Market Failures in Local Flexibility Market Proposals for Distribution Network Congestion Management

Market Failures in Local Flexibility Market Proposals for Distribution Network Congestion Management

Hennig, R.J. (TU Delft Energie and Industrie)
Tindemans, Simon H. (TU Delft Intelligent Electrical Power Grids)
De Vries, Laurens (TU Delft Energie and Industrie)

2022

The steady uptake of PV cells and high-power flexible loads such as electric vehicles (EVs) and heat pumps can lead to localized network congestion, if their power consumption or feed-in is not controlled well. One potential way that has been proposed to manage this congestion, are so-called Local Flexibility Markets. It is often argued, that these proposals are theoretically efficient, as they are market-based. However, some of these proposals may suffer from design flaws that allow market participants to obtain undue profits at the expense of the network operator. In this contribution, we discuss which kinds of market failures can occur based on theoretical reasoning and demonstrate them in a toy model. Based on this, we argue for a more careful consideration of congestion management options.

http://resolver.tudelft.nl/uuid:a4bf6019-7064-448e-b199-fbc109fd06da

https://doi.org/10.1109/EEM54602.2022.9920980

IEEE

2023-03-20

978-1-6654-0896-7

18th International Conference on the European Energy Market, EEM 2022

European Energy Markets Conference 2022, 2022-09-13 → 2022-09-15, Ljubljana, Slovenia

International Conference on the European Energy Market, EEM, 2165-4077, 2022-September

Green Open Access added to TU Delft Institutional Repository ‘You share, we take care!’ – Taverne project https://www.openaccess.nl/en/you-share-we-take-care Otherwise as indicated in the copyright section: the publisher is the copyright holder of this work and the author uses the Dutch legislation to make this work public.

Institutional Repository

conference paper

© 2022 R.J. Hennig, Simon H. Tindemans, Laurens De Vries