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Modeling coordination between renewables and grid: Policies to mitigate distribution grid constraints using residential PV-battery systems

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  • Neetzow, Paul
  • Mendelevitch, Roman
  • Siddiqui, Sauleh

Abstract

Distributed photo-voltaic (PV) generation is one of the pillars of energy transitions around the world, but its deployment in the distribution grid requires costly reinforcements and expansions. Prosumage – consisting of a household-level PV unit coupled with a battery storage system – has been proposed as an effective means to facilitate the integration of renewable energy sources and reduce distribution grid stress. However, tapping its full potential requires regulatory interventions; otherwise, system costs could rise despite increasing flexibility. We analyze the effectiveness of different policy schemes to mitigate the need for distribution capacity expansion by incentivizing beneficial storage operation. Our novel top-down modeling approach allows analyzing effects on market prices, storage dispatch, induced distribution grid requirements, system costs, and distributional implications. Based on German power system data, numerical results indicate that distribution grid requirements can be reduced through simple feed-in policies. A uniform limit on maximum grid feed-in can leave distribution system operators better off, even if they fully compensate prosumage households for foregone revenue. Policies imposing more differentiated limits at the regional level result in only marginal efficiency improvements. Complete self-sufficiency (autarky) is socially undesirable, as it confines important balancing potential and can increase system costs despite adding storage.

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  • Neetzow, Paul & Mendelevitch, Roman & Siddiqui, Sauleh, 2019. "Modeling coordination between renewables and grid: Policies to mitigate distribution grid constraints using residential PV-battery systems," Energy Policy, Elsevier, vol. 132(C), pages 1017-1033.
    • Handle: RePEc:eee:enepol:v:132:y:2019:i:c:p:1017-1033
    DOI: 10.1016/j.enpol.2019.06.024
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    Cited by:

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    2. Say, Kelvin & John, Michele, 2021. "Molehills into mountains: Transitional pressures from household PV-battery adoption under flat retail and feed-in tariffs," Energy Policy, Elsevier, vol. 152(C).
    3. Luca Casamassima & Luigi Bottecchia & Axel Bruck & Lukas Kranzl & Reinhard Haas, 2022. "Economic, social, and environmental aspects of Positive Energy Districts—A review," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 11(6), November.
    4. Mukhopadhyay, Bineeta & Das, Debapriya, 2020. "Multi-objective dynamic and static reconfiguration with optimized allocation of PV-DG and battery energy storage system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 124(C).
    5. Steinhäuser, J. Micha & Eisenack, Klaus, 2020. "How market design shapes the spatial distribution of power plant curtailment costs," Energy Policy, Elsevier, vol. 144(C).
    6. Claudia Gunther & Wolf-Peter Schill & Alexander Zerrahn, 2019. "Prosumage of solar electricity: tariff design, capacity investments, and power system effects," Papers 1907.09855, arXiv.org.

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    More about this item

    Keywords

    Residential storage; Renewable integration; Distribution system operator; Prosumage; Policy; Multi-level games; MPEC;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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