On the Importance of Grid Tariff Designs in Local Energy Markets

Sebastian Schreck (), Robin Sudhoff, Sebastian Thiem and Stefan Niessen
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Sebastian Schreck: Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany
Robin Sudhoff: Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany
Sebastian Thiem: Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany
Stefan Niessen: Siemens AG, Technology, Günther-Scharowsky-Str. 1, 91058 Erlangen, Germany

Energies, 2022, vol. 15, issue 17, 1-25

Abstract: Local Energy Markets (LEMs) were recently proposed as a measure to coordinate an increasing amount of distributed energy resources on a distribution grid level. A variety of market models for LEMs are currently being discussed; however, a consistent analysis of various proposed grid tariff designs is missing. We address this gap by formulating a linear optimization-based market matching algorithm capable of modeling a variation of grid tariff designs. A comprehensive simulative study is performed for yearly simulations of a rural, semiurban, and urban grids in Germany, focusing on electric vehicles, heat pumps, battery storage, and photovoltaics in residential and commercial buildings. We compare energy-based grid tariffs with constant, topology-dependent and time-variable cost components and power-based tariffs to a benchmark case. The results show that grid tariffs with power fees show a significantly higher potential for the reduction of peak demand and feed-in (30–64%) than energy fee-based tariffs (8–49%). Additionally, we show that energy-based grid tariffs do not value the flexibility of assets such as electric vehicles compared to inflexible loads. A postprocessing of market results valuing the reduction of power peaks is proposed, enabling a compensation for the usage of asset flexibility.

Keywords: local energy market; distribution grid; flexibility; electric vehicles; market design; linear optimization (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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