Trading in Local Energy Markets and Energy Communities: Concepts, Structures and Technologies PDF
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Lecture Notes in Energy 93 Miadreza Shafie-khah Amin Shokri Gazafroudi Editors Trading in Local Energy Markets and Energy Communities Concepts, Structures and Technologies Lecture Notes in Energy Volume 93 LectureNotesinEnergy(LNE)isaseriesthatreportsonnewdevelopmentsinthe studyofenergy:fromscienceandengineeringtotheanalysisofenergypolicy.The series’scopeincludesbutisnotlimitedto,renewableandgreenenergy,nuclear,fossil fuels and carbon capture, energy systems, energy storage and harvesting, batteries andfuelcells,powersystems,energyefficiency,energyinbuildings,energypolicy,as wellasenergy-relatedtopicsineconomics,managementandtransportation.Books published in LNE are original and timely and bridge between advanced textbooks andtheforefrontofresearch.ReadersofLNEincludepostgraduatestudentsandnon- specialistresearcherswishingtogainanaccessibleintroductiontoafieldofresearch aswellasprofessionalsandresearcherswithaneedforanup-to-datereferencebook onawell-definedtopic.Theseriespublishessingle-andmulti-authoredvolumesas wellasadvancedtextbooks. **Indexed in Scopus and EI Compendex** The Springer Energy board welcomes yourbookproposal.PleasegetintouchwiththeseriesviaAnthonyDoyle,Executive Editor,Springer([email protected]) · Miadreza Shafie-khah Amin Shokri Gazafroudi Editors Trading in Local Energy Markets and Energy Communities Concepts, Structures and Technologies Editors MiadrezaShafie-khah AminShokriGazafroudi UniversityofVaasa StromdaoGmbH Vaasa,Finland Mauer,Germany ISSN 2195-1284 ISSN 2195-1292 (electronic) LectureNotesinEnergy ISBN 978-3-031-21401-1 ISBN 978-3-031-21402-8 (eBook) https://doi.org/10.1007/978-3-031-21402-8 ©TheEditor(s)(ifapplicable)andTheAuthor(s),underexclusivelicensetoSpringerNature SwitzerlandAG2023 Thisworkissubjecttocopyright.AllrightsaresolelyandexclusivelylicensedbythePublisher,whether thewholeorpartofthematerialisconcerned,specificallytherightsoftranslation,reprinting,reuse ofillustrations,recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,and transmissionorinformationstorageandretrieval,electronicadaptation,computersoftware,orbysimilar ordissimilarmethodologynowknownorhereafterdeveloped. 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ThisSpringerimprintispublishedbytheregisteredcompanySpringerNatureSwitzerlandAG Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland Contents LocalEnergyMarkets:FromConceptstoReality .................... 1 ScotWheeler, FilibertoFele, Masao¯ Ashtine, ThomasMorstyn, DavidWallom,andMalcolmMcCulloch LocalEnergyMarkets:DesignandStructures ....................... 39 IvanLeuskov,SaberTalari,andWolfgangKetter ActivePlayersinLocalEnergyMarkets ............................. 71 FloraCharbonnier,ThomasMorstyn,andMalcolmMcCulloch EnergyCommunityPreferencesofSolarProsumersandElectricity ConsumersintheDigitalEnergyEcosystem ......................... 113 SannaTuomela, TuomoHänninen, EnniRuokamo, NettaIivari, MariaKopsakangas-Savolainen,andRauliSvento AnOverviewofImplementationofP2PEnergyTradingMethods ontheElectricPowerSystems ...................................... 137 SaharSeyyedeh-Barhagh, MehdiAbapour, BehnamMohammadi-ivatloo,andMiadrezaShafie-khah PromotingJustTransitionorEnhancingInequalities?Reflection on Different Energy Community Business Models in Terms ofEnergyJustice .................................................. 151 EllaTolonen,ShahRukhShakeel,andJouniK.Juntunen LocalFlexibilityMarketsandBusinessModels ....................... 181 FelixZornow, SaberTalari, WolfgangKetter, MahoorEbrahimi, andMiadrezaShafie-khah v vi Contents Generation-Side and Demand-Side Player-Centric Tradings intheLEM:Rule-EmpoweredModelsandCaseStudies .............. 