Market design of regional flexibility markets: A classification metric for flexibility products and its application to German prototypical flexibility markets

Erik Heilmann (), Nikolai Klempp and Heike Wetzel
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Erik Heilmann: University of Kassel
Nikolai Klempp: University of Stuttgart

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: With a growing number of distributed energy resources, the electricity network is challenged with a higher quantity of technical problems such as capacity congestions and over- or under-voltages. One often-discussed approach to solve these problems, especially in the European zonal electricity system, is regional fl exibility markets. We provide a novel metric for the design of flexibility products by combining technical requirements with a background in auction theory. This is a valuable contribution to the discussion of regional flexibility markets, which currently occurs on a largely technical or conceptual level. The metric structures 23 product parameters in four stages of different abstraction levels. By applying this metric to five fl exibility market approaches used in current German research projects, we demonstrate its usability for consistent description and comparison of flexibility products. Therefore, the metric we have developed, is a powerful instrument for structured analysis and assessment of the vast diversity of approaches to fl exibility markets and products at a high level of detail. This metric can empower national and international policy makers and practitioners in developing and assessing flexibility markets holistically and can help to simplify the implementation of best-practice solutions.

Keywords: smart markets; market design; electricity product design; fl exibility market (search for similar items in EconPapers)
JEL-codes: D47 L94 Q41 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2020
New Economics Papers: this item is included in nep-ene, nep-ore and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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