Design and evaluation of a local energy market - A case study of Chalmers university campus

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Insinööritieteiden korkeakoulu | Master's thesis
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Date

2021-12-13

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Mcode

Degree programme

Nordic Master Programme in Innovative and Sustainable Energy Engineering (ISEE)

Language

en

Pages

121 + 34

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Abstract

The need to decarbonize the energy system, in addition to the falling costs of renewable energy sources, electric vehicles, and other technological advances, has presented opportunities to resolve the limitations and costs of the current electrical grid that have become apparent. Amongst other concerns, renewable technologies have resulted in imbalances in the network and constraints due to the lack of clear strategies and planning. Researchers are thus exploring the fundamental re-engineering of the electricity services industry in a way that will systemically change the way that electricity is generated and traded. The proper management of distributed energy resources (DER) could bring various benefits, through its application in a local energy market (LEM). The study aims to design and model a local energy market within Chalmers University of Technology based on the theory of energy markets in the available literature. The local energy market was designed to trade multiple energy carriers to locate and unlock potential synergies, with the main focus on electricity and heat trading. The purpose of this study is to identify the challenges and opportunities of local energy markets and assess their economic feasibility from the perspective of the market participants. The LEM was designed and modeled in Python and simulations were conducted for different scenarios to analyze their effects on participant behavior and subsequent market clearing. In an attempt to decarbonize the energy system, a popular trend is to electrify everything, as long as electricity is generated in a low-carbon manner. This results in a substantial elevation of electric demand on the electrical grid. The execution of a LEM within Chalmers University of Technology was found to ease the strain on the external grid and district heat network (DHN) during periods of peak demand, by acting as additional generators. Also, in response to the local market's partial self-sufficiency, energy costs were reduced and better controlled within the LEM. In the base case, there were no benefits seen in regards to reduced electricity prices, as internal generation did not satisfy demand. Regarding heat, however, costs were reduced up to an average of 52% in the winter and 100% in the summer. The first sensitivity case scenario analyzed the benefits of increasing the capacities of the solar PV and CHP units. No electricity price reductions were seen in the winter, however, costs did drop up to an average of 13% in the summer. For heat, costs dropped up to an average of 53% and 100%, for winter and summer, respectively. The second sensitivity case analyzed the impact of electricity price fluctuations on the LEM, and the system proved to be reliable and provide cost stability. Nevertheless, under all scenarios investigated, the simulated market was found to be consistently dependent on the external electricity grid to meet the needs of the consumers. The pricing relationship with surrounding markets was deemed to be a major concern if the market model were to be applied in practice and is briefly discussed.

Description

Supervisor

Syri, Sanna

Thesis advisor

Steen, David

Keywords

local energy market, market clearing, bid-dependency, day-ahead market, distributed energy resources, energy storage

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https://urn.fi/URN:NBN:fi:aalto-2021121910885

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[dipl] Insinööritieteiden korkeakoulu / ENG