with suppliers. This work focused on hydraulic pitch system designed for a modern wind turbine, technology overview, and economic loss due to leakage. Furthermore, the work covers the drivers of the customers, performance requirements, and evaluation the current solutions that are available on the market. The possible solutions are listed for each scenario and follow up actions are suggested on how to control future processes. The paper describes how to optimize the long-term running costs and discuss on the changes that could maximize the availability percentage. The findings can be also applied to both other platforms in the product line and even other Original equipment manufacturers’ (OEM) turbines to a certain extent.
... Furthermore, new applications that are geared towards individual customers are being developed, enhancing trends such as self-consumption, off-grid generation taking account of new advances in electricity storage, etc. [29][30][31][32][33][34][35]. In addition, the considerable increase in the number of customers that, not only consume, but generate energy (prosumers) also highlights the need for powerful but simple tools to enable these individual customers to operate, control and maintain their installations [36][37][38]. ...
Article
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New trends of Machine learning models are able to nowcast power generation overtaking the formulation-based standards. In this work, the capabilities of deep learning to predict energy generation over three different areas and deployments in the world are discussed. To this end, transfer learning from deep learning models to nowcast output power generation in photovoltaic systems is analyzed. First, data from three photovoltaic systems in different regions of Spain, Italy and India are unified under a common segmentation stage. Next, pretrained and non-pretrained models are evaluated in the same and different regions to analyze the transfer of knowledge between different deployments and areas. The use of pretrained models provides encouraging results which can be optimized with rearward learning of local data, providing more accurate models.
... Moreover, there are available software tools, such as HOMER (hybrid optimization model for electricity renewables) which simulate different system configurations and generate results as a list of feasible configurations sorted by net present cost [19]. In this sense, Renewable energy systems with Photovoltaic system and wind system for self-consumption were modelled using the HOMER tool to estimate the levelized cost of electricity and net present cost [20,21]. Other software tools, such as EPSS (energy production and storage simulator) allow the designer to choose between different combinations of nominal power and selfconsumption and self-sufficient indices the one which better fits with other requirements, (e.g. ...
Article
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A proper assessment of the cost-competitiveness and profitability of self-consumption systems is crucial to promoting the transition from grid-dependent to energy self-sufficient buildings. Most of the ap-proaches found in the literature may not take into account economic parameters such as taxes, depre-ciation and the cost of financing, which have a significant effect on the economic profitability of an investment. Moreover, they only focus on discrete array powers and relatively high recording intervals when estimating the self-consumed energy. In order to manage the aforementioned challenges, a new method will be developed to size the PV generator in a PV self-consumption system which provides the NPV curve together with the self-consumption and self-sufficiency indices for a wide range of array powers which suits residential self-consumption systems. Two scenarios will be considered depending on whether the generated surplus electricity is wasted or it is remunerated from the grid operator. Results show that not only the chosen scenario but the electricity tariff may be key parameters when optimizing NPV. Furthermore, the impact of the recording interval may be significant when estimating NPV. Percentage errors of 11.4% and 33.6% may be reached when considering a recording interval of 15 and 60 min, respectively.
... Hydrogen can be considered as an energy vector which increases the consumers' possibilities not only for thermal or power energy generation, but also for transport [15,16]. Moreover, energy storage through hydrogen can boost RES distributed generation allowing each "prosumer" (energy consumer and productor) to become more independent from the power grid, and increasing his/her options to interact with it by providing power demand shifting services or selling surplus energy generated according to the power grid necessities, among other [17]. Moreover, it can contribute to decrease power losses in the power grid and take better advantage of non-RES [18,19]. ...
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Solar photovoltaic (PV) plants coupled with storage for domestic self-consumption purposes seem to be a promising technology in the next years, as PV costs have decreased significantly, and national regulations in many countries promote their installation in order to relax the energy requirements of power distribution grids. However, electrochemical storage systems are still unaffordable for many domestic users and, thus, the advantages of self-consumption PV systems are reduced. Thus, in this work the adoption of hydrogen systems as energy vectors between a PV plant and the energy user is proposed. As a preliminary study, in this work the design of a PV and hydrogen-production self-consumption plant for a single dwelling is described. Then, a technical and economic feasibility study conducted by modeling the facility within the Homer Energy Pro energy systems analysis tool is reported. The proposed system will be able to provide back not only electrical energy but also thermal energy through a fuel cell or refined water, covering the fundamental needs of the householders (electricity, heat or cooling and water). Results show that, although the proposed system effectively increases the energy local use of the PV production and reduces significantly the energy injections or demands into/from the power grid, avoiding power grid congestions and increasing the nano-grid resilience, operation and maintenance costs may reduce its economic attractiveness for a single dwelling. Keywords: Hydrogen, Solar photovoltaics, Energy vector, Power storage, Smart grids, Nano-grids
... Literature has also pointed to the role of new technological innovations such as micro-generation, smart metering and energy management systems in engaging consumers in energy production and reduced energy consumption (e.g. [9][10][11]). Partly as a critique of the dominant role of economic and psychological theories in explaining consumer behaviour and the potential for influencing change (e.g. [8,12]), a body of literature has explored how energy consumption and adoption of new carbon-friendly energy technologies could be understood as dynamic social practices [4,13,14,15]. ...
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To achieve an energy transition favouring renewable energy in the face of climate change, several countries in the EU region have pursued different economic incentives to encourage citizens to invest in household solar systems. This enables citizens to become 'prosumers' who produce electricity for their own consumption and sell excess produced electricity to the central grid supply. Influencing people's energy consumption in this way can potentially reach EU's renewable energy targets, as prosumers add to the stock of renewable energy nationally. Through in-depth interviews with men and women from 28 households in Norway and the United Kingdom, this article explores the process of becoming a prosumer and the energy practices in prosuming households. Drawing on theories of social practice and domestication, the article pays particular attention to how the phases of appropriation, objectification, incorporation and conversion of household solar systems are gendered in the sense that women and men have different economic, social and cultural capital, and to how this influences their interaction with technology in the transition from consumers to prosumers. Viewing prosuming through the gender lens reveals how policies need to be designed to promote new practices that are attractive for a more diverse group than today's standard subsidies and feed-in tariffs if the aim is to increase the number of residential prosumers and transition to a more sustainable and equitable low-carbon energy system.
... Branker et al. (2011),Kästel and Gilroy-Scott (2015). ...
