Decentralization in the electricity system: At the household, community and city levels

Recent years have seen a rise in the number of implementations of small-scale generation and storage technologies for electricity and heat at different levels in the energy system. This trend towards decentralization of the system is driven by rapid decrease in technology costs, as well as the intentions expressed by various stakeholders to contribute to a carbon-neutral energy system. This thesis investigates the investments and operation of generation and storage technologies at three levels within the energy system: i) residential Prosumer households, which use photovoltaic (PV)-battery systems to supply and shift their electricity demand; ii) Prosumer communities, in which prosumer households share electricity; and iii) Smart integrated cities, which make use of interconnections between the electricity, heating, and transport sectors.Three techno-economic optimization modeling methods are utilized to study technology investment and dispatch, self-consumption of electricity and heat at different levels of decentralization, and the interactions that occur between decentralized systems and the centralized electricity system. Prosumer households are modeled by combining a household electricity cost optimization model and a northern European electricity system dispatch model. The optimization model developed to study prosumer communities directly compares the PV-battery system investments and operations in individual prosumer households and in prosumer households within a community. The city energy system optimization model is designed to analyze interconnections between the urban electricity and heat (and in future work, also transport) sectors.It is shown that prosumer households under the current Swedish tariff system experience a strong incentive to self-consume PV-generated electricity within their households and experience a weak incentive to operate their battery systems such as to reduce operational costs within the electricity system. Being part of a prosumer community can provide the highest monetary benefit to prosumer households for the purpose of reducing the connection capacity to the centralized system. Prosumer communities exhibit different patterns of electricity trade to the centralized system than individual prosumer households, due to local balancing of electricity within the community. On the city level, the installation of local generation and storage technologies for electricity and heat can reduce the stress on the connection to the centralized electricity system. Thus, local electricity generation can help to meet increases in electricity demand and demand peaks at the city level, stemming from city growth or electrification of energy use within the city. An interaction between the electricity and heating sectors in the city energy system can in the modeling results be seen in, for example, the utilization of power-to-heat technologies, which often use electricity during low-cost hours. Storage systems for electricity and heat are utilized within the city to shift electricity and heat between different periods

Decentralization in energy systems - Low-carbon technologies and sector coupling on the household, community and city scales

The number of installations of distributed energy technologies, such as solar photovoltaic (PV) and battery systems, has increased dramatically in recent decades. The required transition towards a decarbonized energy system entails electrification of the different sectors. Both these developments provide new opportunities for energy autonomy and sector coupling in decentralized systems, and allow local actors to contribute to reducing their climate impact.The aim of this thesis is to study the utilization of local energy technologies and the potential for system flexibility in three decentralized energy systems: prosumer households, prosumer communities, and city energy systems. In addition, the thesis investigates the interactions of decentralized systems with the surrounding regional energy system. In this work, four techno-economic energy system optimization models are used. In the first model, PV-battery systems in prosumer households are analyzed within the North European electricity system dispatch. In the second model, they are examined as part of prosumer communities. In the third, city-scale model the investment and dispatch in the electricity and district heating sectors are optimized, while considering flexible and inflexible charging of electric cars and buses. The fourth model combines the city and regional scales, to study the operation, design and interaction of both systems, while considering different connection capacities for electricity exchange between the systems.The results show that the economic incentives for electricity self-consumption in prosumer households promote a way of utilizing household battery systems that is not in line with the least‑cost dispatch of the electricity system. Consequently, prosumer households are, within the current tariff structure, unlikely to provide flexibility that would assist the balancing of intermittency in the regional electricity system. In prosumer communities, where prosumer households have the possibility to share electricity, a financial benefit accrues to the participating households primarily when there is a reduced connection capacity for electricity exchange to the energy provider. For city energy systems, it is shown that power-to-heat technologies in combination with thermal storage systems and flexibility with regards to the charging of battery electric vehicles facilitate the uptake of local solar PV. The city electric car fleet provides the potential to postpone up to 85% of the demand for charging, which leads to more than twice the share of solar PV in the electricity mix for charging, as compared with inflexible charging. A 50% connection capacity between the city-scale and regional-scale energy systems implies only 3% higher costs for the installation and operation of energy technologies on both scales, as compared with a system that has 100% connection capacity.This thesis outlines the potential for increased decentralization of the energy supply and highlights the need for strategies to integrate decentralized and centralized energy systems

