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Identification of relevant market mechanisms for the procurement of flexibility needs and grid services

J.P. Chaves , M. Troncia , L. Herding , N. Morell , M. Valarezo , K. Kessels , A. Delnooz , J. Vanschoenwinkel , J. Villar , J. Budke , J. Falcao , P. Marques , C. Cândido , D. Falkowski , M. Matusewicz , N. Métivier , G. Milzer , T. Gueuning , P. Crucifix


Executive Summary

Introduction

The Euniversal project, funded by the European Union, aims to develop a universal approach on the use of flexibility by Distribution System Operators (DSO) and their interaction with the new flexibility markets, enabled through the development of the concept of the Universal Market Enabling Interface (UMEI) – a unique approach to foster interoperability across Europe.

The UMEI represents an innovative, agnostic, adaptable, modular and evolutionary approach that will be the basis for developing new innovative services, market solutions and, above all, implementing the real mechanisms for the participation of active consumers, prosumers, and energy communities in the energy transition.

One of the Euniversal project’s primary goals is to overcome existing limitations in the context of flexibility to be used by DSOs. The UMEI will be implemented to foster flexibility services provision and interlink active system management of distribution system operators with electricity markets.

The significant changes expected in the electricity system due to the energy transition and the related technology development with regards to digitalisation allow the customers to connect at distribution networks and be active participants by interacting with the system. Consumers with distributed energy resources can provide electricity back to the network by installing distributed generation and storage technologies, including electric vehicles. These technologies can provide a wide range of grid services and support grid planning and operation.

To take advantage of this potential, the European Commission in the Article 32 of the Directive (2019/944) requires the Member States to create incentives for DSOs to procure grid services with transparent, non-discriminatory market-based procedures, unless the regulatory authorities have established that such service procurement is not economically efficient or that such procurement would lead to severe market distortions or higher congestions. In this scenario, to solve grid problems, DSOs can resort to internal measures, including investments in network assets, or can also take advantage of third-party assets flexibility. This flexibility can be procured through different mechanisms. The acquisition of flexibility may not depend on one specific mechanism, but will rather consist of a combination. These mechanisms have to be carefully designed to adequately complement each other, provide coherent signals, and maximise the value from all resources. They can cover all timeframes from long-term planning to real-time operation.

This deliverable aims to identify the available options that DSOs have to acquire flexibility. Both market and non-market-based alternatives are considered. However, the focus is mainly on the former, since in compliance with the Directive non-market-based solutions should be an option only when economic efficiency cannot be guaranteed. This deliverable addresses this requirement by analysing different mechanisms to acquire grid services. The suitability of each of them is assessed considering relevant context attributes related to the DSO need and the Flexible Service Providers (FSP); and following a series of evaluation criteria.
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Resumen divulgativo: This deliverable identifies the available options that DSOs have to acquire flexibility. Both market and non-market-based alternatives are considered. However, the focus is mainly on the former, since in compliance with the Directive non-market-based solutions should be an option only when economic


Proyecto del IIT: EUniversal (Euniversal)

Entidad Financiadora: Comisión Europea. H2020

30/01/2021

IIT-21-022I

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