Local flexibility markets: Literature review on concepts, models and clearing methods

Abstract

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A Framework for Offering Short-Term Demand-Side Flexibility to a Flexibility Marketplace

“…Flexibility can be sold based on bilateral contracts between the DSO and the aggregator, for instance by the DSO issuing a flexibility request in cases where congestion or voltage problems occur [5][6][7], or it can be offered by actively trading on flexibility marketplaces [8,9]. A recent review of the literature on local flexibility markets is given by Jin & Jia [10]. They classify and organize the literature based on potential market designs (centralised optimization models, game-theory based models, auction theory based models and simulation models) and market clearing methods (centralized optimization, cecomposition methods, multi-level optimization and optimization with uncertainties).…”

Ict Solutions for Local Flexibility Markets

“…A local flexibility market (LFM) can be defined as a flexibility products or services trading platform in geographically limited areas [7]. In this context, an LFM includes products or services to be traded in the LFM, market operator, market participants, and market clearing mechanism [1].…”

“…Ref. [1] proposed a four-layer structure for LFMs to show the potential key technologies used in the LFMs. It includes the power grid layer, the ICT layer, the control layer, and the market layer.…”

“…The market layer is responsible for the management of flexibility transactions in the LFM. Jin et al [1] presented a detailed review of concepts, formulations, and clearing methods of LFMs. For more details regarding the LFM, one can refer to [1].…”

“…Such issues could be analysed considering the flexibility services that could be locally traded and rewarded. Since there are different entities such as: Transmission System Operators (TSOs) that manage the power system balancing, frequency control and congestion management; Distribution System Operators (DSOs) also handle the congestion management and voltage regulation [1], [2] and retailer the imbalance minimization, various flexibility products and markets can be envisioned. For TSOs, the ancillary services market and balancing market cope with TSOs concerns that are more at the power system level, while DSOs have to encounter local voltage and congestion issues that could be solved by implementing the concept of LFM.…”