IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v12y2019i1p165-d194938.html
   My bibliography  Save this article

Economic Performance of Using Batteries in European Residential Microgrids under the Net-Metering Scheme

Author

Listed:
  • Iolanda Saviuc

    (Department of Engineering Management, Faculty of Business Economics, University of Antwerp, 2000 Antwerpen, Belgium)

  • Herbert Peremans

    (Department of Engineering Management, Faculty of Business Economics, University of Antwerp, 2000 Antwerpen, Belgium)

  • Steven Van Passel

    (Department of Engineering Management, Faculty of Business Economics, University of Antwerp, 2000 Antwerpen, Belgium
    Centre for Environmental Sciences, Hasselt University, 3590 Diepenbeek, Belgium)

  • Kevin Milis

    (Department of Engineering Management, Faculty of Business Economics, University of Antwerp, 2000 Antwerpen, Belgium)

Abstract

Decentralized energy production offers an increased share of renewable energy and autonomy compared to the conventional, grid-only solution. However, under the net-metering scheme, the energy losses in batteries translate into financial losses to an investor seeking to move away from grid-only electricity and set up a residential PV+Battery microgrid. Our paper examines a hypothetical support scheme for such a project, designed to balance the economic disadvantage through partially supporting the acquisition of batteries, and thus ensure that the microgrid solution is more attractive than no investment. For this we develop four case studies based on experiments carried out in Greece, Italy, Denmark and Finland. Using the minimization of the Net Present Cost for each project, we compare the PV+Battery solution to the grid-only scenario over 25 years, for a range of electricity prices. The results illustrate first how the success of this project depends on the price of electricity. Second, we find that under current conditions in the respective countries the need for battery support varies between zero in Denmark and 86% in Italy, which reflects how the disadvantages of net metering can only be counterbalanced by either very high electricity price or very high solar resource. Our paper contributes thus to the discussion about the favourable environment for batteries in residential microgrids.

