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Economic Benefits of Direct Current Technology for Private Households and Peer-to-Peer Trading in Germany

Author

Listed:
  • Liu, Xueying

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Madlener, Reinhard

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

With the increased adoption of solar photovoltaics (PV) and batteries, and the use of electronics and appliances powered by direct current (DC), e.g. heat pumps, and electric vehicles (EVs), DC technologies offer higher energy efficiency compared to the entrenched alternating current (AC) technologies. However, the adoption of DC infrastructure is limited due to path dependency and lock-in effects of the currently dominant electric infrastructure based on AC technology. Efficiency gains in energy communities and for households may facilitate the wider-scale adoption of DC technologies. In this study, we simulate 600 household load profiles based on twelve different representative household types and estimate the possible energy cost savings of a DC architecture compared to an AC architecture under various electricity prices and feed-in-tariff levels. This is done for different combinations of battery and PV sizes, and for the case of a peer-to-peer (P2P) trading community. The results show that the DC home yields cost savings of around €90 p.a. for the median household when compared to an AC home. Moreover, we find that neither the share of DC load nor household characteristics impacts cost savings significantly, while the total load remains the most important factor influencing the cost-saving potential. In addition, while cost savings do not necessarily increase with larger PV and battery sizes, they do increase with the possibility of households to engage in P2P trading. The results yield an improved understanding regarding the cost-saving potentials of DC homes and their expected diffusion in Germany. This is especially relevant for future large-scale adoption of solar PV, batteries, and EVs in the future, thus helping both policy-makers and companies alike to better assess the market potential of DC homes.

Suggested Citation

  • Liu, Xueying & Madlener, Reinhard, 2021. "Economic Benefits of Direct Current Technology for Private Households and Peer-to-Peer Trading in Germany," FCN Working Papers 7/2021, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2021_007
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    References listed on IDEAS

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    Cited by:

    1. Schmitz, Hendrik & Madlener, Reinhard, 2021. "Preferences for Energy Retrofit Investments Among Low-income Renters," FCN Working Papers 8/2021, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
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    More about this item

    Keywords

    DC technology; Choice of Technology; Diffusion; Industrial policy; Path dependence;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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