Allocation of locally generated electricity in renewable energy communities

Local electricity markets represent a way of supplementing traditional retailing contracts for end consumers—among these markets, the renewable energy community has gained momentum over the last few years. This paper proposes a practical and readily to be adopted modelling solution for these communities, one that allows their members to share the economic benefits derived from them. The proposed solution relies on an ex-post allocation of the electricity that is generated within energy communities (i.e., local electricity) based on the optimisation of repartition keys. Repartition keys are therefore optimally computed to represent the proportion of total local electricity to be allocated to each community member, and aim to minimise the sum of electricity bills of all community members. Since the optimisation takes place ex-post the repartition keys do not modify the actual electricity flows, but rather the financial flows of the community members. Then, the billing process of the community will take these keys into account to correctly send the electricity bills to each member. Building on this concept, we also introduce two additions to the basic algorithm to enhance the stability of the community, which a global bill minimisation may fail to ensure (e.g., very asymmetrical solutions between members may lead to some of them opting out). The first addition is the computation of the self-sufficiency rates of the community members, defined as the proportion of the electricity demand covered by local electricity—this can be used to ensure a more even allocation of the local electricity among the community members, effectively acting as a revenue sharing system. The second addition is the use of initial repartition keys based on which the optimised ones are computed, and a tolerance on the maximum deviations between both sets of keys—this can help decrease the uncertainty of potential community members prior to their participation, as it ensures a minimum— ontractual—level of revenue for each of them. We have tested our initial methodology with a broad range of scenarios illustrating its ability reduce the electricity bills of the community members. Likewise, the two additions are tested showcasing the impact of revenue sharing by means of self-sufficiency rates and initial keys. Our results show that creating a community using this methodology can potentially reduce the electricity costs for all community members, and that self-sufficiency rates and initial keys can be used to stabilise the community by performing revenue sharing among them.