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The digitization of power system represents one of the main instruments to achieve the target set by the European Union 2030 climate and energy Agenda of affordable energy transition. During the last years, such innovation process has been associated with the Smart Grid (SG) term. In this context, efficiency and flexibility of power systems are expected to increase and energy consumers to be active also on the production side, thus becoming prosumers (agents that both produce and consume energy). This paper provides a theoretical real option framework with the aim to model prosumers' decision to invest in photovoltaic power plants, assuming that they are integrated in a Smart Grid. Our main focus is to study the optimal plant size and the optimal investment threshold, in a context where exchange of energy among prosumers is possible. The model was calibrated and tested with data from the Northern Italy energy market. Our findings show that the possibility of selling energy between prosumers, via the Smart Grid, increases investment values. This opportunity encourages prosumers to invest in a larger plant compared with the case without exchange possibility and that there is a positive relation between optimal size and (optimal) investment timing. The effect of uncertainty is in line with the literature, showing increasing value to defer with volatility. Abstract The digitization of power system represents one of the main instruments to achieve the target set by the European Union 2030 climate and energy Agenda of affordable energy transition. During the last years, such innovation process has been associated with the Smart Grid (SG) term. In this context, efficiency and flexibility of power systems are expected to increase and energy consumers to be active also on the production side, thus becoming prosumers (agents that both produce and consume energy). This paper provides a theoretical real option framework with the aim to model prosumers' decision to invest in photovoltaic power plants, assuming that they are integrated in a Smart Grid. Our main focus is to study the optimal plant size and the optimal investment threshold, in a context where exchange of energy among prosumers is possible. The model was calibrated and tested with data from the Northern Italy energy market. Our findings show that the possibility of selling energy between prosumers, via the Smart Grid, increases investment values. This opportunity encourages prosumers to invest in a larger plant compared with the case without exchange possibility and that there is a positive relation between optimal size and (optimal) investment timing. The effect of uncertainty is in line with the literature, showing increasing value to defer with volatility.
... To demonstrate the possibility of the future decentralized energy market, Kesting et al. [7] studied the engagement of prosumers under the condition of dynamic pricing through a pilot project. The economic feasibility of household prosumers in the UK for six sites was analyzed by Kästel et al. [8]. Dimitrios et al. [9] studied the orchestrating problem of energy prosumers so as to model the energy prosumers as a single entity in the energy market, indicating that clustering prosumers into groups can significantly reduce the total energy cost. ...
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Enabling P2P energy trading among prosumers (both producers and consumers) is a promising paradigm in the decentralized energy era. It is important to design a fair pricing strategy for energy trading; however, it leads to a complicated problem particularly when multi-energy systems participating the energy trading. This study proposes a trading aiding tool, which is based on a Nash-type non-cooperative game model between residential and commercial prosumers with guaranteed trading fairness. The model is generalized considering commonly used energy supply technologies and various demand-side management measures. The energy cost for both residential and commercial prosumers can be minimized with fair pricing strategies for both electricity and heating trading. Compared to previous research, this study presents a more concise solution to determine the fair prices for multi-energy trading. Through the McCormick relaxation, the complex problem is linearized as a Mixed Integer Linear Programming (MILP) model with significant improvement on computational efficiency. A case study is conducted in Shanghai, China, where a community is modeled as the residential prosumer and connected to the commercial prosumer including three commercial buildings. The results indicate that compared to two prosumers standing alone, enabling energy trading with fairness can achieve 4.9% cost saving; the fair-trading prices for electricity and heating are 0.090 $/kWhe and 0.015 $/kWhh, respectively. Overall, this study proposes an efficient tool to provide insights into optimal infrastructure designs, and further quantify the fair pricing and schedule of demand response during P2P energy trading.
... As a matter of fact, these HES together with demand-response mechanisms, constitute a great opportunity for industrial, commercial and public prosumers (active energy consumers), whose primary activity is not electricity generation, but who possess the necessary capital and land resources to collect the energy savings. Moreover, benefiting from the fall in the cost of renewable energy technologies and by actively participating as players in the "broader" horizontal electricity markets, can make them achieve noteworthy profits [26,27]. In this framework, this research proposes an optimal dispatch strategy for a simulated grid connected/stand-alone hybrid energy system, owned by an industrial prosumer with resources availability. ...
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The scenario where the renewable generation penetration is steadily on the rise in an increasingly atomized system, with much of the installed capacity "sitting" on a distribution level, is in clear contrast with the "old paradigm" of a natural oligopoly formed by vertical structures. Thereby, the fading of the classical producer-consumer division to a broader prosumer "concept" is fostered. This crucial transition will tackle environmental harms associated with conventional energy sources, especially in this age where a greater concern regarding sustainability and environmental protection exists. The "smoothness" of this transition from a reliable conventional generation mix to a more volatile and "parti-colored" one will be particularly challenging, given escalating electricity demands arising from transportation electrification and proliferation of demand-response mechanisms. In this foreseeable framework, proper Hybrid Energy Systems sizing, and operation strategies will be crucial to dictate the electric power system's contribution to the "green" agenda. This paper presents an optimal power dispatch strategy for grid-connected/off-grid hybrid energy systems with storage capabilities. The Short-Term Price Forecast information as an important decision-making tool for market players will guide the cost side dispatch strategy, alongside with the storage availability. Different scenarios were examined to highlight the effectiveness of the proposed approach.
... The same measure with the same definition as self-consumption has been referred to as load fraction [8], on-site energy matching and fraction [9] and supply and demand cover factor [10]. Especially selfsufficiency has been referred to by several different terms, such as cover ratio [11], solar fraction, and cover factor index [12]. ...
... Several specific examples of optimizing renewable energy self-consumption are explained in references [35][36][37]. Moreover, Kästel and Gilroy-Scott [38] explain that, when grid parity is achieved, high self-consumption levels cannot only be a source of cheaper electricity but can also protect the consumer against energy price inflation. This is a factor to be taken into account in the Canary Islands' subsystems. ...
Article
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As non-mainland territories, the Canary Islands represent isolated electricity systems with their own peculiarities, derived mainly from their location. They are therefore subject to a special regulatory framework governing their electricity supply activities. These systems are less stable, in terms of both electrical energy generation and its transport infrastructures, because their site limitations require production to rely on a small number of plants, multiplying the problems that arise from potential grid or generator failures. This means that power generation costs in isolated groups of islands have been intrinsically higher than those on the mainland, above all in terms of fuel, given their greater dependence on fossil fuels. These costs also have a different structure, wherein variable costs prevail over fixed costs. The entry into force of Royal Decree 738/2015 defines a new method to determine the price of demand, generation, and additional costs. In addition, it creates a new virtual market for each isolated system (or subsystem), which takes into account the prices of the mainland, moving year, and generation costs. This implies a reduction in the volatility of the electricity market in these territories (lower risk) because part of the purchase price is already known. In this regard, the Canary Islands’ subsystem that has experienced the greatest increase in generation costs is the island El Hierro, since, in systems where there is a wider diversification in the generation methods, there is also a greater variation in monthly prices—that is, greater uncertainty. The aim of this study is to analyze the operation of the Canary Islands’ electricity market and the configuration of its dispatch pool. The wind-pumped hydropower station on El Hierro is described as a specific case study to illustrate the impact of the new regulatory framework.
... By aggregating different demand profiles under the same renewable energy system, it is possible to achieve a smoother load curve, guaranteeing an increased self-consumption ratio of the order of 20% (Kästel and Gilroy-scott, 2015), (Amaral et al., 2016). The combination of heterogeneous demand profiles is interesting since it "fills the voids" of the aggregated load curve due to the mismatch of individual consumption patterns (Almeida, 2015). ...
... SCR is 31-37% for domestic load and 40-50% for non-domestic load, respectively. Prosumers pooling with less fluctuated loads has proven beneficial for increasing the self-consumption levels by as much as 17.6%, thus suggesting that productive collaboration of prosumers can unlock greater economic potential [25]. For example, if prosumers become a community, it encourages a higher solar penetration rate of up to 23% and a slight cost reduction of up to 8% [26]. ...
