Impact of grid tariff design and prosumer flexibility investments on peak load reduction — Participation in multiple renewable energy communities

Abstract

The increasing electrification of energy systems, combined with inelastic and uncontrolled consumer demand, leads to an increasing peak–base load spread. A well-designed grid tariff would help to address this challenge by incentivizing investments in flexibility, thereby enabling demand response to smoothen the overall load profile. Renewable Energy Communitys (RECs) offer some flexibility potential. However, the current grid tariff design creates disincentives for grid-friendly behavior. The core objective of this work is to model the impact of different grid tariffs on investment in flexibility and peak load reduction within multiple REC participation. A Mixed Integer Linear Programming (MILP) model is developed, providing a unified framework that integrates grid tariff design, multiple REC participation, and investment in flexible technologies. The study compares five tariff designs with varying power-component cost functions (flat, linear, stepwise) under single- and multiple REC participation. Austria is chosen as a case study due to its pioneering role as the first European Union (EU) member state to implement multiple REC participation, thereby providing transferable empirical results for other EU member states. The results indicate that multiple participation and grid tariffs based on a power-component with a linear cost function result in increased flexibility reinvestment of up to 51%, compared to single participation in the same tariff design. Power-based tariffs can reduce maximum peak load by up to 65%, while peak frequency changes vary widely. To support grid-friendly behavior, we recommend that multiple participation should be paired with a power-based grid tariff, incentivizing higher flexibility reinvestment and peak load reductions.