System Dynamics Model of Decentralized Household Electricity Storage Implementation. Case Study of Latvia

Abstract

Increasing of renewable energy share in total energy production is a direction that leads towards European Union’s aims of carbon neutrality by 2050, as well as increases energy self-sufficiency and independence. Some of the main challenges to increase renewable energy share while providing efficient and secure energy supply are related to optimization and profitability of de-centralized energy production systems. Integration of energy storage systems in addition to decentralized renewable energy production, for example, by solar panels, leads to more effective electricity supply and smart energy solutions. The modelling of such complex dynamic system can be performed using system dynamics method. The aim of the article is to forecast the practice of electricity storage in Latvia in the coming decades. A system dynamics model predicting the implementation of battery storage in private households was created for the case study of Latvia. Modelling results reveal that under the right conditions for electricity price, investment costs and with the right policy interventions battery storage technologies combined with PV panels have high potential for utilization in household sector. Model results show that in baseline scenario with no additional policies up 21 422 households or 10.8 % of Latvian households could have combined PV and battery system installed in 2050. Moderate subsidy policy can help to increase this number up to 25 118.