Congestion Management using Local Flexibility Markets: Recent Development and Challenges

Abstract

Increasing amount of renewable based distributed generation at distribution systems, leads to an increased need for active distribution network management dealing with local network congestion and voltage issues. Development of local flexibility markets aims to provide a market-based solution to these issues. This paper presents a comprehensive review of proposed approaches towards markets exploiting the flexibilities from the demand-side. Efforts have been made on presenting a systematic overview of market design, including e.g. framework, participation, bidding and clearing mechanisms, of local flexibility market proposals developed in recent years. The implementation and regulatory issues and challenges are also discussed. The paper also presents the conceptual framework of the local flexibility service market which is currently being developed within UNITED-GRID project. This proposal aims to provide a holistic approach on local service markets, so that Distribution System Operators (DSOs) are provided with a market-based instrument to manage their networks efficiently.