Local Energy Markets in Energy Communities and Their Impact on Energy Poverty

Local energy markets and energy communities have emerged as novel solutions to efficiently coordinate demand for locally generated renewable energy. This study presents a hierarchical multi-stage optimisation framework for the day-ahead scheduling of demand and determination of energy transactions within an energy community. Special pricing when trading with peers in the community is extended to vulnerable households facing energy poverty. The research study emphasizes the importance of mitigating energy poverty and evaluates the effect of various local energy market approaches on the reduction of energy costs through simulation analysis. Application of the proposed methodology is demonstrated through a case study involving a UK-based community of 200 households. Substantial reductions in electricity costs exceeding 13% are achieved across all market structures explored in this paper, particularly when flexibility and optimisation are combined with community trading. Prosumers experience the greatest savings exceeding 32.2%, while energy-poor households gain over 11.1% on average benefiting from reduced tariffs at the community trading stage, however, this is accompanied with diminished gains on behalf of prosumers.