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Substantial penetration levels of intermittent and fluctuated renewable energy resources like PV can cause overcapacity and other operational challenges in the grid. Therefore, energy market actors are directed to the feed-in limitations and restrict the installed capacity. Likewise, the declining incentives make energy storage central to increasing self-consumption. However, economic uncertainties arise concerns about the financial feasibility of energy storage investments. This study presents the techno-economic benefits in increasing PV self-consumption using shared energy storage for a prosumer community under various penetration rates. In the first stage, the optimal energy storage allocations were done using the proposed New Best Algorithm and genetic algorithm with Matlab. Then, the technical performance of the proposed method was simulated with year-long using PSS Sincal. In the second stage, the economic feasibility of increasing PV self-consumption using shared energy storage under various penetration rates is evaluated considering residual energy. The effects of incentives are examined in terms of economic indicators such as payback period, net present value, and internal rate of return. The incentives promote prosumers either with or without energy storage to increase self-consumption. As a result, shared energy storage increased self-consumption up to 11% within the prosumer community. Results and sensitivity analysis are given in detail. The proposed method provides significant economic benefits and improved power quality.
... After signing up to Elexon's data platform 4 (there is no charge for this), the data that Elexon makes publicly available can be downloaded either manually 5 , or using an API with a code assigned to the login account using the Balancing Mechanism Reporting Service 6 . These data underpin numerous detailed research and analyses of Great Britain's energy systems [7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][49][50][51][52][53][54][55][56][57][58][59][60][61] , public facing websites [62][63][64][65] and is useful in teaching and learning for energy systems courses and modules. However, a growing limitation of the Elexon data is that it does not include values for distributed generation. ...
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Publicly available electrical generation and interconnector data is combined to create a half-hourly dataset for Great Britains electrical demand. The method uses Elexon data for power plants connected at the transmission level, monitored as part of the balancing mechanism, and combines these with the estimates for embedded generation for solar and wind generation from the system operator National Grid. The resulting dataset therefore has both transmission connected and distribution connected generation. Finally, to arrive at a closer representation of Great Britains demand rather than its generation, the net imports are calculated from summing the values of all imports and exports. The resulting dataset termed ESPENI (Elexon Sum Plus Embedded Net Imports) keeps within 11 per cent of the official quarterly values from BEIS, which include autogeneration that is not publicly available. The datasets are presented in both a cleaned and raw form and have been parsed to provide UTC and localtime columns to be more easily utilised by a wider group of researchers.
... Most of the literature considers photovoltaics (PV) as the most fitting generation technology for collective self-consumption schemes, due to its affordability and technological readiness level, but also its modularity, making it compatible with contexts of considerably different scales (from a single building to a large-scale power plant). Before collective self-consumption was even introduced by the CEP, several authors had shown that one of the benefits for collective PV schemes was the increase in the Self-Consumption Rate (the fraction of local production which is consumed on-site): the aggregation of somewhat decorrelated load profiles results in smoother aggregated profiles, thus reducing the mismatch with the PV profile [8,[10][11][12]. Fina et al. (2019) expanded this type of approach (i.e., an arbitrary aggregation of loads) by using a Mixed Integer Linear Programming (MILP) model to determine the maximum net present value and optimal system capacities of PV and/or heating systems for a set of illustrative collective arrangements, which the authors named "settlement patterns" [9]. ...
Article
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The recently approved regulation on Energy Communities in Europe is paving the way for new collective forms of energy consumption and production, mainly based on photovoltaics. However, energy modeling approaches that can adequately evaluate the impact of these new regulations on energy community configurations are still lacking, particularly with regards to the grid tariffs imposed on collective systems. Thus, the present work models three different energy community configurations sustained on collective photovoltaics self-consumption for a small city in southern Portugal. This energy community, which integrates the city consumers and a local winery, was modeled using the Python-based Calliope framework. Using real electricity demand data from power transformers and an actual winery, the techno-economic feasibility of each configuration was assessed. Results show that all collective arrangements can promote a higher penetration of photovoltaic capacity (up to 23%) and a modest reduction in the overall cost of electricity (up to 8%). However, there are clear trade-offs between the different pathways: more centralized configurations have 53% lower installation costs but are more sensitive to grid use costs (which can represent up to 74% of the total system costs). Moreover, key actor’s individual self-consumption rate may decrease by 10% in order to benefit the energy community as a whole.
... The HRESDR helps researchers with the design of the structure, transfer of electricity and accurate forecasting, etc. It will be used for a power system where the load is fixed [93,94] and make more profit to electricity areas [95,96]. It also provides electricity using a battery [97]. ...
Chapter
Efficient forecasting of solar irradiation is always a challenging task for researchers in the past and at present. In order to effectively forecast solar irradiation, this paper proposed a forecasting model based on Empirical Mode Decomposition (EMD) with Back Propagation Neural Network (BPNN). In this, EMD is used to decompose the original data into several Intrinsic Mode Functions (IMF’s) and one residue; whereas the BPNN model is trained for each IMF with a residue for final forecasting. The forecasted result for each IMF and residue are aggregate to find the ultimate prediction results. For the proposed work, three years of data from 2012–14 has been collected from National Solar Radiation Database (NSRDB) for a Delhi location. The proposed model is trained using two-year data and tested for a duration of one year on different seasons by following the single step ahead point forecast technique. The proposed model performance is determined in terms of Mean Absolute Percentage Error (MAPE), Root Mean Square Error (RMSE), and Correlation Coefficient (R2). The proposed model performance indicates that it outperforms the standalone BPNN and Naive Predictor model for forecasting solar irradiation in terms of precision and complexity.
... The HRESDR helps researchers with the design of the structure, transfer of electricity and accurate forecasting, etc. It will be used for a power system where the load is fixed [93,94] and make more profit to electricity areas [95,96]. It also provides electricity using a battery [97]. ...
... Secondly, we identify the size of the PV plant that maximizes the joint benefit Campagna et al. (2020), among others, focus on technological aspects of SG. Sun et al. (2013), Ciabattoni et al. (2014), Kästel and Gilroy-Scott (2015), Luthander et al. (2015), Ottesen et al. (2016), Bayod-Rújula et al. (2017) investigate the role of prosumers' behaviors, whereas Oren (2001), Salpakari and Lund (2016), Sezgen et al. (2007) study demand-side management and demand-response. With reference to exchange P2P, we recall, among others, Angelidakis and Chalkiadakis (2015), Zafar et al. (2018), Ghosh et al. (2018), Liu et al. (2018, Gonzalez-Romera et al. (2019) and Hahnel et al. (2020). ...
... Recently, a massive number of energy-users have transformed into prosumers because of numerous reasons such as the strong society attitude with respect to alleviation of negative climate impacts, desires to decrease electricity costs, and various government regulations, including generous feed-in tariff schemes. Factors influencing the prosumerʹs revitalization vary in terms of social values, technological development, etc. [1][2][3][4][5][6], but the most frequently mentioned are renewable energy generation costs and electricity prices [7][8][9][10]. In general, the cost of power generation is compared with the levelized cost of electricity (LCOE) [11]. ...
