Economic and Environmental Effects of Installing Distributed Energy Resources into a Household

Improving energy 
efficiency in the residential sector is a pressing issue in Japan. This study 
examines the economic and environmental impacts of introducing the following 
distributed energy resources: photovoltaics (PV), a fuel cell, and a battery. 
We estimate electricity and hot water demand profiles of a household by using 
simulated living activities. Electric power from a residential PV system is 
also calculated from the observed solar radiation. By using mixed integer 
programming, we perform a cost minimization operating simulation of a 
residential PV, fuel cell, and battery. The result suggests that we can create 
a net-zero energy house by installing both a PV system and a fuel cell into one house. On the other hand, using a battery with a 
fuel cell increases the household energy cost, and has few effects on CO2 emission reduction.


Introduction
The residential sector accounts for 14.3% (2051 PJ/year) of the total energy consumption in Japan [1], and 475. 9 Mt CO 2 is emitted by energy consumption in the residential sector [2]. The residential sector's energy consumption has doubled since 1973, and furthermore, unit CO 2 emissions have been increasing in recent years because Figure 1 shows the simulation process in this study. First, we estimate the household energy (electricity and hot water) demand by simulating the living activities of family members (2.1). We also estimate the residential PV system's electric power from observed meteorological data (2.2). Finally, we simulate the energy demand and supply of a household with various energy apparatus (fuel cell, battery, and PV) (2.3) and evaluate the effects on energy cost and CO 2 emission.

Energy Demand Estimation Based on Simulated Living Activities
Assuming that the simulated family members are an office worker, a homemaker, and two children, we simulate each member's daily activity schedules by using the Markov chain model. The concept of the model is presented in Figure 2. First, a member's activity at 0:00 is decided according to the member's ratio from a time use survey [12]. Table 1 shows activity classifications and examples. Next, according to the transition probabilities of  Other activities Activities other than those described above activity from 0:00 to 0:03, his or her activity at 0:03 is decided. The above processing is repeatedly performed and the activity after 3 minutes is stochastically decided from the current activity. The activity transition probabilities are also estimated from the time use survey [12]. Figure 3 shows an example of the simulation results of the daily activity schedules of a family. Then, we estimate 3-minute demand profiles of electricity and hot water corresponding to the simulated living activities. Table 2 and Table 3 show the unit consumptions of electricity and hot water. For instance, when some family members watch TV from 8:00 to 10:00, 107 W electric power consumed by the TV occurs from 8:00 to 10:00. We assume that the whole demand for space heating and cooling is provided by electrical air conditioners, and the electric consumption for space heating and cooling is calculated separately by a household   heating and cooling simulation model 1 . The house where the family lives is assumed to be a detached house in Tokyo. Figure 4 shows the estimated electric power and hot water profiles of a typical household and the average of 200 households on a summer weekday. The demand estimation every 3 minutes successfully reproduces  spikes from using high-energy appliances, such as a hair dryer and microwave oven.

Residential PV Output Estimation
The generated power from PV,

( )
, pvE d t , can be estimated by: We use 1-minute global solar radiation data observed at the Tokyo District Meteorological Observatory [13] and estimate the 3-minute electric power from the 3.0 kW PV system in summer, winter, and mid-season. Figure 5 shows the estimated PV electric output profile on July 27 th and the average profile in summer. As shown, the PV output profile draws a smooth curve on average, whereas the electric power fluctuates greatly.

Energy Supply-Demand Simulation
We simulate energy supply-demand profiles every 3 minutes by using mixed integer programming. The target function of this programming minimizes the household energy cost. The household energy cost is composed of the initial cost of the energy apparatus ( COSTini ), electricity charge ( . COSTelec ), gas charge ( COSTgas ), and benefit from selling PV electricity ( BENEsell ): .

COST COSTini COSTelec COSTgas BENEsell
Monthly amortized initial costs to purchase the energy apparatus can be derived by: The price, subsidy, and lifespan of each energy apparatus are shown in Table 4.
Both electricity and gas charges are the sum of the basic charge and the commodity charge, as shown in the following equations: .
, ( ) , pvEgr d t : Electricity from PV back to the grid at time t on day d (kWh). CO 2 emissions by energy consumption are also calculated by setting the CO 2 emission basic units as below: where E F : CO 2 emission basic unit of electricity (0.69 kg-CO 2 /kWh); G F : CO 2 emission basic unit of electricity (2.21 kg-CO 2 /m 3 ). This mixed integer programming consists of 461,432 equations and 389,462 variables about cost, CO 2 emissions, energy balance, and household energy apparatus (fuel cell, PV, and battery). Table 5 shows performances of our assumed household energy apparatus.

