According to the challenging “Fit for 55” objectives, the European Union has recently started a reforming wave of the current energy market frameworks to involve larger segments of customers to keep demand and production in balance and to solve potential grid criticalities.

After opening the market participation to energy aggregators in recent years, the figure of Energy Community (EC) has been recognized at European level as an organization of citizen-driven energy actions aiming at exploiting locally the energy production coming from a collectively owned plant or sharing the benefits of multiple Distributed Energy Resources (DERs) within a consortium. The benefits of ECs may be manifold. Customers can reduce the dependency from the public grid and external energy providers by exploiting the local energy production. The power system operators could count on reduced power flows in the grid, hence on lower losses and, ultimately, costs. A larger share of responsive users can provide the much-needed flexibility resources for grid management to face the renewable-based power generation intermittence. The importance of creating a market framework for trading flexibility products locally for the management of distribution grids is witnessed by the number of recent and ongoing projects for enabling flexibility market platforms. In Italy the process has started with a resolution by ARERA, the energy regulator, to allow Distribution System Operators (DSOs) to design pilot projects for purchasing flexibility services from the users.

The ECs, therefore, while pursuing optimal local management for rationalising the local production and use of electricity, may also coordinate the available flexible resources (e.g., storage units or electric vehicles charging) for providing services to the DSO.

This project’s goal is to investigate the role of Energy Communities from the electricity production and usage point of view, both from the perspective of the participants (including their private decision in participating in the new market) and from the system operator’s one. By designing a suitable multi-period optimization algorithm, the project will provide a useful instrument for the management of flexibility providers such as storage units and electric vehicle charging stations in the bigger scheme of demand-response, which requires a reliable communication infrastructure for coordinating the users. Different EC layouts will be studied, depending on the local infrastructure, such as buildings hosting multiple dwellings or blocks of different residential or commercial buildings, sharing the resources either on a locally owned (either AC or DC) distribution network portion or through the public one. From the system operator standpoint, the project will study the impact of such different layouts in different proposals for local flexibility market schemes.

The project aims at developing an instrument suitable for the evaluation of potential benefits associated with the creation of energy communities in a distribution power system, evaluating the expected costs for the distribution of energy and network management, together with the benefit of hosting more renewable energy sources to facilitate the energy transition.

Furthermore, the project will contribute to the economic literature on EC and new local electricity markets, by providing evaluation and forecasting models for market equilibria declined in some different typical power system structures.  The evaluation will also help in detecting which differences (if any) are present in terms of agents’ valuation in different system frameworks.