Economic Viability of Renewable Energy Communities under the Framework of the Renewable Energy Directive Transposed to Austrian Law

Abstract

This study is concerned with the national transposition of the European Renewable Energy Directive into Austrian law. The objective is to estimate the economic viability for residential customers when participating in a renewable energy community (REC), focused on PV electricity sharing. The developed simulation model considers the omission of certain electricity levies as well as the obligatory proximity constraint being linked to grid levels, thus introducing a stepwise reduction of per-unit grid charges as an incentive to keep the inner-community electricity transfer as local as possible. Results show that cost savings in residential RECs cover a broad range from 9 EUR/yr to 172 EUR/yr. The lowest savings are gained by customers without in-house PV systems, while owners of a private PV system make the most profits due to the possibility of selling as well as buying electricity within the borders of the REC. Generally, cost savings increase when the source is closer to the sink, as well as when more renewable electricity is available for inner-community electricity transfer. The presence of a commercial customer impacts savings for households insignificantly, but increases local self-consumption approximately by 10%. Despite the margin for residential participants to break even being narrow, energy community operators will have to raise a certain participation fee. Such participation fee would need to be as low as 2.5 EUR/month for customers without in-house PV systems in a purely residential REC, while other customers could still achieve a break-even when paying 5 EUR/month to 6.7 EUR/month in addition. Those results should alert policy makers to find additional support mechanisms to enhance customers’ motivations to participate if RECs are meant as a concept that should be adopted on a large scale.