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On the Importance of Grid Tariff Designs in Local Energy Markets

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  • Sebastian Schreck

    (Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany
    Department of Electrical Engineering and Computer Science, Technical University of Darmstadt, Landgraf-Georg-Str. 4, 64283 Darmstadt, Germany)

  • Robin Sudhoff

    (Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany
    Department of Electrical Engineering and Computer Science, Technical University of Darmstadt, Landgraf-Georg-Str. 4, 64283 Darmstadt, Germany)

  • Sebastian Thiem

    (Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany)

  • Stefan Niessen

    (Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany
    Department of Electrical Engineering and Computer Science, Technical University of Darmstadt, Landgraf-Georg-Str. 4, 64283 Darmstadt, Germany)

Abstract

Local Energy Markets (LEMs) were recently proposed as a measure to coordinate an increasing amount of distributed energy resources on a distribution grid level. A variety of market models for LEMs are currently being discussed; however, a consistent analysis of various proposed grid tariff designs is missing. We address this gap by formulating a linear optimization-based market matching algorithm capable of modeling a variation of grid tariff designs. A comprehensive simulative study is performed for yearly simulations of a rural, semiurban, and urban grids in Germany, focusing on electric vehicles, heat pumps, battery storage, and photovoltaics in residential and commercial buildings. We compare energy-based grid tariffs with constant, topology-dependent and time-variable cost components and power-based tariffs to a benchmark case. The results show that grid tariffs with power fees show a significantly higher potential for the reduction of peak demand and feed-in (30–64%) than energy fee-based tariffs (8–49%). Additionally, we show that energy-based grid tariffs do not value the flexibility of assets such as electric vehicles compared to inflexible loads. A postprocessing of market results valuing the reduction of power peaks is proposed, enabling a compensation for the usage of asset flexibility.

Suggested Citation

  • Sebastian Schreck & Robin Sudhoff & Sebastian Thiem & Stefan Niessen, 2022. "On the Importance of Grid Tariff Designs in Local Energy Markets," Energies, MDPI, vol. 15(17), pages 1-25, August.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:17:p:6209-:d:898223
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    References listed on IDEAS

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    Cited by:

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    2. Yannick Pohlmann & Carl-Friedrich Klinck, 2023. "Techno-Economic Potential of V2B in a Neighborhood, Considering Tariff Models and Battery Cycle Limits," Energies, MDPI, vol. 16(11), pages 1-24, May.
    3. Barbara Siuta-Tokarska & Sylwia Kruk & Paweł Krzemiński & Agnieszka Thier & Katarzyna Żmija, 2022. "Digitalisation of Enterprises in the Energy Sector: Drivers—Business Models—Prospective Directions of Changes," Energies, MDPI, vol. 15(23), pages 1-21, November.
    4. Gjorgievski, Vladimir Z. & Velkovski, Bodan & Francesco Demetrio, Minuto & Cundeva, Snezana & Markovska, Natasa, 2023. "Energy sharing in European renewable energy communities: Impact of regulated charges," Energy, Elsevier, vol. 281(C).
    5. Pena-Bello, Alejandro & Junod, Robin & Ballif, Christophe & Wyrsch, Nicolas, 2023. "Balancing DSO interests and PV system economics with alternative tariffs," Energy Policy, Elsevier, vol. 183(C).

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