A bi-level formulation to help aggregators size Energy Communities: A proposal for virtual and physical Closed Distribution Systems

The challenges driven by the Energy Transitions cannot be met without involving citizens and private companies in energy matter. For this reason, the European Commission has promoted the concept of Renewable (REC) and Citizen (CEC) Energy Communities. Typical Energy Communities commercially aggregate multiple users, each one having its own Point-of-Delivery (PoD) with respect to the public grid and are aimed at promoting socio-economic and environmental benefits for the community. Yet, the policy framework can also allow selected users to be aggregated behind a single PoD, be it physically, when only a single external PoD is installed for all users thus creating a Closed Distribution System (CDS), or economically. In this study, we propose a business model and a sizing methodology to help aggregators size a CEC, where users are aggregated behind a single PoD. The problem is formulated as a non-linear bi-level optimization method and compared to the equivalent problem with no EC. A numerical case study is proposed and discussed for an Italian EC and supports the benefits.