221 M.ImranAzim,AminShokriGazafroudi,andMohsenKhorasany A Market-Based Mechanism for Local Energy Trading inIntegratedElectricity-HeatNetworks ............................. 241 SaraHaghifam,HannuLaaksonen,andMiadrezaShafie-khah Local Energy Markets: From Concepts to Reality ScotWheeler,FilibertoFele,Masao¯ Ashtine,ThomasMorstyn, DavidWallom,andMalcolmMcCulloch 1 Introduction Asnationsseektorapidlydecarbonisetheenergysectortomeetnationaldecarbon- isationtargets,electricitynetworksareseeingaradicaltransformationinhowthey operate,particularlyatthelocallevelor‘grid-edge’.LocalEnergyMarkets(LEMs) thatfacilitatethetransactionofpowersystemservicesbetweennetworkstakehold- ersareenvisionedasamechanismtoencourageandcoordinateactiveparticipation withinaSmartLocalEnergySystem(SLES)(Charbonnieretal.2022;Councilof EuropeanEnergyRegulators2017). The widespread electrification of the heating and transport sectors, and the increaseindecentralisedgenerationtechnologies,isleadingtoadramaticincreasein thenumberofDistributedEnergyResources(DERs).Digitalisationandthegrowthof smartdevicesinhomesandbusinessesallowtraditionallyinflexibleprimaryenergy demandstobecomecontrollableandthereforeflexible. ScotWheeler,FilibertoFeleandMasao¯Ashtinecontributedequallytothiswork. B S.Wheeler( )·F.Fele·M.Ashtine·D.Wallom·M.McCulloch DepartmentofEngineeringScience,UniversityofOxford,ParksRoad,OxfordOX13PJ, UnitedKingdom e-mail:[email protected] F.Fele e-mail:fi[email protected] M.Ashtine e-mail:[email protected] D.Wallom e-mail:[email protected] M.McCulloch e-mail:[email protected] T.Morstyn SchoolofEngineering,UniversityofEdinburgh,RobertStevensonRoad,EdinburghEH93FB, UnitedKingdom e-mail:[email protected] ©TheAuthor(s),underexclusivelicensetoSpringerNatureSwitzerlandAG2023 1 M.Shafie-khahandA.S.Gazafroudi(eds.),TradinginLocalEnergyMarkets andEnergyCommunities,LectureNotesinEnergy93, https://doi.org/10.1007/978-3-031-21402-8_1 2 S.Wheeleretal. ManylocalandglobalbenefitscanbeachievedthroughthecoordinationofDERs. Theseinclude:revenuestackingforDERs,reducedbills,betterutilisationofnetwork (contracted)capacity,voltageandnetworkconstraintsmanagement,reducedenergy transport,avoidance(ordeferral)ofinfrastructureupgrades,andsystembalancing. Most importantly, coordination and cooperation of DERs can yield environmental gains by supporting the penetration of renewable generation, and facilitate social cohesionintheprocess(AbbasandChowdhury2021;Charbonnieretal.2022;Eid et al. 2016; Pumphrey et al. 2020). Studies on the impact of flexibility and SLES deploymentacrossthenationalGBsystemestimatebetween£1.1bn/yrand£5bn/yr, ontheorderof5%ofthetotalannualisedsystemcost(Aunedietal.2022;Picloetal. 2022). Whilst many smart DER technologies and platforms already exist at high tech- nology readiness level (TRL), whole system integration and demonstration within real-world markets remains limited. The latter require unique sets of stakeholders andcommunitieswillingandcapableofworkingtogetherwithinnewandunknown market environments. LEMs require coordination of technology and people: this entailsnotjusteconomicandtechnicalinteraction,butthefosteringoflegal,digital, data,regulatoryandsocialrelationshipsinthecontextofenergysystems. Thischapterdiscussesthetechno-sociallearningoutputsgainedfromtransform- ingLEMconceptsintoreal-worldimplementationthroughtheSLESdemonstrator project, Project LEO (Local Energy Oxfordshire) henceforth referred to simply as LEO, based in Oxfordshire, United Kingdom (UK). While some of the activities withinLEOarespecifictothetechnical,socialandregulatoryenergylandscapein the UK, many of the concepts are reflected in local energy transitions happening