Local Flexibility Market Research Articles

Quantifying the impact of flexibility asset location on services in the distribution grid: Power system and local flexibility market co-simulation

This research investigates the effectiveness of incorporating locational sensitivity factors into local flexibility market clearing mechanisms for effective congestion management and voltage regulation in distribution grids. A centralized local flexibility market optimization model is developed that considers technical and economic constraints. The study aims to explore the requirements for data availability, data quality, and reliable data exchange that can facilitate a broader range of flexibility services, thereby promoting the development of a local flexibility market. Sensitivity factors, including power transfer distribution factors, voltage sensitivity coefficients and transformer sensitivity coefficients, are used to quantify the impact of flexibility asset locations on congestion management and inform clearing rules. These static metrics are insufficient for establishing effective local flexibility market clearing rules when flexibility is procured by distribution system operators. The approach considers the state of the grid when calculating the sensitivity coefficients, which leads to a more accurate evaluation of flexibility bids, especially with regard to the impact of location on congestion management. The proposed mechanism for clearing the local flexibility market assumes continuous communication between the proposed local flexibility market operator and the distribution system operator for dynamic, iterative market clearing, which ensures the protection of grid data and a more accurate bid evaluation. The study demonstrates that the inclusion of locational information significantly increases the effectiveness of the proposed local flexibility market-based congestion management. The developed simulator for the proposed local flexibility market provides valuable insights into the interaction between the proposed local flexibility market and the distribution grid. The research results, derived from selected use cases, emphasize the importance of location-based sensitivity factors in the proposed local flexibility market clearing for distribution grids. The proposed approach offers a promising solution for optimizing congestion management and voltage regulation while ensuring efficient integration of distributed energy resources into distribution grids.

Assessment of the Technical Impacts of Electric Vehicle Penetration in Distribution Networks: A Focus on System Management Strategies Integrating Sustainable Local Energy Communities

Aligned with the objectives of the energy transition, the increased penetration levels of electric vehicles as part of the electrification of economy, especially within the framework of local energy communities and distributed energy resources, are crucial in shaping sustainable and decentralized energy systems. This work aims to assess the impact of escalating electric vehicles’ deployment on sustainable local energy community-based low-voltage distribution networks. Through comparative analyses across various levels of electric vehicle integration, employing different charging strategies and system management approaches, the research highlights the critical role of active system management instruments such as smart grid monitoring and active network management tools, which significantly enhance the proactive management capabilities of distribution system operators. The findings demonstrate that increased electric vehicle penetration rates intensify load violations, which strategic electric vehicle charging management can significantly mitigate, underscoring the necessity of load management strategies in alleviating grid stress in the context assessed. This study highlights the enhanced outcomes derived from active system management strategies which foster collaboration among distribution system operators, demand aggregators, and local energy communities’ managers within a local flexibility market framework. The results of the analysis illustrate that this proactive and cooperative approach boosts system flexibility and effectively averts severe grid events, which otherwise would likely occur. The findings reveal the need for an evolution towards more predictive and proactive system management in electricity distribution, emphasizing the significant benefits of fostering robust partnerships among actors to ensure grid stability amid rising electric vehicle integration.

A multi-stage techno-economic model for harnessing flexibility from IoT-enabled appliances and smart charging systems: Developing a competitive local flexibility market using Stackelberg game theory

The increasing integration of renewable energy sources with power systems has led to greater uncertainties, heightening the need for more flexible services. Demand-side resources can provide significant flexibility cost-effectively, making it crucial to design new business models to harness their flexible capacities. Hence, this paper introduces a three-stage techno-economic framework designed to enhance the exploitation of flexible capacities from demand-side resources such as Internet-of-Things (IoT)-Enabled Appliances (IEAs), Battery-Integrated Rooftop Solar Panels (BIRSPs), and Electric Vehicle (EV) smart charging systems in the local flexibility market. The proposed framework operates in three stages. First, smart homes with IEAs, BIRSPs, and smart charging systems assess their flexibility and report it to their Microgrid (MG) operators. Next, MG operators optimize strategies to maximize market returns and report capacities to the Distribution System Operator (DSO). Finally, the DSO manages flexibility transactions based on MG inputs. A Stackelberg game theory model using a gradient-based method updates the coupling variables between market parties, ensuring convergence in the second and third stages within a decentralized space with limited information sharing. Implemented on a modified IEEE 69-node distribution system, the model fully utilizes the potential of smart homes, including IEAs, BIRSPs, and smart charging systems in the local flexibility market. It reduces the Upstream Network (UN) share in the local flexibility market by 56.86% and decreases DSO costs for energy balancing by 22.36%.

