A Stochastic Model for Optimal Investment in Renewable Energy Communities

The attention on Renewable Energy Communities (REC) is fastly growing after the European Union (EU) has introduced a dedicated regulation in 2018. RECs can be composed by citizens, smalland medium-sized companies, and local administrations with the purpose of self-production and self-consumption of energy from renewable sources. This thesis presents a stochastic model for optimizing investment in Renewable Energy Communities (RECs), taking as a starting point the paper [1]. The model focuses on a particular type of REC composed of a ”representative” household and a biogas producer, where the potential demand of the community is given by the household’s demand, while both members produce renewable energy. The biogas producer invests in technology to convert biogas into electricity and sell it in the electricity market at the spot price, whereas the biogas that is not transformed into energy can be sold on the market at the gas spot price. The household invests in photovoltaic panels to reduce the energy purchased from the market in order to cover its own power demand. Moreover, investing in a renewable energy plant provides the household with the revenues of selling the excess of energy not used for self-consumption. The relevant advantage of entering into a REC for both players is that their joint self-consumption is rewarded with a governmental incentive, which must be fairly shared. The challenge of optimal investment with fair share of incentives is addressed by setting the problem as a leader-follower game, where the leader decides how to share the incentive. The model provides insights into how RECs can effectively balance investment in renewable energy technologies with fair distribution of incentives, promoting sustainable energy production and consumption. Bibliography [1] A. Awerkin, P. Falbo, C. Pelizzari, and T. Vargiolu. Optimal Investment and Fair Sharing Rules of the Incentives for Renewable Energy Communities.