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Aligning prosumers with the electricity wholesale market – The impact of time-varying price signals and fixed network charges on solar self-consumption

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  • Klein, Martin
  • Ziade, Ahmad
  • de Vries, Laurens

Abstract

PV-battery systems are currently not operated in an energy system optimal way as their operation heuristic (maximization of self-consumption) is generally unaffected by competitive market signals. To evaluate potential regulatory intervention, we propose a market alignment indicator which measures the relative economic efficiency of a prosumer battery compared to a benchmark system that is completely responsive to wholesale market prices. Investigating the case of PV-battery systems in Germany, we find that scarcity signals transmitted to prosumers improve the market alignment of PV-battery systems while retaining similar levels of self-consumption and autarky rates. Both dynamic prices for generation (time-varying feed-in remuneration) and consumption (real-time electricity prices) can improve welfare, that is lowering consumer expenditures for electricity at the wholesale market. The effectiveness of the respective instrument mix depends on the relative levels of the feed-in tariff, the grid consumption to be saved and the solar generation costs. Accordingly, increasing fixed network charges can have a significant positive impact on the market alignment of prosumer batteries if combined with dynamic prices, as they change the relative composition of retail prices.

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  • Klein, Martin & Ziade, Ahmad & de Vries, Laurens, 2019. "Aligning prosumers with the electricity wholesale market – The impact of time-varying price signals and fixed network charges on solar self-consumption," Energy Policy, Elsevier, vol. 134(C).
    • Handle: RePEc:eee:enepol:v:134:y:2019:i:c:s0301421519304793
    DOI: 10.1016/j.enpol.2019.110901
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    References listed on IDEAS

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    1. Scott Agnew & Paul Dargusch, 2015. "Effect of residential solar and storage on centralized electricity supply systems," Nature Climate Change, Nature, vol. 5(4), pages 315-318, April.
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    4. Luthander, Rasmus & Widén, Joakim & Munkhammar, Joakim & Lingfors, David, 2016. "Self-consumption enhancement and peak shaving of residential photovoltaics using storage and curtailment," Energy, Elsevier, vol. 112(C), pages 221-231.
    5. Alessandro Rubino, 2018. "Network charges in a low CO2 world," Nature Energy, Nature, vol. 3(4), pages 255-256, April.
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    Cited by:

    1. Alberto Fichera & Alessandro Pluchino & Rosaria Volpe, 2020. "Modelling Energy Distribution in Residential Areas: A Case Study Including Energy Storage Systems in Catania, Southern Italy," Energies, MDPI, vol. 13(14), pages 1-21, July.
    2. Say, Kelvin & Schill, Wolf-Peter & John, Michele, 2020. "Degrees of displacement: The impact of household PV battery prosumage on utility generation and storage," Applied Energy, Elsevier, vol. 276(C).
    3. Ying, Zhou & Xin-gang, Zhao & Zhen, Wang, 2020. "Demand side incentive under renewable portfolio standards: A system dynamics analysis," Energy Policy, Elsevier, vol. 144(C).
    4. Seyedfarzad Sarfarazi & Marc Deissenroth-Uhrig & Valentin Bertsch, 2020. "Aggregation of Households in Community Energy Systems: An Analysis from Actors’ and Market Perspectives," Energies, MDPI, vol. 13(19), pages 1-37, October.
    5. Henni, Sarah & Staudt, Philipp & Weinhardt, Christof, 2021. "A sharing economy for residential communities with PV-coupled battery storage: Benefits, pricing and participant matching," Applied Energy, Elsevier, vol. 301(C).
    6. Jiang, Hou & Zhang, Xiaotong & Yao, Ling & Lu, Ning & Qin, Jun & Liu, Tang & Zhou, Chenghu, 2023. "High-resolution analysis of rooftop photovoltaic potential based on hourly generation simulations and load profiles," Applied Energy, Elsevier, vol. 348(C).
    7. Aniello, Gianmarco & Bertsch, Valentin, 2023. "Shaping the energy transition in the residential sector: Regulatory incentives for aligning household and system perspectives," Applied Energy, Elsevier, vol. 333(C).
    8. Yamamoto, Yoshihiro, 2021. "A bidirectional payment system for mitigating the supply–demand imbalance among prosumers based on the core of coalitional game theory under the enhanced use of renewable energy," Energy Economics, Elsevier, vol. 96(C).
    9. Fouad El Gohary & Sofie Nyström & Lizette Reitsma & Cajsa Bartusch, 2021. "Identifying Challenges in Engaging Users to Increase Self-Consumption of Electricity in Microgrids," Energies, MDPI, vol. 14(5), pages 1-27, February.

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