Deliverable 5.1 Identification of relevant market mechanisms for the procurement of flexibility needs and grid services

Deliverable 5.1 was produced under Work Package 5 Identification & assessment of innovative market mechanisms for DSO grid services

March 2021
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One of EUniversal project’s primary goals is to overcome existing limitations in the context of flexibility to be used by Distribution Systems Operators (DSO).

The significant changes expected in the electricity system due to the energy transition and the related technology development with regards to digitalisation, allow customers to connect to 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 analyzing 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.