The impact of limited electricity connection capacity on energy transitions in cities

We study the impacts of the connection capacity for electricity transfer between a city and a regional energy system on the design and operation of both systems. The city energy system is represented by the aggregate energy demand of three cities in southern Sweden, and the regional energy system is represented by Swedish electricity price area SE3. We minimize the investment and running costs in the electricity and district heating sectors, considering different levels of connection capacity between the city and the regional energy systems; connection capacities equal to 100%, 75%, 50% and 0% of the maximum city electricity demand. We find that a system design with 50% connection capacity is only 3% more expensive in terms of total costs than a system with 100% connection capacity. However, shifting electricity generation capacity from the regional to the city energy system with 50%, as compared to 100%, connection capacity leads to a higher marginal cost for electricity in the city than in the region. With the highest connection capacities, 75% and 100%, the district heating sector in the city can support wind power integration in the regional energy system by means of power-to-heat operation. Modeling systems with different connection capacities makes our results applicable to other fast-growing cities with potential to increase local electricity production and sector coupling between the electricity, district heating and electrified transport sectors

Smart electric vehicle charging strategies for sectoral coupling in a city energy system

The decarbonization of city energy systems plays an important role to meet climate targets. We examine the consequences of integrating electric cars and buses into the city energy system (60% of private cars and 100% of public buses), using three different charging strategies in a modelling tool that considers local generation and storage of electricity and heat, electricity import to the city, and investments to achieve net-zero emissions from local electricity and heating in 2050. We find that up to 85% of the demand for the charging of electric cars is flexible and that smart charging strategies can facilitate 62% solar PV in the charging electricity mix, compared to 24% when cars are charged directly when parked. Electric buses are less flexible, but the timing of charging enables up to 32% to be supplied by solar PV. The benefit from smart charging to the city energy system can be exploited when charging is aligned with the local value of electricity in the city. Smart charging for cars reduces the need for investments in stationary batteries and peak units in the city electricity and heating sectors. Thus, our results point to the importance of sectoral coupling to exploit flexibility options in the city electricity, district heating and transport sectors

Small-Scale Communities Are Sufficient for Cost- and Data-Efficient Peer-to-Peer Energy Sharing

Due to ever lower cost, investments in renewable electricity generation and storage have become more attractive to electricity consumers in recent years. At the same time, electricity generation and storage have become something to share or trade locally in energy communities or microgrid systems. In this context, peer-to-peer (P2P) sharing has gained attention, since it offers a way to optimize the cost-benefits from distributed resources, making them financially more attractive. However, it is not yet clear in which situations consumers do have interests to team up and how much cost is saved through cooperation in practical instances. While introducing realistic continuous decisions, through detailed analysis based on large-scale measured household data, we show that the financial benefit of cooperation does not require an accurate forecasting. Furthermore, we provide strong evidence, based on analysis of the same data, that even P2P networks with only 2--5 participants can reach a high fraction (96% in our study) of the potential gain, i.e., of the ideal offline (i.e., non-continuous) achievable gain. Maintaining such small communities results in much lower associated costs and better privacy, as each participant only needs to share its data with 1--4 other peers. These findings shed new light and motivate requirements for distributed, continuous and dynamic P2P matching algorithms for energy trading and sharing

Prosumers in the Electricity System—Household vs. System Optimization of the Operation of Residential Photovoltaic Battery Systems

An increase in distributed small-scale generation and storage in residential prosumer households requires an understanding of how the household-controlled operation of these distributed technologies differ from a system-optimal utilization. This paper aims at investigating how residential photovoltaic (PV)-battery systems are operated, given different assumed incentives, and whether or not a prosumer induced operational pattern differs from what is desirable from a total electricity system point of view. The work combines a household optimization model that minimizes the annual household electricity bill for two price zones in southern Sweden with a dispatch model for the northern European electricity supply system. The results show significant differences in the charging and discharging patterns of residential batteries. A household annual electricity cost minimization gives many hours in which only a fraction of the battery capacity is used for charging and discharging, mainly driven by incentives to maximize self-consumption of PV-generated electricity. In contrast, in a total electricity system operational cost minimization larger fractions of the available battery capacity are utilized within single hours. In the total system optimization case, the batteries are charged and discharged less frequently and the energy turnover in the batteries is only half that of the household optimization case. For all the cases studied, the hourly electricity price provides only a limited incentive for households to operate their batteries in a system-optimal manner

