Assessing the costs of electric flexibility from distributed energy resources: A case from the Netherlands

Abstract

Managing electric flexibility is of importance for reliable electricity supply, especially in a situation with increasing penetration of renewable electricity production. One of the capabilities of electricity smart grids is the possibility to incorporate distributed energy resources for provision of electric flexibility to the system. This paper presents an approach to determine the investment and short-term average costs of distributed energy resources to supply flexibility services in a local system, and compares those costs to the average costs in the Dutch markets for balancing and day-ahead flexibility. The approach in this paper is useful for techno-economic analysis of flexibility from distributed energy resources and the economic valuation of flexibility for trading in traditional markets. The analysis shows that local flexibility in many cases is much more expensive than centrally provided flexibility.