Local markets and Flex markets

  Trade flows of decentralized power generation and consumption Copyright: © IAEW

The integration of distributed energy generation and the electrification of heat as well as mobility demand require innovative coordination concepts at the local level. Local energy markets (LEM) and local flexibility markets (LFM) offer the possibility of market-based implementation of this coordination task. While LEM strengthen the position of consumers and prosumers by providing them with the opportunity to trade among each other, the concept of LFM enables the market-based participation of decentralized flexibility in grid congestion management in both distribution and transmission networks.

In this context, the IAEW examines the design options and the repercussions of the comprehensive integration of LEM and LFM. For the evaluation of the different design options, a decentralized operational planning procedure based on a bottom-up modelling of the market participants, the multimodal technology portfolio, the energy price components and the distribution grid infrastructure is used. In addition, the system analysis toolchain offers the possibility to investigate the systemic impact of local market structures of both LEM and LFM on the European electricity market and the European transmission grid.