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Article

On Distributional Effects in Local Electricity Market Designs—Evidence from a German Case Study

1
Copenhagen School of Energy Infrastructure (CSEI), Copenhagen Business School (CBS), Porcelænshaven 16 A, 2000 Frederiksberg, Denmark
2
Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin, Sekr. H 33, Straße des 17. Juni 135, 10623 Berlin, Germany
3
Center for Electric Power and Energy (CEE), Technical University of Denmark (DTU), Frederiksborgvej 399, 4000 Roskilde, Denmark
*
Author to whom correspondence should be addressed.
Energies 2020, 13(8), 1993; https://doi.org/10.3390/en13081993
Received: 28 February 2020 / Revised: 23 March 2020 / Accepted: 10 April 2020 / Published: 17 April 2020
(This article belongs to the Special Issue Design Optimization of Local Energy Markets)
The European Commission’s call for energy communities has motivated academia to focus research on design and trading concepts of local electricity markets. The literature provides a wide range of conceptual ideas and analyses on the technical and economic framework of single market features such as peer-to-peer trading. The feasible, system-wide integration of energy communities into existing market structures requires, however, a set of legal adjustments to national regulation. In this paper, we test the implications of recently proposed market designs under the current rules in the context of the German market. The analysis is facilitated by a simplistic equilibrium model representing heterogeneous market participants in an energy community with their respective objectives. We find that, on the one hand, these proposed designs are financially unattractive to prosumers and consumers under the current regulatory framework. On the other hand, they even cause distributional effects within the community when local trade and self-consumption are exempt from taxes. To this end, we introduce a novel market design—Tech4all—that counterbalances these effects. With only few legal amendments, it allows for ownership and participation of renewable technologies for all community members independent of their property structure and affluence. Our presented analysis shows that this design has the potential to mitigate both distributional effects and the avoidance of system service charges, while simultaneously increasing end-user participation. View Full-Text
Keywords: mixed complementarity problem (MCP); energy communities; distributional effects; electricity market design; peer-to-peer trading; local energy sharing mixed complementarity problem (MCP); energy communities; distributional effects; electricity market design; peer-to-peer trading; local energy sharing
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MDPI and ACS Style

Lüth, A.; Weibezahn, J.; Zepter, J.M. On Distributional Effects in Local Electricity Market Designs—Evidence from a German Case Study. Energies 2020, 13, 1993. https://doi.org/10.3390/en13081993

AMA Style

Lüth A, Weibezahn J, Zepter JM. On Distributional Effects in Local Electricity Market Designs—Evidence from a German Case Study. Energies. 2020; 13(8):1993. https://doi.org/10.3390/en13081993

Chicago/Turabian Style

Lüth, Alexandra, Jens Weibezahn, and Jan M. Zepter 2020. "On Distributional Effects in Local Electricity Market Designs—Evidence from a German Case Study" Energies 13, no. 8: 1993. https://doi.org/10.3390/en13081993

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