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Dynamic Net Metering for Energy Communities

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  • Ahmed S. Alahmed
  • Lang Tong

Abstract

We propose a social welfare maximizing market mechanism for an energy community that aggregates individual and community-shared energy resources under a general net energy metering (NEM) policy. Referred to as Dynamic NEM (D-NEM), the proposed mechanism dynamically sets the community NEM prices based on aggregated community resources, including flexible consumption, storage, and renewable generation. D-NEM guarantees a higher benefit to each community member than possible outside the community, and no sub-communities would be better off departing from its parent community. D-NEM aligns each member's incentive with that of the community such that each member maximizing individual surplus under D-NEM results in maximum community social welfare. Empirical studies compare the proposed mechanism with existing benchmarks, demonstrating its welfare benefits, operational characteristics, and responsiveness to NEM rates.

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  • Ahmed S. Alahmed & Lang Tong, 2023. "Dynamic Net Metering for Energy Communities," Papers 2306.13677, arXiv.org, revised Jan 2024.
    • Handle: RePEc:arx:papers:2306.13677
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    References listed on IDEAS

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