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Since the sharing economy emerged as a new paradigm with the development of technology, the global sharing economy market has grown rapidly. In the energy sector, peer-to-peer energy trading is being conducted to share energy produced through renewable energy systems. In this study, in the situation where energy transactions among individuals are expected to expand in the future, the types of buildings and trading to secure the economics of energy trading were compared. The types of buildings were limited to residential buildings, and the economic efficiency according to energy performance was compared. Because the government has strengthened energy performance regulations, the performance varied depending on the time of construction. Therefore, building types were divided into existing houses, new houses, and zero-energy houses. The trading types were compared to the existing methods, net-metering and feed-in tariff for small-scale distributed PV systems, with P2P trading. Thus, consuming only the amount of electricity in Tier 1 and trading the rest between individuals was the most economical strategy in residential buildings to which the progressive tariff system was applied. As the performance of a building improves, the more electricity that can be traded, and the wider the range for securing economic feasibility.
... Secondly, we identify the size of the PV plant that maximizes the joint benefit 12 Mondol et al. (2009), Paetz et al. (2011, Kriett and Salani (2012), Pillai et al. (2014), Moreno et al. (2017), Farmanbar et al. (2019 and Campagna et al. (2020), among others, focus on technological aspects of SG. Sun et al. (2013), Ciabattoni et al. (2014), Kästel and Gilroy-Scott (2015), Luthander et al. (2015), Ottesen et al. (2016), Bayod-Rújula et al. (2017) investigate the role of prosumers' behaviors, whereas Oren (2001), Salpakari and Lund (2016), Sezgen et al. (2007) study demand-side management and demand-response. With reference to exchange P2P, we recall, among others, Angelidakis and Chalkiadakis (2015), Zafar et al. (2018), Ghosh et al. (2018), Liu et al. (2018), Gonzalez-Romera et al. (2019) and Hahnel et al. (2020). ...
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In this paper, we provide a real options model framing prosumers' investment in photovoltaic plants. This is presented in a Smart Grid context where the exchange of energy among prosumers is possible. We determine the optimal size of the photovoltaic installations based on the influence the self-consumption profiles on the exchange of energy among prosumers. We calibrate the model using figures relative to the Northern Italy energy market and investigate the investment decision allowing for different prosumer profiles and consider several combinations of their individual energy demand and supply. Our findings show that the shape of individual energy demand and supply curves is crucial to the exchange of energy among prosumers, and that there could be circumstances under which no exchange occurs.
... This allows to construct a cost function in terms of kWh /year instead of kWp.21 Branker et al. (2011) , Kästel andGilroy-Scott (2015) . 22 IEA (2018) identifies an average value of the solar PV levelized cost of electricity in 2017 equal to 100 euro/MWh 23 MIT ...
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The digitization of power system represents one of the main instruments to achieve the target set by the European Union 2030 climate and energy Agenda of affordable energy transition. During the last years, such innovation process has been associated with the Smart Grid (SG) term. In this context, efficiency and flexibility of power systems are expected to increase and energy consumers to be active also on the production side, thus becoming prosumers (agents that both produce and consume energy). This paper provides a theoretical real option framework with the aim to model prosumers’ decision to invest in photovoltaic power plants, assuming that they are integrated in a SG. Our main focus is to study the optimal plant size and the optimal investment threshold, in a context where exchange of energy among prosumers is possible. The model was calibrated and tested with data from the Northern Italy energy market. Our findings show that the possibility of selling energy between prosumers, via the SG, increases investment values. This opportunity encourages prosumers to invest in a larger plant compared with the case without exchange possibility and that there is a positive relation between optimal size and (optimal) investment timing. The effect of uncertainty is in line with the literature, showing increasing value to defer with volatility. Our comparative statics stress the need for policies to push the PV efficiency.
... To compare electricity prices across different technologies, such as fossil fuel-based grid power, standalone PV systems, etc., the levelized cost of electricity (LCOE) is commonly applied. Kästel and Gilroy-Scott compared electricity prices for wind and PV technologies based on LCOE [139]. For a system including EVs, a separate energy storage system and renewable energy supply, total operation cost (Ctotal) is a common parameter in the economic aspect. ...
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The deployment of solar photovoltaics (PV) and electric vehicles (EVs) is continuously increasing during urban energy transition. With the increasing deployment of energy storage, the development of the energy sharing concept and the associated advanced controls, the conventional solar mobility model (i.e., solar-to-vehicles (S2V), using solar energy in a different location) and context are becoming less compatible and limited for future scenarios. For instance, energy sharing within a building cluster enables buildings to share surplus PV power generation with other buildings of insufficient PV power generation, thereby improving the overall PV power utilization and reducing the grid power dependence. However, such energy sharing techniques are not considered in the conventional solar mobility models, which limits the potential for performance improvements. Therefore, this study conducts a systematic review of solar mobility-related studies as well as the newly developed energy concepts and techniques. Based on the review, this study extends the conventional solar mobility scope from S2V to solar-to-buildings, vehicles and storage (S2BVS). A detailed modeling of each subsystem in the S2BVS model and related advanced controls are presented, and the research gaps that need future investigation for promoting solar mobility are identified. The aim is to provide an up-to-date review of the existing studies related to solar mobility to decision makers, so as to help enhance solar power utilization, reduce buildings' and EVs' dependence and impacts on the power grid, as well as carbon emissions.
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This work describes a methodology to quantify the benefits from both a business-related and energy resilience perspectives provided by a microgrid based on photovoltaic solar energy and electrochemical energy storage integrated in large buildings, such as office buildings not open to the general public, which is presented as case study. First it has been identified how, by using distributed renewable energy sources (in particular, photovoltaic solar energy) and electrochemical energy storage systems, the life-cycle cost of the energy in a microgrid connected to the electrical network can be reduced significantly. As novel approach, it has been evaluated how this microgrid design can increase the resilience of a power customer supply, quantified as the time period the microgrid is able to feed an electrical consumer at an outage, which it results of great importance for large office buildings that are used to have several critical loads, such as data servers and data processing centers. It was found that, by adding photovoltaic solar energy and electrochemical storage, it is possible to extend the power resilience of this sort of power customers achieving an average survival time to a power cut of 4 h thanks to the proposed solar photovoltaic and energy storage system. Then, the microgrid could save $ 112,410 in energy over the 20-year life cycle of the facility, while increasing the amount of time it can survive a power outage. The proposed methodology presented in this paper provides a model that can be applied to other case studies and scenarios where an alternative to the classic diesel-based emergency supply systems are needed.
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In this paper, we provide a real options model framing prosumers’ investment in photovoltaic plants. This is presented in a Smart Grid context where the exchange of energy among prosumers is possible. We determine the optimal size of the photovoltaic installations based on the influence the self-consumption profiles on the exchange of energy among prosumers. We calibrate the model using figures relative to the Northern Italy energy market and investigate the investment decision allowing for different prosumer profiles and consider several combinations of their individual energy demand and supply. Our findings show that the shape of individual energy demand and supply curves is crucial to the exchange of energy among prosumers, and that there could be circumstances under which no exchange occurs.
