A simulation-based assessment of Community-Based Energy Trading for circular energy sharing in low-income communities

Abstract

The growing adoption of decentralised renewable energy, particularly solar photovoltaic (PV) systems, presents opportunities to advance low-carbon development and circular economy objectives. However, unequal policy frameworks, infrastructure availability, and socio-economic conditions continue to limit equitable outcomes, especially in under-resourced communities. This study presents a simulation-based proof-of-concept evaluation of a Community-Based Energy Trading (CBET) framework designed to operationalise energy circularity within low-income communities through local energy redistribution. The proposed CBET model centres on a public school equipped with solar PV generation acting as a single prosumer that redistributes surplus electricity to nearby households using rule-based energy allocation rather than optimisation-based control. Using empirical electricity demand data for one school and five households in Cape Town, South Africa, two system configurations are simulated: CBET without household battery storage and CBET with battery-enabled households. Performance is evaluated in terms of local renewable energy utilisation, household electricity cost reductions, and peak-period grid demand. Results indicate that CBET increases local solar energy reuse efficiency to approximately 90% and reduces household reliance on grid electricity by up to 16% when battery storage is included. In addition, peak-hour demand is reduced by 13%, contributing to improved grid stability, energy equity, waste minimisation, and community-level resilience. These findings demonstrate that meaningful techno-economic benefits can be achieved through simplified community-level energy sharing arrangements without complex market mechanisms. However, the results are contingent on the assumed demand profiles and the single case configuration analysed. The study positions CBET as a feasible proof-of-concept for community-scale circular energy sharing systems operating under local capacity and policy constraints in the Global South.