Impact of domestic PV systems in the day-ahead Iberian electricity market

The integration of residential photovoltaic (PV) systems for self-consumption is expected to unlock a variety of economic, technical and social benefits, such as the creation of local work and the reduction of the price of electricity, CO2 emissions and electrical power losses in the transmission network. In spite of all these advantages, regulatory barriers prevented the development of renewable self-consumption in Spain prior to October 2018, when a new regulation introduced the right to self-consume electrical energy without charges. This work aims to estimate the effect of residential self-consumption on the Iberian electricity market. To achieve this goal, a ceteris paribus approach was adopted, the accumulated scattered PV self-production was turned into a reduction of the aggregate demand in the market and the new clearing point was established. Based on 2017 market data, the results showed that a 1% curtailment of the annual demand due to PV self-consumption could reduce the cost of the market-traded energy by almost 2%.

Automated summary

The integration of residential photovoltaic systems for self-consumption is expected to bring various economic, technical, and social benefits, including local job creation and reduction in electricity prices and CO2 emissions. Regulatory barriers in Spain prevented the development of renewable self-consumption until October 2018 when a new regulation allowed self-consumption of electricity without charges. A study showed that residential self-consumption in the Iberian electricity market could potentially reduce the cost of market-traded energy by almost 2%.