How Network Tariffs Impact the Optimal Design of Local Energy Systems: A Swiss Case Study

Farhat, Yamshid; Lipsa, Gabriel M.; Braun, Torsten (30 January 2024). How Network Tariffs Impact the Optimal Design of Local Energy Systems: A Swiss Case Study. In: 2023 IEEE PES Innovative Smart Grid Technologies Europe (ISGT EUROPE). IEEE Xplore: IEEE 10.1109/ISGTEUROPE56780.2023.10408560

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The integration of distributed energy resources (DERs) and novel loads like electric vehicles (EVs) or heat pumps (HPs) into local energy systems (LESs), which can function in harmony with the grid, is imperative for achieving a successful transition towards sustainable energy. However, it is vital to consider price signals that encompass system costs as well as Energy Strategy objectives when determining the optimal design and operation of LESs. In this paper, we are aiming to evaluate the potential impact of grid tariffs on LESs’ optimal solutions. We introduce an initial stage of our research endeavor by formulating a linear optimization algorithm that minimizes LESs energy costs. We conducted a case study in a Swiss municipality, wherein 85 LESs were subjected to different grid tariff schemes (including volumetric, power peak-based, and seasonal). Our algorithm was employed in order to identify the optimal LESs designs and evaluate the impact at the municipality level. Based on our findings, it can be inferred that the chosen grid tariff scheme heavily influences factors such as DER & Energy Storage Systems (ESSs) size and type selection, operation procedures of LESs, profitability rates and allocation of costs related to the power grid. We discuss the implications of these findings for network operators, LES owners and policymakers, and provide some recommendations for designing grid tariffs that can promote efficient and fair integration of DERs in LESs to achieve the Swiss Energy Strategy goals and ensure the reliability and cost efficiency of the energy system.

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