Assessing the impact of energy communities on retailers’ balancing positions in the power market

Raquel Alonso Pedrero and Pedro Crespo del Granado

Energy, 2023, vol. 283, issue C

Abstract: As regulatory constraints limit energy communities’ (ECs) participation in wholesale markets, these might rely on retailers’ supply when local generation falls short. As balancing responsible parties, retailers are financially responsible for matching the volumes traded in the market with customers’ actual needs. However, inadequate information about ECs’ operations may complicate this task. This paper explores the interactions and financial implications for retailers under contractual agreements with ECs. We design a novel modelling framework, consisting of: (1) a stochastic model of a strategic retailer participating in the day ahead market considering imbalance costs, (2) a community model optimising its operations based on the agreed tariff subscription with the retailer, and (3) a simulation of the imbalance settlement process. The frameworks’ applicability is demonstrated via a case study in London (UK). Results indicate that retailers’ primary source of profit loss arises from the increased self-sufficiency of customers belonging to EC. On the other hand, deviations from the market commitments exerts limited effects on retailers financial outcomes. This is explained by the earnings obtained by providing passive balancing services to system operators. Also, the paper underscores retailers’ need to reassess their business models, looking beyond merely establishing operational data exchange with ECs.

Keywords: Energy communities; Retailers; Power markets; Balancing responsible parties; Single imbalance pricing (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544223017784
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:283:y:2023:i:c:s0360544223017784

DOI: 10.1016/j.energy.2023.128384

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().