Exploring scale effects of energy communities under the Swiss policy framework

Integrating locally generated renewable energy into decentralised energy systems is critical for achieving decarbonisation targets. Energy Communities (ECs) offer a promising approach for utilising locally generated energy, reducing infrastructure requirements, and leveraging economies of scale. However, the optimal scale of energy communities has not yet been studied in sufficient detail. To address this research gap, our study explores the optimal EC scale by developing a multi-building-level mixed-integer linear program to evaluate EC’s economic performance across urban and rural residential settings, considering the Swiss policy framework. In addition, we evaluate the feasibility of heat-pump-based district heating networks at various EC scales. Our findings show that under our case-study assumptions, the EC scale has a limited impact on economic performance, whereas grid charges and electricity prices have stronger influences. When compared to not forming an EC, savings remain marginal (only 0.8%) without a grid-charge discount for peer-to-peer energy exchange. Further, we demonstrate that district heating – supplied by large-scale heat pumps – exhibits substantial economies of scale and is economically attractive in dense urban areas with up to 15% savings. Our findings imply that decision-makers should: (i) strengthen incentives for local electricity exchange by reducing grid charges beyond current levels; (ii) design dynamic retail electricity tariffs to facilitate increased solar PV self-consumption and battery electric storage adoption; and (iii) incentivise sector coupling with district heating in dense urban ECs. Future research should explore electricity network-related constraints to analyse the optimal EC scale from the network operator’s perspective and the distributional effects of EC scale on individual households for a fair distribution of EC economic benefits.