How to Procure Flexibility Services within the Electricity Distribution System: Lessons from an International Review of Innovation Projects

Abstract

The aim of this paper is to analyse and evaluate the deployment of smart platforms (operated by distribution system operators—DSOs—or by independent parties) in key jurisdictions that facilitate the trading of flexibility services—primarily by DSOs. We look at key innovation projects/initiatives from seven jurisdictions, including Australia, France, Germany, Great Britain, Japan, The Netherlands and Norway. We have deliberately selected 13 use cases that operate under different regulatory frameworks and market rules, and have been recently implemented (from 2017 onwards). With the selection of key use cases this study seeks to discuss the different smart architecture solutions and main capabilities across different demonstrators and their relationship to business as usual. It also analyses flexibility market designs, identifies main characteristics, and compares different price formation schemes and procurement methods. The value of flexibility for DSOs is also discussed.