Local flexibility markets will become a central tool for distribution system operators (DSOs), who need to ensure a safe grid operation against increased costs and public opposition for new network investments. Despite extended recent literature on local flexibility markets, little attention has been paid on how to determine the flexibility request that the DSOs shall submit to such markets. Considering the constraints that the network introduces (e.g. line and voltage limits), so far it has been unclear how the DSO shall determine how much flexibility it requires and at which network locations. Addressing an open question for several DSOs, this paper introduces a method to design network-aware flexibility requests from a DSO perspective. We consider uncertainty, which could be the result of fluctuating renewable production or demand, and we compare our approach against a stochastic market clearing mechanism, which serves as a benchmark, deriving analytical conditions for their performance. We demonstrate our methods on a real German distribution grid.
To the best of our knowledge, this paper proposes for the first time a design of a continuous local flexibility market that explicitly considers network constraints. Continuous markets are expected to be the most appropriate design option during the early stages of local flexibility markets, where insufficient liquidity can hinder market development. At the same time, increasingly loaded distribution systems require to explicitly consider network constraints in local flexibility market clearing in order to help resolve rather than aggravate local network problems, such as line congestion and voltage issues. This paper defines the essential design considerations, introduces the local flexibility market clearing algorithm, and -aiming to establish a starting point for future research -discusses design options and research challenges that emerge during this procedure which require further investigation.
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