The value of distributed flexibility for reducing generation and network reinforcement costs

Abstract

This paper studies the costs and benefits of distributed flexibility for the 2030's electric system for generation and the reinforcement of the distribution network. Two key results emerge from this work based on real-world microdata for flexibility resources and network description and assessed with a detailed unit commitment model. First, the economic benefits of local flexibility resources to minimize generation costs are substantial but counterbalanced by high investments in distribution grids whenever a short-term signal for flexibility control is used. Second, these benefits increase with filtering, the technical limitation by the network operator of bids to avoid congestion.