Market integration or bids granularity to enhance flexibility provision by batteries of electric vehicles

Abstract

For several years the European Commission has been advocating the creation of integrated electricity markets. After the wholesale market, the establishment of a common reserve market has begun with cooperation related to a Frequency Containment Reserve (FCR), a common platform for the cross-border procurement of primary reserves. The aim of this paper is to study the implications of the decision of the French regulator to join the FCR Cooperation. Two aspects will be analyzed: 1) the cost of procurement and the increase in social welfare thanks to cross-border procurement and 2) implications for the arrival of new entrants such as aggregators of distributed resources (Electric Vehicles fleet are considered in our survey). We conclude that joining the FCR Cooperation will have a negative impact on the participation of aggregators and might not play a useful role in lowering costs for the procurement of reserves. We propose new rules to solve these issues.