The energy community and the grid

Abstract

Energy communities involve various agents who decide to invest in renewable production units. This paper examines how these communities interact with the energy system and can decrease its overall cost. First, we show that an energy community can contribute positively to welfare if the electricity produced by the investment is consumed close to its place of production, i.e if the community has a high degree of collective self-consumption. Second, our analysis identifies the condition on prices and grid tariffs to align the community’s interest with welfare maximization. We also show that some of these grid tariffs do not have a negative impact on non-members of the community and could therefore limit potential distributional issues. Third, various internal organizations of the energy communities are feasible. We show that the internal organization impacts the distribution of benefits among members but not the investment and the global efficiency of the community.