Battery Degradation-Aware Congestion Management in Local Flexibility Markets

Recently, distribution system operators (DSO) are facing increasing congestion management challenges in their grids due to increasing electricity demand peaks. Batteries are widely assumed to be a promising technology to deal with these challenges. However, DSOs are in many countries not allowed to buy or sell electricity, but must request flexibility through a future local flexibility market (LFM). This paper proposes a LFM architecture which allows the DSO to book flexibility from aggregators who control batteries on behalf of the asset owners, and activate flexibility when needed. This problem is formulated as a two-stage stochastic optimization program where the DSO books flexibility considering the expected cost of energy not served and cost of battery degradation when activated. A sensitivity analysis with respect to the projected battery prices and different values of lost load (VoLL) are carried out. The achieved results illustrate that the batteries are nowadays at affordable prices for flexibility provision. However, the affordable battery price where no curtailment occurs, is only achievable when prices reach below 200 €/kWh, depending on VoLL.