A Business Case for Flexibility Market Operators Using Algorithms for Improved Market Efficiency

The expected high penetration of distributed energy resources (DERs) in distribution systems is already challenging distribution system operators’ (DSOs) management of their grids. Flexibility markets are a promising tool for DSOs to ensure the security and quality of supply in a cost-effective manner. However, most of the existing local flexibility market (LFM) platforms do not explicitly consider network constraints in market clearing, which could aggravate the local network problems in future scenarios. In this paper the business case for a network-aware continuous clearing algorithm for LFMs is presented through the quantitative analysis of the algorithm performance in different scenarios. The focus of the paper is on the quantitative performance of the algorithm and how it can affect the different business actors involved.