In this paper, we investigate two main schemes for contracting demand-side flexibility by the Distribution System Operator (DSO) at the planning stage: a voluntary demand-side connection agreement where consumers offer their flexibility, i.e., load reduction, to the DSO and a mandatory demand-side connection agreement where the DSO sets the flexibility levels, i.e., load curtailment, to be contracted from residential consumers. A different bilevel equilibrium model is used for each demand connection agreement scheme. In both models, the DSO, in the Upper Level, decides on the flexibility price and network tariffs. Residential consumers react to those signals in the Lower Level. They can be prosumers that invest in solar PV and batteries or passive consumers. The paper answers two regulatory issues. The first is which option to choose for regulators between mandatory and voluntary demand connection agreements. We find that mandatory demand-side connection agreements result in higher welfare gains compared to voluntary ones and a lower price for flexibility. However, such agreements may entail some implementation issues for regulators and different curtailment levels among consumers. This connects with the second issue investigated in this paper on how to implement mandatory demand connection agreements from equity and feasibility perspectives. When introducing a pro-rata constrained mandatory scheme, curtailing consumers equally, we find that welfare levels are still higher than under the voluntary scheme but lower than in the unconstrained mandatory scheme. The difference in welfare and flexibility levels between the two mandatory schemes could represent a potential for a secondary flexibility mechanism, where consumers trade flexibility between themselves.
The EU ETS with companion policies is more robust than relying solely on either regulatory or carbon-pricing interventions. Policies should be developed to account for the disparate impacts of the [...]
Customers are expected to play a fundamental role in the transition to a decarbonised and digitalised energy system. However, experience so far suggests that customer engagement in energy markets cannot [...]
This deliverable, which is part of the Horizon 2020 OneNet project, outlines the alignment activities carried out in OneNet Task 3.4, focusing on integrating the proposed electricity market concepts with [...]
Flexibility involves the adjustment of energy consumption or generation schedules to benefit the grid, for instance, providing services such as balancing, congestion management, and voltage control. Flexibility can be offered [...]