Activating current and future flexibility potential in the distribution grid through local energy markets

Abstract

Increasing shares of volatile generation and additional peak demand through electric vehicles and heat–pumps challenge the stable operation of current and especially future distribution grids. In order to cope with these challenges, several approaches to reduce peak feed-in and demand are possible. For example, the curtailment of renewable generation or peak loads or the activation of demand-side flexibility through, e.g., time of use tariffs. Local energy markets (LEMs) are a promising alternative concept to combine various of these measures and activate untapped flexibility potential of the demand- and generation-side as well as storages. In this study, the authors propose a linear optimisation-based market mechanism that can explicitly consider demand, generation and storage flexibility in the form of flexibility orders. Through the simulation of a LEM in a rural region of Germany with a high share of renewable feed-in, they demonstrate the effects of the proposed LEM for the current situation and a future scenario with additional load through electric vehicles and heat pumps. The results show that, compared to a business as usual case, the LEM can provide both peak-shaving of PV feed-in during midday and a significant reduction of evening demand peaks of up to 23%.