The promotion of community energy projects in Chile and Scotland: An economic approach using biform games

Abstract

We model simple and novel three-player bi-form coalitional games to analyse community energy projects inChile and Scotland. We take into account two methods based on biform games, which deal with games with anon-empty Core and an empty Core, respectively, and constructmodels based on real-world data on communityenergy projects, net billing (or distributed generation) schemes, and ordinary utility contracts.Wethen use theseto derive insights about the economic-strategic viability of community energy projects, in the sense of stabilitywithin the projects or coalitions and competitiveness versus the other schemes. Under some mild assumptions,we find that community energy projects can be the best strategy to followfor residential electricity customers inScotland and Chile. Cost subsidisation can further improve community energy incentives. Moreover, after a statisticalsimulation, we find that community energy projects present more opportunities to be implemented incomparison with net billing schemes in both countries.We use these results to drawconclusions for the communityenergy sector and showthat biformgames can be a valuable tool to analyse increasingly complex electricity markets.