Flexible Integration of Local Energy Communities into the Norwegian Electricity Distribution System

To mitigate global warming, energy demand by different sectors must migrated towards electricity and the share of renewable resources must be increased. This brings major investment needs and new challenges to the power system. Local energy systems can address some of the challenges like, keeping the demand and supply in balance all the time, maintaining good quality of supply, and social acceptance and participation in energy transformation. Local energy communities, in EU directives specified as Citizens Energy Communities and Renewable Energy Communities, are legal entities who provide environmental, economic or social benefits to the local community by participating in activities like power generation, distribution and consumption. From power system perspective, local energy community can provide better coordination of local resources, utilization of distribution network, easier accesses to flexibility in distribution network, investment cost and loss reduction in transmission network and increased innovation opportunities for grid customers. However, these benefits do not arrive automatically by regulation relaxation. It requires adequate regulations and incentives for the developments to happen in a rational way. Local energy communities can also bring negative impact to the power system and society at large, if regulations and incentives are not designed appropriately. The project has mapped potential local energy communities in a Norwegian context and categorised these in three main types: Rural energy communities, urban energy communities and industrial/commercial clusters. The project has also developed scenarios for how regulatory framework and economic incentives for local energy communities can develop in the coming years and is developing models to study how the energy communities are affected by the different scenarios. In the project we will: - Further develop models of energy communities and distribution networks. - Analyse the interaction between local energy communities and the distribution network in operation and planning, including the energy community as a flexibility provider - Analyse the consequences of different regulations and incentive structures and provide overall recommendations The project includes one PhD at UPC Barcelona and one at NTNU.

A local electricity community is based on a micro-grid and micro-market concept that includes a mix of prosumers and consumers that might form a community with its own marketplace in cooperation about local resources. Many energy communities are driven by building developers/owners, the projects are immature, few projects have performed cost/benefit analysis for the actors involved (TSO, DSO and the community itself) and nobody has focused on the socio-economic consequences of such neighbourhoods. These gaps will be addressed in this project. Further, the technical and regulatory framework in which the local energy communities is not defined yet. To assess the socio-economic results that the legal framework will be one of the tasks of this project. If local energy communities become a part of the future electrical system, they will have an impact on the topology and the operation of electrical networks, especially in the distribution grids. To this end, FINE will analyse, the effect that local energy communities may have on grid planning and operation and make use of digitalisation tools as a key enabler in order to integrate local energy communities optimally into the existing grid (maximize social welfare: reduce grid operations and investment costs). To achieve this goal the transition of a traditional DSO to an active DSO is analysed in detail. In order to analyse different possible future frameworks and technical restrictions, future scenarios are developed with the participation of all involved stakeholders (TSOs, DSOs and Communities) and defined in several workshops. The project is divided in four major topics: 1. scenario development based on a stakeholder participation 2. impact of local energy communities on the distribution system based on the scenarios 3. creation of platform for the interaction between DSO an local energy communities 4. simulation and near real time operation of local energy communities