Do dynamic retail energy tariffs threaten the economic viability of ECs operating under static EC-internal energy prices? — Initial insights

The vast majority – if not all – energy communities (ECs) use static EC-internal energy prices for the billing of energy flows within their virtual borders. At the same time, however, recent trends point strongly towards an increased dynamification of EC-external price components. Therefore, the objective of this work is to provide a generally-applicable framework to assess the economic impact of dynamic retail offers on ECs operating under static EC-internal energy prices. This includes determining (i) the number of time-steps per year in which static EC-internal energy prices are superior to (= better, cheaper than) a retailer’s offer (and vice versa), (ii) the height of actual price differences per 15-min time-step, (iii) the resulting total positive or negative price offset within a year – (iv) for ECs only based on solar generation and (v) for ECs having various generation sources at their disposal. The framework is applied to a representative Austrian case study, considering a range of different scenarios, encompassing the permutations of a variety of static EC-internal energy prices and dynamic retail energy prices. Benchmarked against a dynamic retail tariff (based on day-ahead market price data of 2023) of a comparably cheap Austrian retailer, a low static EC-internal energy price of 12c/kWh makes the EC’s price offer preferable at 65.9% of all time-steps; in contrast, assuming a comparably high static EC-internal energy price of 16c/kWh leads to the almost opposite situation with the retailer’s offer being preferable at 64.4% of all 15-min time-steps over a year. Results are aimed at supporting ECs in their strategic decisions with regard to determining the height of their static EC-internal energy price in an increasingly dynamified external price environment, and in evaluating their potential of economically viable operation in the medium-term. Also, guidance shall be provided for policy decision makers in their process of designing potentially necessary financial support mechanisms for ECs. • Economic impact of dynamic retail energy prices on ECs operating under static EC-internal energy prices. • Considering low-, medium-, and high- EC price scenarios paired with different retailers’ offers. • Results on quarter-hourly, monthly and annual time-granularity. • Economic competitiveness of ECs rises in case the generation portfolio is not limited to PV only. • Strong seasonal sensitivity of ECs’ economic competitiveness against dynamic retail offers.