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Renewable energy has become an important objective especially for fighting climate change and improving energy security. This study has employed two methods for data analysis (i.e., regression analysis and fuzzy-set Qualitative Comparative Analysis) in order to seize the complexity of the phenomenon and explore antecedents of willingness to pay for green energy. The results derived from fuzzy-set Qualitative Comparative Analysis indicate that knowledge and/or social norms and moral obligations are present in all configurations when we have high willingness to pay for green energy. Furthermore, we conducted linear regression analysis, which revealed that acceptance of green energy, social norms and moral obligations and knowledge about green energy exert a significant positive impact on willingness to pay for green energy and, thus, work as drivers of willingness to pay for green energy. We have also examined the differences among socio-demographic characteristics of consumers (e.g., gender, education, income, and age) related to their environmental concern, consumers' commitment, acceptance of green energy, perceived risk, social norms and moral obligations, knowledge about green energy, and consumers’ willingness to pay for green energy. Use of different methods allowed us to better understand the issue pertaining to antecedents of willingness to pay for green energy.
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To date photovoltaic energy systems have been widely installed on homes in Europe and all over the world. In Europe and in Italy investments in domestic photovoltaic power plants (PV) were boosted by generous feed-in tariffs that made these investments extremely attractive for small private investors, such as homeowners. It is commonly agreed that the greater the building energy efficiency, the greater the property market value. It is of paramount importance to determine the value that PV systems may add to home sale transactions. The aim of the paper is to investigate whether Smart Grids (SGs) innovation can increase market values due to higher production and consumption flexibility. SGs give de facto producers and consumers, the opportunity to be active in the energy market and strategically decide their optimal production/consumption pattern. In this paper, we provide a model based on the real option theory to determine the value of this flexibility and the related market value increase. We model the homeowner decision to invest in a solar home with a PV plant and connect to an SG by comparison to the decision to invest in a solar home not connected to an SG. We determine the property potential market value increase due to the opportunity to perform active energy management given by smart grids and we compare this value increase to the PV plant value per se. To capture the value of managerial flexibility we implement a real option approach. Results of simulations, performed according to zonal prices' trend and volatility in the North and South of Italy, show that in the North and in the South, being connected to an SG increases by about 5-10% the PV investment's value and this quota increases as energy savings and flexibility increase. The greater the flexibility, the greater the property market value.
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This work addresses a multi-objective strategy for defining the relationships between design and utility policy prices in water-energy off-grid systems. Levelized cost of utility is introduced for valuating the price of power, heat and water supply in an isolated community from Mexico. Besides, levels of subsidies and impacts of social, energy and economic policies are considered for defining the utility price for the end user. Levelized cost of electricity has been used as a common metric for determining the economic impact of implementing energy systems in off-grid systems. Normally, it is defined as a fixed cost associated to energy utilities. However, it is possible to define levelized cost of utilities associated to the design of multi-product systems. The proposed methodology allows determining the levelized cost of utilities using a flat-tariff scheme, as it is used in most of literature, and according to the demand-generation dynamics. For testing these ideas, it is presented the design of a water-energy off-grid system consisting of combined heat and power units fed by natural gas and biogas. The water-energy surplus management is performed using pumping and battery systems. The optimal design considers the size and selection of units according with objective functions as minimizing total annual cost and land usage as well as maximizing the social opportunity of community. The utility cost influence over operational policy is defined by partial load and storage levels of the units. For reaching a trade-off between objective functions, it is used a utopia-tracking approach. Results show the suitable level of subsidies as well as the advantages of implementing dynamic levelized cost of utilities according with the behavior of the water-energy supply system.
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This work analyzes the grid parity of distributed photovoltaic generation (DG-PV) in the province of San Juan-Argentina, proving that currently, the levelized cost of DG-PV is on average 20% higher than the tariff price for residential customers. In order to achieve the grid parity, the provincial government should implement incentive mechanisms such as the Net Billing proposed in the National Law 27.424 (2017). The impact of the Net Billing scheme proposed in such law, from the point of view of a typical residential user, and also compared with the impact of the Net Metering and Feed-in Tariff mechanisms are presented in this work. Results show that the Net Metering scheme could be the most profitable or economically beneficial for PV-owners, but it could have some negative impact on the incomes of utilities. Besides, investment decisions in renewable distributed generation are significantly affected by technological costs, national financial conditions, and tariffs. This analysis also suggests that taxes included in the tariff structure are an important aspect to take into account for implementing incentive mechanisms. Finally, some energy policies are recommended to guarantee the profitability of DG-PV systems and to assist the government in making decisions to promote these systems.
Chapter
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Europe and, more particularly, the European Union (EU) has been pursuing ambitious goals in terms of energy, with pioneering energy policy pushing for more clean and affordable energy and highly competitive electricity markets. Electricity market design proved to be a challenge since the first models intended for further competition in the sector have been launched. With the increasing use of distributed and renewable-based electricity generation, electricity models became increasingly challenging. Other distributed energy resources, namely demand flexibility, distributed storage, and electric vehicles, are also bringing new requirements for electricity markets and open the way for local electricity markets. Although still an emerging concept, local electricity markets have huge potential, namely regarding increased gathering of the demand flexibility potential and to bring significant benefits to consumers. This chapter addresses the EU vision for electricity markets in the new context and discusses its benefits, risks, and future perspectives, highlighting the most important legislation, and some practical advances and implementations.
Thesis
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The purpose of this thesis is to investigate some key features of the Smart Grids topic, focusing on the agents' (i.e. prosumers) investment decisions in the photovoltaic technology, in a context characterized by uncertainty and where the investment decision is undertaken cooperatively. The effect of allowing prosumers to exchange of energy with each other (exchange P2P, hereafter) is analyzed with a special emphasis on the demand and supply matching in exchange P2P as well as the conditions assuring its economic optimality. Discussion related to Renewable Energy Communities (REC) is provided with the aim to understand how the findings of our models, can boost their diffusion.
Conference Paper
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Power systems worldwide are complex and challenging environments. Integration of renewable energy sources rises complexity of the energy management problems in the power systems. Multi Agent Systems (MASs) make this opportunity to model and study several issues related to the complex systems. In a smaller scale, a residential energy management system would be effective for the both sides of the network. It can reduce the electricity costs of the demand side, and it can help the power grid to be more robust in peak times. This paper represents a multi-agent approach to model the smart home’s energy system. In the proposed case study, smart home can exchange energy with the upstream operator in distributed power system, and manage its own energy consumption autonomously.
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As the solar photovoltaic (PV) matures, the economic feasibility of PV projects is increasingly being evaluated using the levelized cost of electricity (LCOE) generation in order to be compared to other electricity generation technologies. Unfortunately, there is lack of clarity of reporting assumptions, justifications and degree of completeness in LCOE calculations, which produces widely varying and contradictory results. This paper reviews the methodology of properly calculating the LCOE for solar PV, correcting the misconceptions made in the assumptions found throughout the literature. Then a template is provided for better reporting of LCOE results for PV needed to influence policy mandates or make invest decisions. A numerical example is provided with variable ranges to test sensitivity, allowing for conclusions to be drawn on the most important variables. Grid parity is considered when the LCOE of solar PV is comparable with grid electrical prices of conventional technologies and is the industry target for cost-effectiveness. Given the state of the art in the technology and favourable financing terms it is clear that PV has already obtained grid parity in specific locations and as installed costs continue to decline, grid electricity prices continue to escalate, and industry experience increases, PV will become an increasingly economically advantageous source of electricity over expanding geographical regions.
