Dynamic Net Metering for Energy Communities

Ahmed S. Alahmed and Lang Tong

Papers from arXiv.org

Abstract: We propose a social welfare maximizing market mechanism for an energy community that aggregates individual and community-shared energy resources under a general net energy metering (NEM) policy. Referred to as Dynamic NEM (D-NEM), the proposed mechanism dynamically sets the community NEM prices based on aggregated community resources, including flexible consumption, storage, and renewable generation. D-NEM guarantees a higher benefit to each community member than possible outside the community, and no sub-communities would be better off departing from its parent community. D-NEM aligns each member's incentive with that of the community such that each member maximizing individual surplus under D-NEM results in maximum community social welfare. Empirical studies compare the proposed mechanism with existing benchmarks, demonstrating its welfare benefits, operational characteristics, and responsiveness to NEM rates.

Date: 2023-06, Revised 2024-01
New Economics Papers: this item is included in nep-ene and nep-reg
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Published in IEEE Transactions on Energy Markets, Policy and Regulation, 2024

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