Energy communities' impact on grids : Energy community embedment increasing grid flexibility and flourishing electricity markets

Abstract

Energy communities have an agenda beyond simply generating electricity or heat from renewable sources. It encompasses environmental, technological and economic aspects of a low-carbon economy by addressing social equity issues. The deployment of energy communities supports the paradigm that society's growth must also occur locally by promoting investment in distributed energy resources and democratising the energy industry. Climate change and the current energy crisis, along with a hike in electricity prices, have aroused community interest in using local renewable energy sources and creating energy communities. European Union policymakers have adopted legislation to support energy communities in taking responsibility for the energy transition. Still, the challenges and opportunities of deploying such communities are numerous and manifold, from legislation, organisation, socio-economic, market structure, and system-technical to citizen engagement. Therefore, we must ensure that the fair transition to a low-carbon economy happens in a way that avoids displacing energy communities. Despite the rapid development of technologies that energy communities are experiencing today, technical issues still exist in various forms, mainly known as grid-related challenges. The distributed energy resources that they promote change the electricity landscape. Since the beginning of this century, even if the electricity sector has experienced profound changes driven by extraordinary technical development (e.g., digitalisation and communications), market rules following new regulatory proposals and policy decisions have overwhelmed the technical ones. For this reason, the traditional structure of power grids needs to be readapted. The emergence of distributed energy resources and the introduction of energy communities to promote integration exacerbate the need to adapt the power grid architecture. Consolidating an appropriate architecture considering the entire power grid - i.e., from the big power plants through the transmission grid, the distribution grid with the distributed energy resources to the consumers and prosumers - is imperative to propel the energy transition realistically. Distribution and Transmission System Operators could experience many technical challenges in guaranteeing the security and quality of supply after the large-scale implementation of energy communities, which extensively promotes the integration of distributed resources. To overcome this, research and innovation are necessary to introduce fully integrated energy communities, enabling the desired flexibility and resilience. The latter are crucial for grid operators and society facing the energy crisis and climate change. The current economic processing in the power industry is a mixture of market activities and contracts that do not support the flourishing of viable, fully integrated energy communities. The existing market structure dates back to when electricity was mainly generated in large power plants, fed into the transmission grid, and distributed to customers. The players in the electricity market are limited to large electricity producers, consumers, and energy suppliers, which are few. Fully integrated energy communities will be able to thrive in a market structure that allows all players to participate, regardless of their size. Three overarching themes are essential for initiating and sustaining an energy community initiative: trust, motivation, and continuity, which impact their governance or self-governance. Each country offers a wide choice of different legal forms of organisations for a newly created entity, which leads to a wildly grown landscape. These energy communities are generally limited to a certain redistribution of cash flow. Their upgrade to fully integrated EnCs, which supports the demand response process at distribution and transmission levels, will require solid organisation forms and business cases. The top-down approach to introducing energy communities in the energy landscape would be driven by appropriate legislation and measures to overcome grid-related challenges. However, creating and strengthening citizens' awareness is essential for developing a low-carbon social norm. This will take time, which should be considered in all implementation processes. The new role of energy communities represents both an opportunity and a challenge for DSOs and, consequently, for TSOs. They can unlock active consumers' flexibility potential and more effectively integrate distributed renewable resources and new technologies, such as rooftop photovoltaic facilities, electric vehicles or batteries, etc. In contrast, energy communities must fulfil all related duties and responsibilities when acting as suppliers, active customers or any other existing market role. They must act on equal terms with other market players.