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The development of solar district heating is gaining more and more interest, but, in some case the space available for the integration of solar collectors on the ground is limited and the use of decentralized systems is necessary. For decentralized solar district heating systems different hydraulic schemes at the substation level, with or without local use of solar energy, are possible. The present paper detailed an advanced study on decentralized solar district heating system using dynamic simulation software. Nine different hydraulic schemes for substations have been investigated with a return to return feed in. For each scheme many parameters that influence the performance of the solar installation have been studied such as the district heating network return temperature, the solar collector area and the type of solar collector (low temperature or high temperature solar collector). The comparison between the different hydraulic schemes is based on thermal efficiency but also on solar energy cost using the methodology of the Levelized Cost Of Energy (LCOE).
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A high-resolution model allowing for the comparison of different energy storage technologies in a variety of realistic microgrid settings has been developed. The Energy Systems Model (ESM) is similar to the popular microgrid software HOMER, but improves upon the battery models used in that program. ESM adds several important aspects of battery modeling, including temperature effects, rate-based variable efficiency, and operational modeling of capacity fade and we demonstrate that addition of these factors can significantly alter optimal system design, levelized cost of electricity (LCOE), and other factors. ESM is then used to compare the Aqueous Hybrid Ion (AHI) battery chemistry to lead acid (PbA) batteries in standalone microgrids. The model suggests that AHI-based diesel generator/photovoltaic (PV)/battery systems are often more cost-effective than PbA-based systems by an average of around 10%, even though the capital cost of AHI technology is higher. The difference in LCOE is greatest in scenarios that have lower discount rates, increased PV utilization, higher temperature, and more expensive diesel fuel. AHI appears to be a better complement to solar PV, and scenarios that favor the use of solar PV (low PV prices, low discount rates, and high diesel prices) tend to improve the LCOE advantage of AHI. However, scenarios that do not require constant cycling of the batteries strongly favor PbA. AHI is not a drop-in replacement for PbA. To minimize LCOE, microgrids using AHI batteries should be designed and operated differently than PbA microgrids.
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This paper provides a new framework for the calculation of levelized cost of stored energy. The framework is based on the relations for photovoltaics amended by new parameters. Main outcomes are the high importance of the C rate and the less dominant role of the roundtrip efficiency. The framework allows for comparisons between different storage technologies. The newly developed framework model is applied to derive the LCOE for a PV and storage combined power plant. The derived model enables quick comparison of combined PV and storage power plants with other forms of energy generation, for example diesel generation. This could prove helpful in the current discussion about diesel substitution in off-grid applications. In general, the combined levelized cost of energy lies between the LCOE of PV and LCOE of storage.
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Energy is one of the most basic materials of the national economy, which plays an important role in national productin and life. The relationship between energy consumption and economic growth has been a fascinating question since energy crisis in 70s of last century. This paper analyzes the relationship between energy consumption and economic development based on the VAR model using temporal series of China from 1990 to 2009, then uses impulse response function and variance decomposition to portray the correlations between economic growth and energy consumption. The result shows that there exists a unidirectional causality from energy consumption to gross domestic product and energy consumption can observably promote the development of economy.
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The intensity of market penetration and hence the relevance of clean energy technologies in mitigating climate change will greatly depend on their cost-effectiveness. This paper discusses the economic and policy aspects of speeding up the market of these technologies to reach cost parity. A combination of historical energy market dynamics, technology diffusion and endogenous learning models were employed in the analyses. Starting from giving a preferential position to emerging renewable energy technologies in the energy and climate policy, which also means securing adequate financial resources for their deployment, could lead in the base scenario to a full-cost breakthrough of wind power around 2027 and of photovoltaics in 2032. The combined global market share of renewable electricity in 2050 could reach 62% of all electricity (now 19%) of which wind and solar power alone could account for almost two-thirds corresponding to a carbon saving in the range of 8–16 GtCO2. However, if the new technologies were downgraded in the energy and climate policy context, the combined impact of solar and wind could remain at no less than 11% which would marginalize these technologies in the fight against climate change. The estimates for financial support to achieve cost parity were very sensitive to the assumptions of the input parameters: in the base case the extra costs or learning investments for solar power were €1432 billion and for wind power €327 billion, but with more conservative input data these values could grow manifold. On the other hand, considering the potentially cheaper electricity from new technologies above the cost parity point and putting a price on carbon could result in a positive yield from public support instead of it being regarded merely as unnecessary spending. The findings stress the necessity of long-term policies and strong commercialization strategies to bring the new energy technologies to breakeven point, but also highlight the complexity of assessing the true costs of making new energy technologies fully competitive.
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This article introduces a modified simulated annealing optimization approach for automatically determining optimal energy management strategies in grid-connected, storage-augmented, photovoltaics-supplied prosumer buildings and neighborhoods based on user-specific goals. For evaluating the modified simulated annealing optimizer, a number of test scenarios in the field of energy self-consumption maximization are defined and results are compared to a gradient descent and a total state space search approach. The benchmarking against these two reference methods demonstrates that the modified simulated annealing approach is able to find significantly better solutions than the gradient descent algorithm - being equal or very close to the global optimum - with significantly less computational effort and processing time than the total state space search approach.
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In recent years the global photovoltaic (PV) market has expanded rapidly due to a sharp decline in PV prices and increased attention to the importance of sustainable energy. Northern Chile has one of the highest irradiance levels in the world as well as one the highest electricity rates in Latin America. Because of these conditions, Chile is one of very few countries where several PV projects are being developed without government subsidies and consequently, the PV industry is experiencing rapid growth. This paper reviews the opportunity to take advantage of these market conditions within the residential sector, modeling PV arrays across 10 cities in Chile. A detailed modeling of PV systems is performed to achieve an accurate analysis of energy production and electricity cost, using local resource data, optimal array orientation and inclination, and production losses. A review of how Net Metering and Net Billing affect the value of the PV production is applied and a comparison using levelized cost of electricity (LCOE) is conducted. Net Metering is found to be a better policy choice to promote PV systems than Net Billing because energy injected into the electrical network is paid at the complete retail rate. However, in developed countries this kind of policy is unlikely to be supported because of it׳s economic unfeasibility. Under a Net Billing scheme a consumer will see an advantage when energy is recorded over longer time intervals and when installing a system with smaller capacity relative to household electricity consumption. This prevents excess generation from being injected into the network which would be bought by the utility at lower prices than the retail rate. Payback periods are found to be low, between 6 years in northern areas with high retail rates and 13 years in other areas with lower radiation and retail rates.
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The paper reviews different approaches, technologies, and strategies to manage large-scale schemes of variable renewable electricity such as solar and wind power. We consider both supply and demand side measures. In addition to presenting energy system flexibility measures, their importance to renewable electricity is discussed. The flexibility measures available range from traditional ones such as grid extension or pumped hydro storage to more advanced strategies such as demand side management and demand side linked approaches, e.g. the use of electric vehicles for storing excess electricity, but also providing grid support services. Advanced batteries may offer new solutions in the future, though the high costs associated with batteries may restrict their use to smaller scale applications. Different “P2Y”-type of strategies, where P stands for surplus renewable power and Y for the energy form or energy service to which this excess in converted to, e.g. thermal energy, hydrogen, gas or mobility are receiving much attention as potential flexibility solutions, making use of the energy system as a whole. To “functionalize” or to assess the value of the various energy system flexibility measures, these need often be put into an electricity/energy market or utility service context. Summarizing, the outlook for managing large amounts of RE power in terms of options available seems to be promising.
