ENTSO-E: Function and design of local flexibility platforms

ENTSO-E: Function and design of local flexibility platforms

The pressure on Europe’s electricity networks is growing. Driven by ambitious climate targets, a majority of the electricity mix will soon comprise of intermittent renewable sources increasingly connecting to lower voltage levels.

The Distributed Energy scenario of the 2018 Ten Year Network Development Plan envisions that up to 50% of new renewable installations in 16 countries of Continental Europe will be connected to the distribution network by 2030. Electricity consumption levels and patterns too will change as consumers choose to self-generate, take up electric vehicles, and use heat pumps in their homes. These developments are happening alongside increasing digitalisation which is facilitating the wider penetration of distributed energy resources (‘DER’) and enabling them to modify their generation and/or consumption patterns to provide flexibility to both Transmission and Distribution System Operators (T/DSOs).

Against this backdrop, ‘flexibility platforms’ have emerged that are facilitating and coordinating the trade, dispatch, and settlement of energy and/or system services between T/DSOs and DERs. A recent study by Frontier Economics for ENTSO-E explores the landscape of such platforms that have emerged across Europe. The report conducts a deep dive into a selection of these platforms covering a broad range of possible functional and design characteristics; ranging from independent self-contained marketplaces, network-operated ‘intermediaries’, established wholesale, and balancing markets.

The study examines the role that these platforms perform across each step of the end-to-end procurement process and the range of innovations they deploy. We conclude by commenting at a high-level how these solutions are overcoming challenges of DER integration, and addressing the emerging need for increased coordination with wholesale and balancing markets, as well as between TSOs and DSOs going forward.

To view the report click here.

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