A policy-based multi-objective optimisation framework for residential distributed energy system design

Distributed energy systems (DES) are increasingly being introduced as solutions to alleviate conventional energy system challenges related to energy security, climate change and increasing demands. From a technological and economic perspective, distributed energy resources are already becoming viable. The question still remains as to how these technologies and practices can be “best” selected, sized and integrated within consumer areas. To aid decision-makers and enable widespread DES adoption, a strategic superstructure design framework is therefore still required that ensures balancing of multiple stakeholder interests and fits in with liberalised energy system objectives of competition, security of supply and sustainability. Such a design framework is presented in this work. An optimisation-based approach for the design of neighbourhood-based DES is developed that enables meeting their yearly electricity, heating and cooling needs by appropriately selecting, sizing and locating technologies and energy interactions. A pool of poly-generation and storage technologies is hereto considered combined with local energy sharing between participating prosumers through thermal pipeline design and microgrid operation, and, a bi-directional connection with the central distribution grid. A superstructure mixed-integer linear programming approach (MILP) is proposed to trade off three minimisation objectives in the design process: total annualised cost, annual CO2 emissions and electrical system unavailability, aligned with the three central energy system objectives. The developed model is applied on a small South Australian neighbourhood. The approach enables identifying “knee-point” neighbourhood energy system designs through Pareto trade-offs between objectives and serves to inform decision-makers about the impact of policy objectives on DES development strategies.