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This article introduces a modified simulated annealing optimization approach for automatically determining optimal energy management strategies in grid-connected, storage-augmented, photovoltaics-supplied prosumer buildings and neighbourhoods based on user-specific goals. For evaluating the modified simulated annealing optimizer, a number of test scenarios in the field of energy self-consumption maximization are defined and results are compared to a gradient descent and a total state space search approach. The benchmarking against these two reference methods demonstrates that the modified simulated annealing approach is able to find significantly better solutions than the gradient descent algorithm – being equal or very close to the global optimum – with significantly less computational effort and processing time than the total state space search approach.
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This paper presents improved modeling and analysis of the levelized cost of energy (LCOE) associated with photovoltaic (PV) power plants. The presented model considers the effective lifetime of various PV technologies rather than the usual use of the financial lifetime. The classical use of the solar advisor model (SAM) software is modified for considering the effective and financial lifetimes into consideration. The impact of the effective lifetime on the LCOE and the energy production is clearly presented. In addition, the presented analysis covers a wide range of PV technological characteristics, sun tracking options, and meteorological conditions. Parametric and sensitivity studies are also presented for overcoming the uncertainties in the input data and for searching of the significant options for LCOE reduction. The feasible use of PV energy is analyzed through grid parity analysis. The meteorological conditions of some locations in Egypt and the Egypt’s tariff structure are considered in the presented numerical examples. The salient outcome of this paper is that the effective lifetime has a significant impact on both the LCOE and the lifetime energy production. In addition, significant conclusions regarding the effectiveness of various sun tracking options as affected by the PV technological and locational characteristics are derived.
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In the European Union, promotion of renewable energies, in particular wind energy, has become a fundamental vector of the strategy to tackle the challenges associated with the growing awareness of environmental matters. All over Europe, aggressive incentive schemes, e.g. feed-in tariffs, came into force to promote renewable technologies. In Portugal, those tariffs are applicable for a definite period of the project's lifecycle, typically 15-20 years, after which the legislation establishes a remuneration method based on market prices. This work's purpose is to examine, from a technical and economical perspective, the operation of a wind producer when, in the future, he will be forced to compete into the electricity market. Accordingly, a simulator of a day-ahead market is implemented using a market splitting model and the economic outcome of a wind farm is assessed, considering various strategies. The results gathered show its great dependency on market prices volatility, production forecast accuracy, balancing prices and liquidity and frequency of intraday markets. A few actions are identified to mitigate some drawbacks associated with the wind farm operation in a market environment.
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Rooftop photovoltaic (PV) power generation stands as a promising technology for the transition towards a low-carbon power and buildings sector. However, in the past deployment has been strongly dependent on policy support. With the recent rapid decrease in module costs, rooftop PV is exhibiting a growing potential to be an attractive investment even in the absence of subsidies. While many drivers of economic performance have been investigated in isolation, a holistic analysis of how realistic combinations of influencing factors determine rooftop PV׳s economics is still missing. We identify the most important influencing factors through a comprehensive review of the literature. We then provide a model-based techno-economic analysis of a small-scale grid-connected residential building PV system, assessing how region-specific geographic, technological, and economic parameters jointly influence performance. We find that in many regions rooftop PV can already today be an attractive investment, even in the absence of subsidies. No regional influencing factor can in isolation guarantee or impede performance. Moreover, in most regions it might be possible to further improve economic performance. Self-consumption is identified as a likely driver of value in the future, while low electricity prices (and thus fossil fuel subsidies) present a powerful barrier in some regions. Based on these insights, we discuss implications for policy makers and investors with regard to recognizing and shaping attractive markets and investments.
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The photo-voltaic (PV) power industry has grown rapidly in recent years, and associated with that growth has been a decline in costs. There are indications that PV has already reached cost-parity with power off the grid in some markets and projections that it will attain such grid parity in many more markets over the coming decade. Analysts have suggested that the growth in PV has come at an unnecessarily high price, with unnecessarily high subsidies. However, the factors influencing the cost of PV, and the subsidies required to sustain its construction, include more than just the strength of the sun. While differences in costs of such factors as initial capital spending, operation and maintenance, and decommissioning are hard to ascertain, it is possible to account for the cost of capital, on a country-by-country basis. In this paper, we therefore map the cost of solar PV globally, accounting for both the quality of the solar resource and the cost of capital in order to differentiate levelized costs of electricity (LCOE) from PV. Our results suggest that northern countries may not be an unwise location to subsidize PV construction, and further suggest that efforts to expand PV installation in developing countries may benefit greatly from policies designed to make low cost finance more widely available.
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Integrating variable and non-dispatchable renewable power generation into existing power systems will have consequences for their operation and future expansion. These impacts will depend on two factors: (1) the variability of the total renewable power generation on different time scales and (2) the possibilities of accurately forecasting these fluctuations. In this paper, previous research on variability assessment and forecasting of solar, wind, wave and tidal energy resources is reviewed. The aim is to summarize the state of knowledge in each area and to compare the approaches used for the respective resources. For temporal variability, methods and models used for assessing the variability are surveyed, as well as what is known about the variability at individual sites and for larger aggregates of sites. For forecasting, an overview of forecasting methods for the different resources is made, and selected forecasting methods are compared over different time horizons. An important finding is that it is hard to draw strong conclusions from the existing studies due to differences in approaches and presentation of results. There is a need for further, more coherent studies that analyze the variability for the different resources in comparable ways, using data with the same resolution, and for studies that evaluate the smoothing effect and complementarity of combinations of several renewable energy resources. For forecasting, future research should suggest ways to evaluate forecasts from different renewable energy sources in easily comparable ways, using data from the same locations or regions, with the same temporal and spatial resolution, and with comparable metrics for the forecasting errors.
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In this paper we first make a review of the past annual production of electricity and the cumulative installed capacity for photovoltaic (PV) and concentrating solar power (CSP) technologies. This together with the annual costs of PV modules and CSP systems allows us the determination of the experience curves and the corresponding learning rates. Then, we go over a rigorous exposition of the methodology employed for the calculation of the value of the levelized cost of electricity (LCOE) for PV and CSP. Based on this knowledge, we proceed to establish a mathematical model which yields closed-form analytical expressions for the present value of the LCOE, as well as its future evolution (2010-2050) based on the International Energy Agency roadmaps for the cumulative installed capacity. Next, we explain in detail how specific values are assigned to the twelve independent variables which enter the LCOE formula: solar resource, discount and learning rates, initial cost and lifetime of the system, operational and maintenance costs, etc. With all this background, and making use of a simple computer simulation program, we can generate the following: sensitivity analysis curves, graphs on the evolution of the LCOE in the period 2010-2050, and calculations of the years at which grid parities will be reached. These representations prove to be very useful in energy planning policies, like tariff-in schemes, tax exemptions, etc., and in making investment decisions, since they allow, for a given location, to directly compare the costs of PV vs CSP power generation technologies for the period 2010-2050. Among solar technologies, PV seems always more appropriate for areas located in middle to high latitudes of the Earth, while CSP systems, preferably with thermal storage incorporated, yield their best performance in arid areas located at relatively low latitudes.