Maximizing social welfare in local flexibility markets by integrating the value of flexibility loss (VOFL)

The increasing integration of Renewable Energy Sources (RESs) poses challenges due to their unpredictable nature. To address these challenges, flexible Distributed Energy Resources (DERs), such as Distributed Generators (DGs), Flexible Loads (FLs), and Energy Storage Systems (ESSs), have emerged in distribution networks. This paper proposes a linear programming formulation for optimizing flexibility provision in the Local Flexibility Market (LFM) to maximize Social Welfare (SW), contrasting with existing literature. The concept of the Value of Flexibility Loss (VOFL) is introduced to enable the Distribution System Operator (DSO) to optimize flexibility procurement, ensuring economic profitability for both providers and consumers. Additionally, the DSO can interchange flexibility with the Transmission System Operator (TSO) based on economic incentives. Numerical results demonstrate the accuracy and efficiency of the proposed model.

Establishing a hierarchical local market structure using multi-cut Benders decomposition

Local electricity markets (LEMs) such as peer-to-peer (P2P) and community-based markets allow prosumers and consumers to exchange electricity products and services locally. In order to coordinate electricity trading and flexibility services, this paper proposes a hierarchical prosumer-centric market framework with a hybrid LEM and a local flexibility market (LFM). Multi-cut Benders decomposition (MCBD) is employed to decompose the integrated hybrid LEM into a centralized P2P market and multiple community-based markets. The aggregators coordinate energy sources and demands of households in low voltage (LV) distribution networks (DN) as virtual power plants (VPPs) and engage in trading through a P2P market over the medium voltage (MV) DN. In addition, a modified MCBD (M-MCBD) approach is proposed to accelerate the convergence process. The LFM is operated by the distribution system operator (DSO) and is formulated as a mixed-integer nonlinear programming (MINLP) problem which is further relaxed to a mixed-integer second-order cone programming (MI-SOCP) problem. The case study demonstrates that aggregators were able to collaborate on trading within the hybrid LEM to minimize the costs incurred by prosumers within the network. Furthermore, the proposed M-MCBD method improves the scalability of the MCBD by enhancing its convergence speed and accuracy, as demonstrated by testing on problems of varying scales.

Techno-economic analysis of electrical flexibility in combustion-based district heating systems: A Swiss case study

Nowadays, the expected growth of local flexibility markets and demand-response mechanisms is urging researchers and practitioners to obtain flexibility from all possible devices, including those historically considered as “stiff”. To this end, this work proposes an alternative control strategy for combustion-based district heating systems allowing the pumping system to operate as a flexible load. The idea is investigated via simulation in the case study of Capriasca (Lugano), within the framework of the EU-H2020-ACCEPT project. Starting from historical on-field measurements of heat consumption, a techno-economic analysis is conducted upon the flexibility obtainable from the pumping system, along with its cost, in two different scenarios: (i) participation in a local flexibility market and (ii) participation in a demand response program. Eventually, further to proving the viability of the proposed idea, the analysis shows that percent flexibility between 25% and 70% of the pumping system rated power can be reached, depending on the heat consumption. The additional economic advantages of flexible DHS operation in low electricity price scenarios are also highlighted.

Capacity limitation based local flexibility market for congestion management in distribution networks: Design and challenges

In this paper, five of the main design challenges of local flexibility markets (LFMs) for congestion management are identified and discussed based on desirable market properties from economics theory and literature review. The five main design challenges are low market liquidity, reliability, baselines, forecast errors at low aggregation levels, and the high cost of measurements. A comprehensive capacity-limitation based LFM design has been proposed to address the challenges and a simulation example is presented to illustrate the design. The proposed design facilitates market participants’ decision making by design elements that improve market liquidity, reliability and handling of forecast errors. Moreover, a new capacity limitation product is proposed that is not defined with respect to a baseline and does not require sub-meter measurements leading to lower costs and conflict-of-interest in delivery validation. Generic algorithms are also proposed for calculating utility and cost of the flexibility product. The proposed design and discussions can contribute to improving the inter-disciplinary area between engineering and economics while helping policy-makers and LFM stakeholders to further understand the problem from a multi-dimensional perspective.

