Design of a Continuous Local Flexibility Market with Network Constraints

TL;DR

This paper introduces a novel continuous local flexibility market design that explicitly incorporates network constraints, aiming to improve local grid management during early market development stages.

Contribution

It presents the first design of a continuous local flexibility market considering network constraints and proposes a market clearing algorithm to address local network issues.

Findings

Market design explicitly considers network constraints.

Proposed algorithm for local flexibility market clearing.

Discussion of future research challenges.

Abstract

To the best of our knowledge, this paper proposes for the first time a design of a continuous local flexibility market that explicitly considers network constraints. Continuous markets are expected to be the most appropriate design option during the early stages of local flexibility markets, where insufficient liquidity can hinder market development. At the same time, increasingly loaded distribution systems require to explicitly consider network constraints in local flexibility market clearing in order to help resolve rather than aggravate local network problems, such as line congestion and voltage issues. This paper defines the essential design considerations, introduces the local flexibility market clearing algorithm, and -- aiming to establish a starting point for future research -- discusses design options and research challenges that emerge during this procedure which require further investigation.