Results and Discussion
We simulate household energy supply and demand every 3 minutes with various combinations of energy appa-  Table 4. Price, subsidy, and lifespan of household energy apparatus.  ratus: fuel cell, battery, PV, and a conventional gas tankless water heater (efficiency = 0.80). Table 6 shows the combinations of household energy apparatus assumed in each case in this study. In the hybrid generation (HB) and hybrid with battery (HB + BT) cases, both a fuel cell and a PV system are installed. Then, we evaluate electricity consumptions, energy costs and CO 2 emissions for six cases. We don't evaluate gas consumptions directly, but we indirectly consider the consumptions by energy costs and CO 2 emissions calculation in Equations (5) and (7). Figure 6 shows the annual electricity consumptions in each case. Here, the electricity self-sufficiency rate self R is calculated by:

Electric Self-Sufficiency Evaluation
where fcE : Annual electricity generated from the fuel cell (kWh/year); pvE : Annual electricity generated from the PV (kWh/year); Edm : Annual electricity demand (kWh/year). In the base case, the total electricity consumption of 6487 kWh is supplied from the grid. When a fuel cell is installed into the household, about 4000 kWh of electricity is generated from the fuel cell, and it provides for about 60% of the total electricity consumption in each household. When the residential PV system is introduced, surplus electricity from the PV goes back to the grid. More electricity can be reversely transmitted when the Hybrid with battery (HB + BT) X X X Figure 6. Annual electricity supplied from household energy apparatus and from/back to the grid.
household has the hybrid generation system and battery. In the case of HB and HB + BT, electricity back to the grid is more than the purchased electricity, and thus the electricity self-sufficiency rates are over 100%. This result indicates that a household with a fuel cell and a PV system is a net-zero energy house (NZEH). Figure 7 shows the annual energy costs in each case. First, we assess the economic effect of the fuel cell by comparing the energy cost in the FC case to that in the base case. The total energy cost is 294.9 thousand JPY/ year in the base case and 392.7 thousand JPY/year in the FC case, and the annual cost increases by 97.8 thousand JPY/year when a fuel cell is installed. The cost increase is caused by the additional amortized initial cost for the fuel cell (+163.8 thousand JPY/year) and exceeds the energy charge saving (−66.0 thousand JPY/year). Next, we appraise the economic effect of using a battery with a fuel cell by comparing energy costs in the FC case and the FC + BT case. The annual energy cost is 392.7 thousand JPY/year in the FC case and 570.1 thousand JPY/year in the FC + BT case, which is about 1.5 times greater. The initial cost difference of 177.4 thousand JPY/year directly influences the total energy cost. The energy charges saved are very low because peakload pricing is not considered. Finally, we assess the influence on the energy cost by installing a residential PV system. As a result of the comparison between the base and the PV case, or between the FC case and the HB case, we find that the energy cost slightly decreases by introducing the PV system into the household. This is mainly due to the benefit of selling surplus electricity from the PV. Although the energy charge in the HB+BT case is relatively high, this is offset by the selling benefit.    mental effect of the fuel cell by comparing CO 2 emission in the FC case to that in the base case. In the base case, 4.03 t CO 2 is emitted every year; on the other hand, 3.12 t CO 2 is emitted in the FC case. Introducing a fuel cell reduces CO 2 emission by 22.4%, and its marginal cost is 108.5 thousand JPY/t CO 2 . Second, we assess the environmental impact of installing the PV system. The annual CO 2 emission is 2.88 t CO 2 and a reduction of 1.95 t CO 2 emission is enabled by the residential PV system. This reduction is equivalent to 28.4% of the CO 2 emission in the base case. The marginal cost for CO 2 reduction is 34.8 thousand JPY/t CO 2 , when the selling benefit is not considered. Third, we evaluate the reduction of CO 2 emission by installing the hybrid generation system. The comparison between the base case and the HB case suggests that 2.00 t CO 2 , or 49.5% of CO 2 emission, can be reduced each year by the household fuel cell and the PV system. The social marginal cost excluding the selling benefit is 100.0 thousand JPY/t CO 2 . Table 7 summarizes the electric self-sufficiency, economic, and environmental effects by installing various household energy apparatus. Introducing a fuel cell and a PV enables the reduction of CO 2 emission from the residential sector, although the initial costs for purchasing these apparatus are required. The introduction cost of the residential PV system can be offset by selling surplus electricity from the PV back to the grid. On the other hand, a fuel cell costs an additional 100 thousand JPY in each year. Using a battery with a fuel cell does not have any effects on a household's electric self-sufficiency or CO 2 emission, and increases the annual energy cost by 170 -180 thousand JPY. For further study on introducing a battery into a household, cost-driven measures such as peak load pricing have to be considered. Furthermore, we focus on economic and environmental impacts of household energy use, and we don't examine the impacts of manufacturing and disposing energy apparatus.  For comprehensive economic and environmental evaluation, we need to carry out macro-economic analysis and life cycle assessment (LCA) of those energy apparatuses.