• Energy Research
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Local flexibility markets (LFMs) are a market-based concept to integrate distributed energy resources into congestion management. However, the activation of flexibility for storage-based flexibility changes the respective state of charge. Compensation in later points of time is needed to regain the original flexibility potential. Therefore, we propose a LFM bid formulation including both flexibility and compensation. Furthermore, flexibility market participation might lead to inc-dec-gaming, i.e., congestion-increasing behavior to maximize profits. However, this inc-dec-gaming might lead to electricity market schedule deviations if LFM offers are not activated. We propose a risk-averse modeling formulation considering the potential non-activation of LFM bids to provide a framework for the assessment of LFM participation comparing different approaches. Our exemplary case studies demonstrate the proposed LFM bid formulation and show the impact of LFM participation modeling on inc-dec-gaming and congestion management costs.

<p>The energy system decarbonization leads to a decentralization of generation and flexibility. Among the new concepts to integrate the distributed flexibility are local energy markets. While a broad range of research investigates local energy markets on a distribution grid level in detail, research on their system impact has been limited. Therefore, we develop a framework to investigate different configurations of local markets and operation of distributed energy resources and their interaction with the wholesale markets. This framework is applied to a pan-European case study with detailed bottom-up modeling of local energy markets in France and Germany. Additionally, transmission grid simulations are carried out to investigate the impact of local trading on grid congestions. Our results show that a direct coordination of distributed flexibility within the wholesale market is more efficient than a preference of local trading. Nonetheless, local energy markets can be used as an incentive for expansion of distributed flexibility as well as a way to break down the complexity of coordinating millions of distributed assets in a single market. Additionally, our results show that local trading relieves the transmission grid. </p>