aroundtheglobe. LEOisoneofthemostambitiousandholisticsmartgridtrialseverconductedin theUK.PartfundedbytheIndustrialStrategyChallengeFund’s‘Prosperingfrom theEnergyRevolution’(PFER)fund(UKResearchandInnovation(UKRI)2022), LEOseekstounderstandhownewLEMsandimprovedlocalengagementcanunlock additionalsocietal,financialandenvironmentalvalueforhouseholds,businessesand communitiesprovidedbyasmarter,moreflexible,electricitysystem(ProjectLEO 2018).LEObringstogetheranexceptionalsetofsystemstakeholdersfromtheenergy industry,localgovernment,communityorganisations,andacademia.Bymimicking therequirementsofthefutureelectricitysystemLEOisbuildinganevidencebase thatwillinformfuturemarketdesign. LEOoperatesinparalleltotheTRANSITIONproject,ledbyScottishandSouth- ernElectricityNetworks(SSEN)andfundedbytheGovernment’senergyregulator in Great Britain, Ofgem (Scottish and Southern Energy Networks (SSEN) 2022). TRANSITIONisdesigningandimplementingtrialsthatsupportthetransitionfrom theroleofDistributionNetworkOperator(DNO)tothatofDistributionSystemOper- ator(DSO).WhiletheexactmodelofaDSOisstilltobeagreedbytheindustry,it reflectsthemovetowardsthe‘smart-grid’whichdeliversadditionaldata,monitoring andcontrolsystemsatthelocalnetworkleveltoenablebi-directionalenergyflow creatingamoreactiveandcustomerledflexiblenetworkwhilemaintainingsafety LocalEnergyMarkets:FromConceptstoReality 3 andreliability;thisisincontrasttotraditionalDNOactivitieswhichlargelyfocuses oninfrastructuredevelopmentandmaintenance. Thischapterisorganisedintotwomainparts.Section2discussescoreconcepts ofLEMsandhowtheyrelatetothemarketdesignedwithinProjectLEO.Section3 discusseshowtheseLEMconceptswereimplementedinareal-worlddemonstrator project,theagileprocessdevelopedtomanagethis,andadiscussionaroundsome ofthekeychallengesfaced.Finally,conclusionsaredrawnandasetofrecommen- dationsaremade. 2 Concepts LEMsareemergingover alternativessuchasdirectcentralisedcontrolornetwork reinforcement as the favoured mechanism for the coordination of potentially mil- lionsofflexibleDERsforbetternetworkutilisationandlocalsocio-economicand environmentalbenefit(CouncilofEuropeanEnergyRegulators2017).Thissection describes some of the key concepts behind LEMs, particularly for the facilitation oflocalflexibilityserviceswithincommunitiesandwithnetworkoperators.Firstly wedescribethedriversbehindLEMsandthechallengesinenablingthe‘smalland many’ to participate. Next we discuss the need for flexibility services, which are importantandwhatopportunitiesexisttostackrevenuestreamsthroughintegrated markets.Thenweintroducetheconceptoffairandequitablemarketsbeforefinally discussingthedataanddigitalisationrequirementsthatareneededtoenableLEMs tooperatesuccessfully. 2.1 LocalEnergyMarkets:TheMainDrivers Driven by cost reduction of small-scale renewable generation and energy storage, andtheelectrificationoftransportandheating/coolingdemandimpulsedbythenet zeroemissionsgoal,theelectricitysectorisbecomingmoredecentralisedandlocal in nature. As the aforementioned technologies populate the edge of the network, gridoperatorsfacegrowingconcernwiththereliabilityandresilienceoftheexisting distributioninfrastructure. To ease the deployment of this new fleet of generation assets and loads, a con- sortium of European energy regulators recognised four mechanisms for enabling grid support from generation and/or demand flexibility in the distribution network (CouncilofEuropeanEnergyRegulators2017):rulesbasedapproach,networktar- iffs,connectionagreements,andmarketbasedprocurement.Withinthelatter,LEMs havebeenreceivingparticularattentionastheyallowforacompetitiveservicepro- visionfromDERsandguaranteethenecessarydegreeofdecentralisation(Lezama etal.2019;SchittekatteandMeeus2020).
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