Decentralized energy systems optimization and European wholesale electricity prices : insights from Spain and Norway

Abstract

The increasing integration of variable renewable energy sources, in particular photovoltaics (PV) and wind power, and the associated increase in congestion pose a challenge for the stable operation of the transmission grid unless it is comprehensively renewed and expanded. Another side effect of the energy transition is the frequent occurrence of fluctuations in electricity prices. Local energy communities (LECs) can provide a remedy for these problems by providing flexibility for the electricity grid. The aim of this thesis is to analyze the influence of LECs on electricity prices. An optimization model is developed to simulate the operation of an energy technology portfolio within LECs, with the objective of minimizing annual costs, for different types of LECs in 11 regions each in Norway and Spain. Local storage technologies and the associated load shifting lead to changes in the demand profiles for electricity. These modified load profiles are scaled up to the country level for the different regions, considering a scenario from the Open ENTRANCE project. The optimal operation of the European energy system is then simulated within the EMPS-W and openTEPES models, resulting in electricity prices, that take into account the large-scale introduction of LECs. The results indicate that the demand profile modifications account for a small proportion of total consumption in the respective regions. The average price level for the base case (without LECs) in 2030 is higher than that for 2024 in the two countries investigated. At the same time, high fluctuations can be seen in the electricity prices for 2024, while the prices in 2030 remain relatively constant throughout the year. This work shows that the flexibility expected from LECs accounts for a small proportion of the total electricity consumption, but can still have a positive impact on grid operation by responding correctly to price signals. The applied methods of time series analysis make it possible to visualize the electricity prices of different years and to compare them with each other with regard to various aspects. Further investigations may focus with more detail on certain technologies within the model as well as a higher proportion of the potential for LECs. The model can also be applied to different regions, allowing a more comprehensive analysis of electricity prices in individual countries.

The increasing integration of variable renewable energy sources, in particular photovoltaics (PV) and wind power, and the associated increase in congestion pose a challenge for the stable operation of the transmission grid unless it is comprehensively renewed and expanded. Another side effect of the energy transition is the frequent occurrence of fluctuations in electricity prices. Local energy communities (LECs) can provide a remedy for these problems by providing flexibility for the electricity grid. The aim of this thesis is to analyze the influence of LECs on electricity prices. An optimization model is developed to simulate the operation of an energy technology portfolio within LECs, with the objective of minimizing annual costs, for different types of LECs in 11 regions each in Norway and Spain. Local storage technologies and the associated load shifting lead to changes in the demand profiles for electricity. These modified load profiles are scaled up to the country level for the different regions, considering a scenario from the Open ENTRANCE project. The optimal operation of the European energy system is then simulated within the EMPS-W and openTEPES models, resulting in electricity prices, that take into account the large-scale introduction of LECs. The results indicate that the demand profile modifications account for a small proportion of total consumption in the respective regions. The average price level for the base case (without LECs) in 2030 is higher than that for 2024 in the two countries investigated. At the same time, high fluctuations can be seen in the electricity prices for 2024, while the prices in 2030 remain relatively constant throughout the year. This work shows that the flexibility expected from LECs accounts for a small proportion of the total electricity consumption, but can still have a positive impact on grid operation by responding correctly to price signals. The applied methods of time series analysis make it possible to visualize the electricity prices of different years and to compare them with each other with regard to various aspects. Further investigations may focus with more detail on certain technologies within the model as well as a higher proportion of the potential for LECs. The model can also be applied to different regions, allowing a more comprehensive analysis of electricity prices in individual countries.