Decoding design characteristics of local flexibility markets for congestion management with a multi-layered taxonomy

Local flexibility markets are becoming increasingly popular smart grid solutions. They connect customers who require flexible electricity supply and demand with local flexibility providers. However, the growing number of diverse solutions has led to a proliferation of concepts, projects, and companies in this market, with this diversity making understanding and comparison difficult. To tackle this challenge, we propose a multi-layered taxonomy of local flexibility market solutions. This focuses on congestion management on the distribution side of this activity; a crucial service for distribution system operators. Our taxonomy utilizes the Smart Grid Architecture Model to describe these markets comprehensively. We employ an iterative taxonomy-building method, refining and evaluating it through insights from ongoing implementations and twenty-eight expert interviews. Moreover, we present a complete instantiation of our taxonomy and offer a discussion with practical recommendations for practitioners in the local flexibility market landscape.

The impact of transparency policies on local flexibility markets in electric distribution networks

The energy transition brings various technical, economic, and organizational challenges. One major topic, especially in zonal electricity markets, is the organization of future congestion management. Local flexibility market (LFM) is an often discussed concept of market-based congestion management. Like the whole energy system, the market transparency of LFMs can influence individual bidders' behavior. In this context, the predictability of the network status of distribution networks and an LFM's outcome, depending on a given transparency policy, is investigated in this paper. For this, forecast models based on artificial neural networks (ANN) are implemented on synthetic distribution network and LFM data. Three defined transparency policies determine the amount of input data used for the models. The results suggest that the transparency policy can influence the distribution network status and LFM outcome predictability, but appropriate forecasts are generally feasible. Therefore, the transparency policy should not conceal information but provide a level playing field for all parties involved. Providing semi-disaggregated data on the network area level can be suitable for bidders' decision-making and reduces transaction costs.

An Incentive-based robust flexibility market for congestion management of an active distribution system to use the free capacity of Microgrids

Microgrids (MG) formation has changed the passive structure of the distribution system. MGs participate in local energy markets as separate decision-making units to optimize their economic profit by energy trading with the distribution system operator. However, in the transition-duration from passive to active configuration, the lack of sufficient infrastructure may define new challenges for distribution system security. This paper proposes a robust model of a local flexibility market to incentivize the MGs to provide flexibility services to relieve line congestion. The proposed market model is, based on a request and response structure by adopting a modified ADMM method for flexibility services negotiations. The proposed flexibility market is considered a complementary market for bilateral energy trading of MGs and a distribution system for a fairer environment. The distributed market frameworks keep data privacy and a low computational burden for the market clearing process. The IEEE 33 bus test system with four connected MGs is considered to simulate the proposed model. For results validation, the social welfare function result is compared with the centralized problem structure, and the effects of flexibility market separation are analyzed with a comparison with a security constraints-based market design.

Mechanism Design of Blockage Management Based on Local Flexibility Market under High Proportion of Distributed Energy

Continuous access to distributed energy sources greatly increases the uncertainty and complexity of distribution network operations. The distribution network is prone to congestion phenomena such as voltage or tide overruns and equipment overloads, thus causing a decrease in distribution network power supply reliability. Blockage management in distribution networks based on local flexibility markets is one of the blockage management methods currently adopted in many European regions. In order to clarify the operation mechanism of the local flexibility market, firstly, the basic requirements of the local flexibility market are introduced, including the concept of the local flexibility market, market members, and their rights and responsibilities; secondly, four key issues of local flexibility market construction are analyzed in detail: timing, controllability of resources, operating ownership, and Coordination of market members. Further, the organization and transaction process of the European local flexibility market is sorted out. Finally, two typical cases in the UK and their current market operation are introduced.