Suggested Citation

  • Iolanda Saviuc & Herbert Peremans & Steven Van Passel & Kevin Milis, 2019. "Economic Performance of Using Batteries in European Residential Microgrids under the Net-Metering Scheme," Energies, MDPI, vol. 12(1), pages 1-28, January.
    • Handle: RePEc:gam:jeners:v:12:y:2019:i:1:p:165-:d:194938
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/12/1/165/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/12/1/165/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Crispim, João & Braz, José & Castro, Rui & Esteves, Jorge, 2014. "Smart Grids in the EU with smart regulation: Experiences from the UK, Italy and Portugal," Utilities Policy, Elsevier, vol. 31(C), pages 85-93.
    2. Tezer, Tuba & Yaman, Ramazan & Yaman, Gülşen, 2017. "Evaluation of approaches used for optimization of stand-alone hybrid renewable energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 840-853.
    3. Christoph Goebel & Vicky Cheng & Hans-Arno Jacobsen, 2017. "Profitability of Residential Battery Energy Storage Combined with Solar Photovoltaics," Energies, MDPI, vol. 10(7), pages 1-17, July.
    4. Papadopoulos, A.M. & Karteris, M.M., 2009. "An assessment of the Greek incentives scheme for photovoltaics," Energy Policy, Elsevier, vol. 37(5), pages 1945-1952, May.
    5. Blanco, Herib & Faaij, André, 2018. "A review at the role of storage in energy systems with a focus on Power to Gas and long-term storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P1), pages 1049-1086.
    6. Soshinskaya, Mariya & Crijns-Graus, Wina H.J. & Guerrero, Josep M. & Vasquez, Juan C., 2014. "Microgrids: Experiences, barriers and success factors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 659-672.
    7. Allegrini, Jonas & Orehounig, Kristina & Mavromatidis, Georgios & Ruesch, Florian & Dorer, Viktor & Evins, Ralph, 2015. "A review of modelling approaches and tools for the simulation of district-scale energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1391-1404.
    8. Laws, Nicholas D. & Anderson, Kate & DiOrio, Nicholas A. & Li, Xiangkun & McLaren, Joyce, 2018. "Impacts of valuing resilience on cost-optimal PV and storage systems for commercial buildings," Renewable Energy, Elsevier, vol. 127(C), pages 896-909.
    9. Comodi, Gabriele & Giantomassi, Andrea & Severini, Marco & Squartini, Stefano & Ferracuti, Francesco & Fonti, Alessandro & Nardi Cesarini, Davide & Morodo, Matteo & Polonara, Fabio, 2015. "Multi-apartment residential microgrid with electrical and thermal storage devices: Experimental analysis and simulation of energy management strategies," Applied Energy, Elsevier, vol. 137(C), pages 854-866.
    10. Connolly, D. & Lund, H. & Mathiesen, B.V. & Leahy, M., 2010. "A review of computer tools for analysing the integration of renewable energy into various energy systems," Applied Energy, Elsevier, vol. 87(4), pages 1059-1082, April.
    11. Dietrich, Andreas & Weber, Christoph, 2018. "What drives profitability of grid-connected residential PV storage systems? A closer look with focus on Germany," Energy Economics, Elsevier, vol. 74(C), pages 399-416.
    12. van der Schoor, Tineke & Scholtens, Bert, 2015. "Power to the people: Local community initiatives and the transition to sustainable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 666-675.
    13. Haider, Haider Tarish & See, Ong Hang & Elmenreich, Wilfried, 2016. "A review of residential demand response of smart grid," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 166-178.
    14. Holger C. Hesse & Michael Schimpe & Daniel Kucevic & Andreas Jossen, 2017. "Lithium-Ion Battery Storage for the Grid—A Review of Stationary Battery Storage System Design Tailored for Applications in Modern Power Grids," Energies, MDPI, vol. 10(12), pages 1-42, December.
    15. Henrik Zsiborács & Nóra Hegedűsné Baranyai & András Vincze & István Háber & Gábor Pintér, 2018. "Economic and Technical Aspects of Flexible Storage Photovoltaic Systems in Europe," Energies, MDPI, vol. 11(6), pages 1-17, June.
    16. Quashie, Mike & Bouffard, François & Joós, Géza, 2017. "Business cases for isolated and grid connected microgrids: Methodology and applications," Applied Energy, Elsevier, vol. 205(C), pages 105-115.
    17. Parra, David & Patel, Martin K., 2016. "Effect of tariffs on the performance and economic benefits of PV-coupled battery systems," Applied Energy, Elsevier, vol. 164(C), pages 175-187.
    18. Mariam, Lubna & Basu, Malabika & Conlon, Michael F., 2016. "Microgrid: Architecture, policy and future trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 477-489.
    19. Mohammed, Y.S. & Mustafa, M.W. & Bashir, N., 2014. "Hybrid renewable energy systems for off-grid electric power: Review of substantial issues," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 527-539.
    20. Li, Yanxue & Gao, Weijun & Ruan, Yingjun, 2018. "Performance investigation of grid-connected residential PV-battery system focusing on enhancing self-consumption and peak shaving in Kyushu, Japan," Renewable Energy, Elsevier, vol. 127(C), pages 514-523.
    21. Basher, Syed Abul & Raboy, David G., 2018. "The misuse of net present value in energy efficiency standards," Renewable and Sustainable Energy Reviews, Elsevier, vol. 96(C), pages 218-225.
    22. Milis, Kevin & Peremans, Herbert & Van Passel, Steven, 2018. "Steering the adoption of battery storage through electricity tariff design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 125-139.
    23. Moretti, M. & Djomo, S. Njakou & Azadi, H. & May, K. & De Vos, K. & Van Passel, S. & Witters, N., 2017. "A systematic review of environmental and economic impacts of smart grids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 888-898.
    24. Antans Sauhats & Laila Zemite & Lubov Petrichenko & Igor Moshkin & Aivo Jasevics, 2018. "Estimating the Economic Impacts of Net Metering Schemes for Residential PV Systems with Profiling of Power Demand, Generation, and Market Prices," Energies, MDPI, vol. 11(11), pages 1-19, November.
    25. Federica Cucchiella & Idiano D’Adamo & Massimo Gastaldi, 2017. "The Economic Feasibility of Residential Energy Storage Combined with PV Panels: The Role of Subsidies in Italy," Energies, MDPI, vol. 10(9), pages 1-18, September.
    26. McKenna, Russell, 2018. "The double-edged sword of decentralized energy autonomy," Energy Policy, Elsevier, vol. 113(C), pages 747-750.
