According to this latest EURELECTRIC paper, on the requirements for the interaction of flexibility and aggregation in the electricity market, the growing share of variable generation in Europe is increasing the need for flexibility in the electricity system. Flexibility on the demand side could be used by market players to optimise their portfolio as well as by system operators for balancing and constraints management purposes.
In this context, aggregation offers the opportunity to exploit the flexibility potential of smaller customers. Aggregation will allow better access of these customers to the market. By selling their flexibility to market actors, customers could benefit from lower energy bills. The design of such a flexibility market will be largely determined by the operational and market rules set out in EU network codes.
In order to allow aggregated flexibility to participate in spot and intra-day markets, system balancing and constraints management, according to this EURELECTRIC paper, the following issues need to be addressed:
- Market rules should be brought in line with the characteristics of aggregated demand response and generation. The European network code on electricity balancing should provide a level playing field for all flexibility providers.
- Balancing responsibility on a connection should be clearly defined and consistently metered. There should be no gaps or overlaps in the balancing responsibility of different actors on a connection.
- Smart meters with a reading interval corresponding to the settlement time period are a technical prerequisite for participation of such users in balancing markets.
- Constraint management and balancing are separate system operational issues. However, the aggregated flexibility services required for constraint management and balancing could be delivered by the same resources. Close coordination between constraint management and balancing will allow for higher liquidity and exchange of data between all relevant parties. This is necessary for safe operation and security of supply and for non-discriminatory access of flexibility to markets. A common place to pool this flexibility should be explored as one option for this coordination.
To view this latest EURELECTRIC paper, on "Flexibility and Aggregation - Requirements for Their Interaction in the Market", please click here.
