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Economic regulation of decentralised energy resources

Authors: Svianadze, Avtandil;

Economic regulation of decentralised energy resources

Abstract

Against a backdrop where the global transportation sector contributes significantly to greenhouse gas emissions, accounting for 21% of total global emissions in 2023, and approximately a quarter of the EU's total, and with Electric Vehicle (EV) adoption rapidly expanding, comprising 15% of European vehicle registrations by mid-2023, this study delves into the economic governance of decentralised energy resources. (EEA, n.d.) Specifically, it examines the intricate integration of EVs within diverse electricity tariff frameworks across France, Germany, and the Netherlands. Employing a simple computational modelling and optimisation methodology, this research quantifies the complex interplay among tariff design, EV owner expenditures, energy aggregator viability, and greenhouse gas emissions, showing crucial insights for advancing sustainable energy transitions in Europe and beyond. The investigation addresses three pivotal research questions. Firstly, regarding the impact of tariff mix (RQ1), the study reveals that the internal structure of flat tariffs influences aggregator profitability. It highlights that the absolute monetary value of the energy component, rather than merely its percentage share, is paramount for financial sustainability, a distinction particularly evident when contrasting Germany's profitable scenarios with the challenges faced by aggregators in France and the Netherlands. Secondly, concerning tariff type efficacy (RQ2), time-based pricing mechanisms, including Time-of-Use (TOU) and dynamic tariffs, consistently demonstrate a significant capacity to curtail use-phase CO₂ emissions. These tariffs achieve reductions ranging from 15% to 37% compared to static flat tariffs, underscoring their role as direct instruments for climate policy, irrespective of the underlying grid's carbon intensity. Lastly, in exploring optimisation benefits (RQ3), the implementation of a multi-objective Vehicle-to-Grid (V2G) optimisation strategy, which balances cost and emissions objectives, provides synergistic benefits. This advanced approach simultaneously facilitates substantial reductions in EV owner costs (30% to 35%) and CO₂ emissions (24% to 33%), while concurrently enabling positive profit margins for aggregators under dynamic pricing regimes. Notably, aggregator profitability is found to be more acutely sensitive to wholesale market price volatility than to battery degradation costs. Collectively, these insights underscore the imperative for transparent and adaptive tariff structures, complemented by effective regulatory frameworks that support energy aggregators. Such regulatory support should proactively address issues like potential double taxation on energy discharged back to the grid and ensure that tariff designs provide adequate absolute revenue streams from the energy component. Integrating intelligent charging capabilities into broader decarbonisation strategies is also highlighted as an essential step. This research thus offers actionable guidance for policymakers, utility providers, and EV owners, aiming to accelerate the seamless and sustainable integration of electric vehicles into modern smart grid architectures.

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Country
Spain
Related Organizations
Keywords

Xarxes elèctriques intel·ligents, Smart power grids, Àrees temàtiques de la UPC::Energies, Gasos d'efecte hivernacle -- Mitigació, Vehicles elèctrics -- Aspectes econòmics, Electric vehicles -- Economic aspects, Greenhouse gas mitigation

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
Green