Assessing the techno-economic benefits of LEMs for different grid topologies and prosumer shares

TL;DR

This paper evaluates how local energy markets can improve economic efficiency and reduce peak power in various grid topologies with high renewable energy shares, using extensive agent-based simulations.

Contribution

It introduces a comprehensive simulation approach to assess the techno-economic benefits of local energy markets across diverse grid types and resource penetration levels.

Findings

Most scenarios show lower average energy prices with local markets.

Operational peak power is significantly reduced in 80% of cases.

Local markets are especially beneficial with high PV and heat pump shares.

Abstract

The shift towards decentralized and renewable energy sources has introduced significant challenges to traditional power systems, necessitating innovative market designs. Local energy markets present a viable solution for integrating distributed energy resources such as photovoltaic systems, electric vehicles, and heat pumps within various grid topologies. This study investigates the techno-economic benefits of local energy markets compared to conventional market designs, focusing on their impact on average energy prices and operational peak power, using a self-developed agent-based energy system simulation tool. Through comprehensive simulations across the countryside, rural, suburban, and urban grid topologies with varying penetration levels of the distributed energy resources, totaling 400 simulation setups, we demonstrate that local energy markets can enhance economic efficiency and grid stability with 99 % of the scenarios boasting lower average energy prices and 80 % lower operational peak power levels. Our findings suggest that local energy markets can play a role in the future energy system, especially in areas with high shares of PV and HP, provided that additional infrastructure, management costs, and bureaucratic complexity are kept to a minimum.