Missing Price Feedback Leads to Overestimation of Local Grid Peaks from Synchronized Home Battery Charging
ORIGINAL / The missing price feedback: Why studies overstate local grid peaks from synchronized home batteries under real-time pricing
This study argues that existing literature assessing the impact of home batteries on local distribution grid peaks under real-time pricing typically treats wholesale prices as exogenous, ignoring the feedback that battery charging itself raises prices and dampens synchronized charging. Using a simulation with an equilibrium wholesale price model calibrated to 2025 German data, the author finds that accounting for price endogeneity substantially reduces the estimated local gri
01 ABSTRACT
Existing studies consistently find that home batteries optimized against real-time prices create new load peaks in local distribution grids because all assets respond synchronously to the same price signal. This paper points out that most of these studies treat wholesale prices as exogenous, overlooking the feedback that charging raises wholesale prices and dampens the incentive to charge. Simulations show that with endogenous prices, the coincident local grid peak caused by synchronized charging is much lower than under exogenous-price assumptions.
02 KEY FINDINGS
- With exogenous prices, synchronous charging pushes the coincident import peak of the local grid to 83% above its no-battery level.
- With endogenous prices (including feedback), the same battery fleet leaves the peak 6% below the no-battery benchmark.
- Treating prices as endogenous reduces the coincident peak at high battery penetration nearly by half.
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