    27. Hicks, Jarra & Ison, Nicola, 2018. "An exploration of the boundaries of ‘community’ in community renewable energy projects: Navigating between motivations and context," Energy Policy, Elsevier, vol. 113(C), pages 523-534.
    28. Zehir, Mustafa Alparslan & Batman, Alp & Sonmez, Mehmet Ali & Font, Aytug & Tsiamitros, Dimitrios & Stimoniaris, Dimitris & Kollatou, Theofano & Bagriyanik, Mustafa & Ozdemir, Aydogan & Dialynas, Evan, 2017. "Impacts of microgrids with renewables on secondary distribution networks," Applied Energy, Elsevier, vol. 201(C), pages 308-319.
    29. Damian Shaw-Williams & Connie Susilawati & Geoffrey Walker, 2018. "Value of Residential Investment in Photovoltaics and Batteries in Networks: A Techno-Economic Analysis," Energies, MDPI, vol. 11(4), pages 1-25, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Patrick Gregory B. Jara & Michael T. Castro & Eugene A. Esparcia & Joey D. Ocon, 2020. "Quantifying the Techno-Economic Potential of Grid-Tied Rooftop Solar Photovoltaics in the Philippine Industrial Sector," Energies, MDPI, vol. 13(19), pages 1-20, September.
    2. An, Jongbaek & Hong, Taehoon & Lee, Minhyun, 2022. "Determining the optimal trading price of electricity for energy consumers and prosumers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    3. Helena Martín & Jordi de la Hoz & Arnau Aliana & Sergio Coronas & José Matas, 2021. "Analysis of the Net Metering Schemes for PV Self-Consumption in Denmark," Energies, MDPI, vol. 14(7), pages 1-22, April.
    4. Carlos Fernández Bandera & Jose Pachano & Jaume Salom & Antonis Peppas & Germán Ramos Ruiz, 2020. "Photovoltaic Plant Optimization to Leverage Electric Self Consumption by Harnessing Building Thermal Mass," Sustainability, MDPI, vol. 12(2), pages 1-20, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miguel Carpintero-Rentería & David Santos-Martín & Josep M. Guerrero, 2019. "Microgrids Literature Review through a Layers Structure," Energies, MDPI, vol. 12(22), pages 1-22, November.
    2. Warneryd, Martin & Håkansson, Maria & Karltorp, Kersti, 2020. "Unpacking the complexity of community microgrids: A review of institutions’ roles for development of microgrids," Renewable and Sustainable Energy Reviews, Elsevier, vol. 121(C).
    3. Federica Cucchiella & Idiano D’Adamo & Massimo Gastaldi & Vincenzo Stornelli, 2018. "Solar Photovoltaic Panels Combined with Energy Storage in a Residential Building: An Economic Analysis," Sustainability, MDPI, vol. 10(9), pages 1-29, August.
    4. Gábor Pintér, 2020. "The Potential Role of Power-to-Gas Technology Connected to Photovoltaic Power Plants in the Visegrad Countries—A Case Study," Energies, MDPI, vol. 13(23), pages 1-14, December.
    5. Yazdanie, M. & Orehounig, K., 2021. "Advancing urban energy system planning and modeling approaches: Gaps and solutions in perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    6. Busch, Henner & Ruggiero, Salvatore & Isakovic, Aljosa & Hansen, Teis, 2021. "Policy challenges to community energy in the EU: A systematic review of the scientific literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    7. Dalia Streimikiene & Tomas Baležentis & Artiom Volkov & Mangirdas Morkūnas & Agnė Žičkienė & Justas Streimikis, 2021. "Barriers and Drivers of Renewable Energy Penetration in Rural Areas," Energies, MDPI, vol. 14(20), pages 1-28, October.
    8. Rae, Callum & Kerr, Sandy & Maroto-Valer, M. Mercedes, 2020. "Upscaling smart local energy systems: A review of technical barriers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    9. Norouzi, Farshid & Hoppe, Thomas & Elizondo, Laura Ramirez & Bauer, Pavol, 2022. "A review of socio-technical barriers to Smart Microgrid development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    10. Lai, Chun Sing & Locatelli, Giorgio & Pimm, Andrew & Tao, Yingshan & Li, Xuecong & Lai, Loi Lei, 2019. "A financial model for lithium-ion storage in a photovoltaic and biogas energy system," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    11. Castillo-Calzadilla, T. & Cuesta, M.A. & Olivares-Rodriguez, C. & Macarulla, A.M. & Legarda, J. & Borges, C.E., 2022. "Is it feasible a massive deployment of low voltage direct current microgrids renewable-based? A technical and social sight," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    12. David Drysdale & Brian Vad Mathiesen & Henrik Lund, 2019. "From Carbon Calculators to Energy System Analysis in Cities," Energies, MDPI, vol. 12(12), pages 1-21, June.
    13. Milad Zeraatpisheh & Reza Arababadi & Mohsen Saffari Pour, 2018. "Economic Analysis for Residential Solar PV Systems Based on Different Demand Charge Tariffs," Energies, MDPI, vol. 11(12), pages 1-19, November.
    14. Lai, Chun Sing & Locatelli, Giorgio, 2021. "Economic and financial appraisal of novel large-scale energy storage technologies," Energy, Elsevier, vol. 214(C).
    15. Paterakis, Nikolaos G. & Erdinç, Ozan & Catalão, João P.S., 2017. "An overview of Demand Response: Key-elements and international experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 871-891.
    16. Mehdizadeh, Ali & Taghizadegan, Navid & Salehi, Javad, 2018. "Risk-based energy management of renewable-based microgrid using information gap decision theory in the presence of peak load management," Applied Energy, Elsevier, vol. 211(C), pages 617-630.
    17. Scheller, Fabian & Bruckner, Thomas, 2019. "Energy system optimization at the municipal level: An analysis of modeling approaches and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 444-461.
    18. Say, Kelvin & John, Michele & Dargaville, Roger, 2019. "Power to the people: Evolutionary market pressures from residential PV battery investments in Australia," Energy Policy, Elsevier, vol. 134(C).
    19. Gabrielli, Paolo & Gazzani, Matteo & Martelli, Emanuele & Mazzotti, Marco, 2018. "Optimal design of multi-energy systems with seasonal storage," Applied Energy, Elsevier, vol. 219(C), pages 408-424.
    20. Haji Bashi, Mazaher & De Tommasi, Luciano & Le Cam, Andreea & Relaño, Lorena Sánchez & Lyons, Padraig & Mundó, Joana & Pandelieva-Dimova, Ivanka & Schapp, Henrik & Loth-Babut, Karolina & Egger, Christ, 2023. "A review and mapping exercise of energy community regulatory challenges in European member states based on a survey of collective energy actors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 172(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:12:y:2019:i:1:p:165-:d:194938. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.