Decentralized Renewable Energy Integration in the Urban Energy Markets: A System Dynamics Approach

Abstract

Abstract The ongoing transition in energy systems, driven by factors such as renewable energy adoption, data quality improvement, and grid decentralization, holds promise for addressing climate change and advancing environmental justice. This shift towards decentralized energy production, including prosumer engagement and microgrids, aims to reduce transmission losses and enhance grid resilience. Utilities are also adapting, transitioning to renewable sources, and integrating with existing grids. However, the policy and urban planning aspects of this transition have received limited attention. This research employs system dynamics modeling to explore various scenarios, from traditional utility-centered approaches to urban planning-driven customer choices, in achieving a climate-neutral energy system within 50 years. The study underscores the importance of comprehensive energy policies, socio-economic benefits, carbon reduction, and customer engagement. With highlighting potential solutions, it suggests avenues for future research to support the transition towards cleaner, more sustainable electricity solutions in regions like northern Illinois (USA).