1. Frankfurt (Germany), 6-9 June 2011 Gordon McKinstry – United Kingdom – RIF Session 5 – Paper 1092 Comparison of the cost of electricity in a highly distributed energy future cell for feed-in tariffs and free market community aggregated trading of microgeneration sourced electricity. Gordon McKinstry, Stuart Galloway, Bruce Stephen Department of Electronic & Electrical Engineering University of Strathclyde Glasgow, United Kingdom

2. Frankfurt (Germany), 6-9 June 2011 Overview  Introduction  Need for Research & Utilisation of DER  Market Participation of Microgenerators  Simulation Procedure  Results  Conclusion & Further Work

3. Frankfurt (Germany), 6-9 June 2011 Introduction  Drivers for change supporting the HiDEF vision “Many sources, many loads, many market participants”  Decentralised energy system – 2025 & 2050  Research focused on participation through market design Large scale market reform Remuneration schemes support individuals or communities

4. Frankfurt (Germany), 6-9 June 2011 Need for Research  Increasing microgeneration increases market participation  Could a community of microgenerators drive down prices? Reduced demand resulting in expensive plant remaining off  Would existing feed-in tariffs be a better option? How much should be paid under FiT?  Is another option required altogether? Future Work

5. Frankfurt (Germany), 6-9 June 2011 Market Participation of Microgenerators.  One body sells all community energy to market Reduce prices by stopping switch-in of peak plant. All energy must still be purchased from market.  Community takes Feed-In Tariff Energy consumed locally and deferral payments received. What level of FiT payment makes this attractive?

6. Frankfurt (Germany), 6-9 June 2011 Test Network  Representative of intermediate HiDEF Cell One virtual power plant / negative load to represent FiT takers Aggregator modelled as first dispatched generator Modelled using agent-based learning techniques

7. Frankfurt (Germany), 6-9 June 2011 Simulation Procedure – Selling To Market  Level of microgeneration sourced energy at bus 2 0 to 1 % peak demand in 0.1 % increments  Selling energy to market First dispatch generator of size described above Objective to limit expensive plant being switched-in  Simulation run for 50 days utilising agent learning

8. Frankfurt (Germany), 6-9 June 2011 Simulation Procedure – Feed-In Tariffs  Microgeneration now modelled as negative load 0 to 1 % peak demand in 0.1 % increments 0 to 200 % of MCP paid for FiT sourced energy.  Simulation run for 50 days with agent learning as before  Cost calculated on per-unit basis, as shown below

9. Frankfurt (Germany), 6-9 June 2011 Results  Payment free FiT can reduce overall price paid Why invest without promise of return?  Increasing provision of DER reduces price per unit  Community VPP & FiT prices will ultimately converge

10. Frankfurt (Germany), 6-9 June 2011 Results  Equilibrium points found  FiT pays %MCP = Community VPP price paid  FiT paying more than MCP is unviable  Increasing FiT qualifying participants makes aggregation more viable.

11. Frankfurt (Germany), 6-9 June 2011 Discussions  No capital costs considered, only operational.  Ownership Feasibility of enforcing mass participation?  Technological Aggregation requires significant storage media development

12. Frankfurt (Germany), 6-9 June 2011 Conclusion & Further Work  Community VPP schemes offer viable alternative to FiT  FiT schemes paying over 100 % MCP potentially very expensive  Research opportunities exist within Assessment of non per-unit schemes. The impacts of micro-scale storage on markets. The Impacts of macro-scale storage on markets.