Assessing the impacts of energy sharing on low voltage distribution networks: Insights into electrification and electricity pricing in Germany

The shift towards renewable energy sources, which is especially significant in the residential sector, relies on distributed energy resources (DER) like PV systems, heat pumps, battery storage systems, and electric vehicles. Integrating DERs into low-voltage distribution networks presents challenges, including potential grid instabilities. Energy sharing is a consumer-centric market approach, allowing consumers and prosumers to establish renewable energy communities (RECs) and share energy generated via DERs. Existing literature concerning energy sharing often prioritizes highlighting the benefits it offers to participants, rather than examining its direct impacts on established system boundaries such as distribution grid infrastructure. To this end, we employ a sequential modeling approach to study the integration of energy sharing schemes facilitated by RECs and their impacts on grid performance metrics, such as component loading, voltage magnitudes, and grid reinforcement costs. We examine twelve scenarios reflecting different REC configurations, DER adoption levels, and pricing strategies for both current (2023) and future (2037) contexts in Germany. Our findings indicate that implementing energy sharing not only results in considerable cost savings at the community level (with potential savings of up to 80% compared to scenarios without energy sharing) but also brings about significant reductions in grid asset loading (with decreases in transformer loading of up to 68% and line loading of up to 62%, compared to baseline scenarios). Conversely, we show that energy sharing can significantly influence voltage magnitudes at various nodes within the grid, potentially leading to substantial increases in grid reinforcement costs in future scenarios (i.e., 2037). Our research provides valuable insights for REC participants, regulators, and DSOs to understand the impacts of energy sharing on European low-voltage distribution networks and explore mitigation options, such as grid reinforcement measures.