Renewable Energy Communities business models under the 2020 Italian regulation

Abstract Recently in Italy several regulation actions have been setup defining the Renewable Energy Communities implementation. Beyond the regulatory aspects of the legislation, the definition of economic incentives has open the possibility for the evaluation of the business models of the Renewable Energy Community initiative. The present work is focused on a methodology aimed at the sizing of the active part of an energy community: a solar photovoltaic system with electrochemical energy storage. It develops a multicriteria optimisation procedure by evaluating two independent and normalised key performance indices: self consumption and self sufficiency of the energy community. These two KPIs are evaluated on a hourly based energy balance by minimising the power flow to/from the electrical grid through a Mixed Integer Linear Programming scheme. Results obtained by changing the PV and the energy storage sizes are mapped in a Pareto plane and their distance from “utopia point” are evaluated. Economic indicators are then used to pick up the most performing configuration. Three different options of business model are considered on the optimal point: one where the Renewable Energy Community is taking on itself all the capital expenditure for photovoltaic and battery, a second one where an independent company is acting as a “technological partner” acquiring and managing the assets, sharing with the community the revenues and one intermediate case where costs and revenues are shared between community and developer. The procedure is applied to a real test case of an energy community located in the north-western region of Italy. Results show both positive economic and environmental performances, where the internal rate of return is greater than 11% and CO2 emission reduction is close to 45% for all the configurations, making attractive the exploitation of REC in the Italian context.