Survey on Flexibility Market Implementation and Development

S. Ruggeri, S. Cianotti, I.M. Gianinoni, J. Lucas, A. Meletiou, E.C. Ormeño-Mejía, M. Troncia

Summary:

Growing renewable penetration and decarbonization drive DSOs to explore local flexibility markets under the EU Clean Energy Package DSOs procure flexibility (demand response, distributed generation, storage, aggregators) to manage grid constraints, optimize assets and defer reinforcement survey of ten experts from Europe (Austria, Belgium, France, Italy, Spain, UK), Asia (India, Japan, South Korea) and Canada covering platform design, services, TSO-DSO coordination and data exchange market maturity ranges from pilot to operational - the UK and France have established frameworks while Austria, Belgium, Italy, Japan and others are in pilot or planning phases primary objectives include congestion management, voltage control and integration of renewables; motivations involve reducing reinforcement costs and renewable curtailment pricing models vary, with pay-as-bid most common, and only Canada and the UK allowing stacking with wholesale or capacity markets challenges include regulatory uncertainty, limited market liquidity, inadequate ICT infrastructure and privacy/cybersecurity concerns innovative pilots-Austria's Industry4Redispatch, Japan's Connect & Manage 2.0, the UK's Piclo Flex and Demand Flexibility Service-test digital marketplaces and national-level demand response policy recommendations call for structured TSO-DSO coordination, standardized communication protocols and data models, clear baseline and verification methods, integration of uncertainty in market design, and scalable pilot projects and regulatory sandboxes the report concludes that flexibility markets can enhance grid efficiency and decarbonization but require regulatory clarity, improved data exchange, adequate liquidity and better TSO-DSO integration.

Spanish layman's summary:

El informe de ISGAN analiza cómo los DSO en Europa, Asia y Canadá desarrollan mercados locales de flexibilidad para gestionar la red e integrar renovables, afrontando retos regulatorios y de datos.

English layman's summary:

The ISGAN report reviews how DSOs in Europe, Asia, and Canada develop local flexibility markets to manage grid constraints and integrate renewables amid regulatory and data challenges.

Keywords: Smart Grids, electricity markets, flexibility, innovation projects.

IIT Project: BeFlexible (BeFlexible)

Funding entity: Comisión Europea. Horizon Europe

Publication date: 29-Oct-2025