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The integration of wind and solar generators into power systems causes “integration costs” – for grids, balancing services, more flexible operation of thermal plants, and reduced utilization of the capital stock embodied in infrastructure, among other things. This paper proposes a framework to analyze and quantify these costs. We propose a definition of integration costs based on the marginal economic value of electricity, or market value – as such a definition can be more easily used in economic cost-benefit assessment than previous approaches. We suggest decomposing integration costs intro three components, according to the principal characteristics of wind and solar power: temporal variability, uncertainty, and location-constraints. Quantitative estimates of these components are extracted from a review of 100 + published studies. At high penetration rates, say a wind market share of 30–40%, integration costs are found to be 25–35 €/MWh, i.e. up to 50% of generation costs. While these estimates are system-specific and subject to significant uncertainty, integration costs are certainly too large to be ignored in high-penetration assessments (but might be ignored at low penetration). The largest single factor is reduced utilization of capital embodied in thermal plants, a cost component that has not been accounted for in most previous integration studies.
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One of the main reasons attributed to the slow uptake of grid-connected residential PV (photovoltaic) systems, is the lack of information about the near-term economic benefits which are as important as long-term viability for residential customers. This paper presents a comparative assessment of the near-term economic benefits of grid-connected residential PV systems. Case studies from the UK and India are taken as examples, as they vary significantly in solar resource, customer demands, electricity prices and financial support mechanisms. A metric termed PEUC (prosumer electricity unit cost) is proposed to develop art economic evaluation methodology to assess the near-term benefits from PV systems: The results obtained showed that, under the present financial support mechanisms, domestic PV systems provide near-term economic benefits in most locations in India. For most locations in the UK, cost reduction is needed to achieve near-term financial benefits and this varies depending on the location of installation. The results presented demonstrate the importance of location specific system planning and demand-generation matching through optimal sizing of the PV system and demand side management.
Article
The advent of large samples of smart metering data allows policymakers to design Feed-in Tariffs which are more targeted and efficient. This paper presents a methodology which uses these data to design FITs for domestic scale grid-connected PV systems in Ireland. A sample of 2551 household electricity demand data collected at 1/2-hourly intervals, electricity output from a 2.82 kW(p) PV system over the same time interval as well as PV system costs and electricity tariffs were used to determine the required FIT to make it worthwhile for the households to invest in the PV system. The methodology shows that it is possible to design single, multiple and continuous FITs. Continuous FITs are the most efficient and result in no overcompensation to the housholder while single and multiple FITs are less efficient since they result in different levels of overcompensation. In the PV case study considered, it was shown that the use of three FITs (0.3170, 0.3315 and 0.3475 (sic)/kW h) resulted in a 59.6% reduction in overcompensation compared to a single FIT of 0.3475 (sic)/kW h; assuming immediate and complete uptake of the technology, this would result in NPV savings of over (sic)597 m to the Irish government over a 25 year lifetime.
Article
An important characteristic of most renewable energy sources is intermittency in their ability to generate electricity. Yet, intermittency is usually ignored in life-cycle cost calculations intended to assess the competitiveness of electric power from renewable as opposed to dispatchable energy sources, such as fossil fuels. This paper demonstrates that for intermittent renewable power sources a traditional life-cycle cost calculation should be appended by a correction factor which we term the Co-Variation coefficient. It captures any synergies, or complementarities, between the time-varying patterns of electricity generation and pricing. We estimate the Co-Variation coefficient for specific settings in the western United States. Our estimates imply that the benchmark of cost competitiveness for solar photovoltaic (PV) power is 10 to 15% lower than previous average life-cycle cost analyses have suggested. In contrast, the generation pattern of wind power exhibits complementarities with electricity pricing schedules, yielding a cost assessment that is higher than that suggested by traditional calculations. For the specific settings we study, the corresponding magnitude of the markup is 10 to 15%.
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Via the integration of renewable energy and storage technologies, buildings have started to change from passive (electricity) consumers to active prosumer microgrids. Along with this development come a shift from centralized to distributed production and consumption models as well as discussions about the introduction of variable demand-supply-driven grid electricity prices. Together with upcoming ICT and automation technologies, these developments open space to a wide range of novel energy management and energy trading possibilities to optimally use available energy resources. However, what is considered as an optimal energy management and trading strategy heavily depends on the individual objectives and needs of a microgrid operator. Accordingly, elaborating the most suitable strategy for each particular system configuration and operator need can become quite a complex and time-consuming task, which can massively benefit from computational support. In this article, we introduce a bio-inspired cognitive decision agent architecture for optimized, goal-specific energy management in (interconnected) microgrids, which are additionally connected to the main electricity grid. For evaluating the performance of the architecture, a number of test cases are specified targeting objectives like local photovoltaic energy consumption maximization and financial gain maximization. Obtained outcomes are compared against a modified simulating annealing optimization approach in terms of objective achievement and computational effort. Results demonstrate that the cognitive decision agent architecture yields improved optimization results in comparison to the state of the art reference method while at the same time requiring significantly less computation time.
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Generation from renewable energy sources in Germany has experienced a considerable uptake in recent years. Mainly responsible for this development is the German Renewable Energy Sources Act (Erneuerbare Energien Gesetz, EEG). This paper considers redistributive implications of the EEG for different electricity consumers. Using time-series regression analysis, we show that electricity generation by wind and PV has reduced spot market prices considerably by 6 €/MWh in 2010 rising to 10 €/MWh in 2012. We use these results to build a near-term forecasting tool for merit order effects, projected to reach 14-16 €/MWh in 2016. On the other hand, the costs of the EEG are passed forward to consumers in the form of a surcharge. Our findings highlight significant redistributive transfers under the current design of the EEG. In particular, some energy-intensive industries are benefiting from lower wholesale electricity prices whilst being largely exempted from contributing to the costs of the scheme. We also highlight implications of our results for other areas for reform of the EEG, such as a gradual shift to a more market-based method for remuneration of renewables under the scheme. More generally, these findings suggest that policy makers need to integrate distributional assessments into policy design and implementation.
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This paper investigates the relationship between intermittent wind power generation and electricity price behaviour in Germany. Using a GARCH model, I evaluate the effect of wind electricity generation on the level and the volatility of the electricity price in an integrated approach. The results show that variable wind power reduces the price level but increases its volatility. This papers’s results also indicate that regulatory change has stabilised the wholesale price. The electricity price volatility has decreased in Germany after a modification of the marketing mechanism of renewable electricity. This gives confidence that further adjustments to regulation and policy may foster a better integration of renewables into the power system.
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This paper reviews the adjustments of the feed-in tariffs for new solar photovoltaics (PV) installations in Germany. As PV system prices declined rapidly since 2009, the German government implemented automatic mechanisms to adjust the remuneration level for new installations in response to deployment volumes. This paper develops an analytic model to simulate weekly installations of PV systems up to 30 kW b