Success of local flexibility market implementation: A review of current projects

Success of local flexibility market implementation: A review of current projects

Prevention of strategic behaviour in local flexibility markets using market monitoring – Concept, application example and limitations

Market-based congestion management has been proposed as a more efficient means of coping with congestion issues in zonal market designs. However, strategic behaviour has been identified as a fundamental problem of market-based approaches. This paper focuses on strategic behaviour in the setting of a local flexibility market. In this type of market, trading occurs in parallel with the intraday market and flexibility is verified by reporting baselines through a verification platform. Under these conditions, market monitoring based on statistical tests is presented as a countermeasure. By implementing tests that are robust against autocorrelation and based on the illustrative example, it is shown that the identification of strategic behaviour is possible. In combination with appropriate regulatory sanctioning, strategic behaviour can become less attractive and, in the best case, be prevented leading to a reduction in congestion management costs. The simplified example presented in this paper can serve as a basis for more complex use cases where additional factors need to be considered.

Interpretation and Quantification of the Flexibility Sources Location on the Flexibility Service in the Distribution Grid

The economic and technical requirements of current changes in the distribution system are reflected in the use of all available resources and the activation of mechanisms for local use of flexibility. Local flexibility markets are evolving and face numerous obstacles for which appropriate solutions must be found. The local flexibility market will be complemented by the development of a local flexibility register, which will contain all relevant information about the flexibility assets necessary for the efficient operation of the local flexibility market. In this paper, interpretation and quantification of the flexibility sources location on the flexibility service in the distribution grid is given. The information is derived from power flow simulation results and finally written down in the form of line coefficients, which are determined by applying the least squares method to the power flow results. We have developed a Python-based simulator to perform the methodology to determine the information and test it on a realistic medium voltage distribution grid in Bosnia and Herzegovina. This paper confirms the approximate linearity of the active power changes on the demand side to the line load and to the voltage at the nodes for a given operating condition of the distribution grid.

RETRACTED: Policy Framework Enabling Flexibility Markets—Bulgarian Case

The legislation at the EU level is decisive in developing the local flexibility market. At the current stage, there are far-from-sufficient regulations on the local flexibility market, which can be perceived as a major barrier. The scope of this article is to explore the operational principles of the European local flexibility market and to assess the regulation of emerging flexible markets in order to help a new policy framework that facilitates the integration of flexible assets in the distribution grid. Although the evaluation primarily focuses on current regulations, numerous modifications are still being made to them, such as those brought about by the implementation of the Clean Energy Package. The possibility of the research material quickly becoming outdated makes this difficult. To reduce this risk, we also examine current debates over potential restrictions; nonetheless, the core of the report mainly applies to laws and policies that were in force prior to the second half of 2022. An examination and analysis of potential flexibility providers’ motives to offer flexibility on a local flexibility market were conducted concurrently with the regulatory assessment. The inquiry was initiated by identifying resources that may be used to improve the flexibility of the electrical system but are underutilized. Underutilized resources refer to assets that are already part of society, such as efficient energy use, support for behavioral changes, heating systems (such as district heating, heat pumps, and thermal inertia), as well as underutilized energy storage capacities that are underutilized in terms of supplying flexibility to the electric grid. Resources were found via conducting interviews and studying scientific literature. The rules and guidelines for the emerging local flexibility markets are examined in this study. The regulations need to be continually improved because they are far from complete.

A local flexibility market framework for exploiting DERs’ flexibility capabilities by a technical virtual power plant

This paper presents a new intra-day intra-hourly local flexibility market (LFM) framework to exploit distributed energy resources’ (DERs) flexibility capabilities. A technical virtual power plant (TVPP) operates the LFM in which the DER aggregators participate. The TVPP offers the provided flexibility capabilities to wholesale flexibility market (WFM) as well as compensating the intra-hourly variability in power distribution network. In the proposed framework, the TVPP clears the LFM by considering hierarchical transactions with the aggregator agents to find the market equilibrium in which the DERs’ flexibility capabilities are optimally exploited while all participating agents make profit by trading flexibility capabilities in the LFM. A bilevel optimization model with multiple lower levels is considered to address different agents’ preferences and transactions in the LFM. In the upper-level problem, the TVPP aims at maximizing its profit while each lower-level problem represents an aggregator agent's optimization problem. The proposed model is reformulated into a single-level mixed integer linear programming problem and is implemented on the distribution network connected to Bus 5 of the Roy Billinton test system (RBTS) as well as a 119-bus test system. The results demonstrate the effectiveness of the model to utilize DERs’ flexibility and provide revenue opportunities for different agents.

