FlexiGrid webinar: What are the desirable characteristics of a local market and what are the specific aspects that must be considered in its design and what makes a market efficient?
With special focus on market liquidity and perfect information within the context of local energy and flexibility markets, FlexiGrid recently had a workshop on local market design to find out what the key issues are.
“I think we had a very good discussion, and many valuable insights were raised”, says Wenche Tobiasson, expert in grid services and market designs, regulation and business models at RISE Research Institutes of Sweden.
Size of the market
Most of the participants agreed that the size of the market is key. It needs to be small enough to be able to solve location-specific and narrow issues yet big enough to include a sufficient number of actors to ensure market liquidity. The current levels of available supply and demand of flexibility services and products were raised as a current issue, which would make it difficult to establish a market in the first place. This issue is amplified by the lack of accurate forecasting and ability to measure or quantify the available flexibility.
The importance of aggregators
Aggregators, market actor that combine several customers’ electricity use or electricity production for sale, purchase or auction in organised energy markets, are thought to be important, both for market liquidity and information requirements. Aggregators would open to more smaller actors’ participation and possibly, together with targeted regulation, reduce the need for symmetric or perfect information. As a result, aggregators could reduce the incentive requirements for households and other smaller actors to participate in the market by making it easier to access.
Trust and transparency
Trust and transparency throughout the market will be important to guarantee that actors deliver what has been agreed and a new role for the DSO (Distribution System operator), yet to be defined, will be necessary and must function in tandem with current DSO safety and reliability requirements. This will all be reliant on the technical readiness and new technologies, from smart meters to the development of a suitable platform, which would allow for fast and frequent trades, possibly automated based on bids and offer availability.
Useful for the demo sites
The outcome from the workshop will be utilised in the design and evaluation of the local energy and flexibility markets to be tested at the demo sites.