Actuating the European Energy System Transition: Indicators for Translating Energy Systems Modelling Results into Policy-Making

In this paper, we define indicators, with a focus on the electricity sector, that translate the results of energy systems modelling to quantitative entities that can facilitate assessments of the transitions required to meet stringent climate targets. Such indicators, which are often overlooked in model scenario presentations, can be applied to make the modelling results more accessible and are useful for managing the transition on the policy level, as well as for internal evaluations of modelling results. We propose a set of 13 indicators related to: 1) the resource and material usages in modelled energy system designs; 2) the rates of transition from current to future energy systems; and 3) the energy security in energy system modelling results. To illustrate its value, the proposed set of indicators is applied to energy system scenarios derived from an electricity system investment model for Northern Europe. We show that the proposed indicators are useful for facilitating discussions, raising new questions, and relating the modelling results to Sustainable Development Goals and thus facilitate better policy processes. The indicators presented here should not be seen as a complete set, but rather as examples. Therefore, this paper represents a starting point and a call to other modellers to expand and refine the list of indicators

Effects of power-to-gas on power systems: A case study of Denmark

The power-to-gas (PtG) technology is an energy storage option for variation management in power systems with high penetration of variable electricity generation. This paper investigates the effects of PtG units on the economic dispatch of power systems for the case of Denmark. The paper proposes a multi-period scheduling model for PtG based on a dc optimal power flow framework. The model has been used to study the operation of PtG in a simplified Danish power transmission system for a number of scenarios involving the sizes and locations of PtG over a period of one year. The results indicate that the utilization of PtG will reduce the total system operation cost by 4.1% and lead to a reduction in wind power curtailment of up to 2%, as well as a reduction in number of time steps with transmission network congestion. Distributing PtG over three locations in the system investigated will decrease the wind power curtailment even further

Interconnection of the electricity and heating sectors to support the energy transition in cities

The electricity, heating, and transport sectors in urban areas all have to contribute to meeting stringent climate targets. Cities will face a transition from fossil fuels to renewable sources, with electricity acting as a cross-sectorial energy carrier. Consequently, the electricity demand of cities is expected to rise, in a situation that will be exacerbated by ongoing urbanisation and city growth. As alternative to an expansion of the connection capacity to the national grid, local measures can be considered within city planning in order to utilize decentralised electricity generation, synergies between the heating and electricity sectors, and flexibility through energy storage technologies. This work proposes an optimisation model that interconnects the electricity, heat, and transport sectors in cities. We analyse the investments in and operation of an urban energy system, using the City of Gothenburg as an example. We find that the availability of electricity from local solar PV together with thermal storage technologies increase the value of using power-to-heat technologies, such as heat pumps. High biomass prices together with strict climate targets enhance the importance of electricity in the district heating sector. A detailed understanding of the integration of local low-carbon energy technologies can give urban planners and other city stakeholders the opportunity to take an active role in the city’s energy transition

Organizing prosumers into electricity trading communities: Costs to attain electricity transfer limitations and self‐sufficiency goals

Among household electricity end users, there is growing interest in local renewable electricity generation and energy independence. Community‐based and neighborhood energy projects, where consumers and prosumers of electricity trade their energy locally in a peer‐to‐peer system, have started to emerge in different parts of the world. This study investigates and compares the costs incurred by individual households and households organized in electricity trading communities in seeking to attain greater independence from the centralized electricity system. This independence is investigated with respect to: (i) the potential to reduce the electricity transfer capacity to and from the centralized system and (ii) the potential to increase self‐sufficiency. An optimization model is designed to analyze the investment and operation of residential photovoltaic battery systems. The model is then applied to different cases in a region of southern Sweden for year 2030. Utilizing measured electricity demand data for Swedish households, we show that with a reduced electricity transfer capacity to the centralized system, already a community of five residential prosumers can supply the household demand at lower cost than can prosumers acting individually. Grouping of residential prosumers in an electricity trading community confers greater benefits under conditions with a reduced electricity transfer capacity than when the goal is to become electricity self‐sufficient. It is important to consider the local utilization of photovoltaic‐generated electricity and its effect on the net trading pattern (to and from the centralized system) when discussing the impact on the electricity system of a high percentage of prosumers