Designing a new procedure for participation of prosumers in day-ahead local flexibility market

With the high penetration of Renewable Energy Resources (RERs) into power systems, distribution systems are facing various challenges due to their intermittency and uncertainty. One of the ways to cope with uncertainty and variability of the RERs is utilizing flexibility by market tools to enable active system management. Local Flexibility Markets (LFMs) provide opportunities to trade flexibility among distribution system operators and other participants (e.g., aggregators) in an economically efficient way. This research proposes an interactive framework for prosumers by a market-based platform to utilize and trade flexibility. The suggested framework comprises a novel flexibility allocation process which is performed through a Day-Ahead (DA) flexibility market mechanism. In the proposed process, market participants adjust their flexibility bids, which is done under a fair and competitive market mechanism. The results of the simulation validate the major features of the proposed framework and satisfy DSO’s purposes in congestion management.

Day-ahead local flexibility market for active and reactive power with linearized network constraints

This paper presents a Day-Ahead Local Flexibility Market in the Distribution Network cleared using a novel Successive Linear Programming algorithm for Optimal Power Flow in the Distribution Network. The proposed algorithm is shown to be robust and produce high quality, AC feasible solutions with satisfactory solution speed. The efficiency of the proposed algorithm is validated via its application in various distribution networks and under different loading scenarios. The proposed Flexibility Market encompasses flexibility products for upward and downward active energy as well as service products for the provision of reactive power. The efficiency of the proposed Flexibility Market in solving operational issues of the distribution network is demonstrated via a case-study.

Stochastic local flexibility market design, bidding, and dispatch for distribution grid operations

In order to unlock the flexibility potential of energy consumers and prosumers, the development of market mechanisms for flexibility planning and procurement is necessary. The authors propose a stochastic local flexibility market to solve grid issues such as voltage deviations and grid congestion in a distribution grid. Their proposed solution includes activation of flexibility assets at the consumers’ premises, using a stochastic local flexibility market design. They consider a pooled local flexibility market design under demand uncertainty and stochastic bidding process. Optimization models are used to determine flexibility demand and supply bids by the distribution system operator and the aggregator respectively. A stochastic AC-optimal power model to determine flexibility demand and a two-stage stochastic model to supply flexibility are implemented to simulate a stochastic local flexibility market. This allows to determine stochastic flexibility supply bid curves, and optimum flexibility supply dispatch. The analysis shows that the cost of grid operations is reduced when the system uses the local flexibility market. The proposed methodology is applicable for local flexibility market designs aiming to use potential end-user flexibility for grid operations.

Two-Layer Game-Based Framework for Local Energy Flexibility Trading

A new configuration is required to model the behavior of customers, aggregators, the distribution system operator (DSO), and their interactions due to the active participation of customers in the local flexibility market. To this end, we propose a two-layer game-based framework that models agents’ behavior and their interactions. Thus, firstly, at the inner layer, customers and aggregators set their decision variables considering the decisions of each other performing an iterative game. After the inner layer game concludes, in the outer layer, the DSO determines its decision variable according to the decision of aggregators and customers. If the convergence condition is satisfied, the game of the outer layer concludes. Otherwise, there is another inner game and subsequent outer game until the satisfaction of convergence condition. Therefor, customers, aggregators, and the DSO have similar decision-making power. Since all of them can make their own decisions and modify them according to others’ decisions. To study our model, we consider three scenarios with different levels of freedom while decision-making for customers that is resulted from different levels of limitation for arbitrage avoidance. Our results illustrate that our iterative approach is converged after few iterations in both the inner and the outer layer. Moreover, customers who have a contract with the same aggregator behave similarly. Furthermore, aggregators benefit from customers’ freedom, while it is very destructive for the DSO and increases its objective function.