Smart Municipal Energy Grid within Electricity Market

Abstract

A smart municipal energy grid including electricity and heat production infrastructure and electricity demand response has been modeled in HOMER case study with the aim of decreasing total yearly community energy costs. The optimal configurations of used technologies (photovoltaic plants, combined heat and power plants, wind power plants) and sizing, with minimal costs, are presented and compared using three scenarios of average electricity market price 3.5 c€/kWh, 5 c€/kWh and 10 c€/kWh. Smart municipal energy grids will have an important role in future electricity markets, due to their flexibility to utilize excess electricity production from CHP and variable renewable energy sources through heat storage. This flexibility enables the levelized costs of energy within smart municipal energy grids to decrease below electricity market prices even in case of fuel price disturbances. With initial costs in the range 0- 3,931,882 €, it has been shown that economical and environmental benefits of smart municipal energy grids are: the internal rate of return in the range 6.87-15.3%, and CO2 emissions in the range from -4,885,203 to 5,165,780 kg/year. The resulting realistic number of hours of operation of combined heat and power plants obtained by simulations is in the range 2,410- 7,849 hours/year.