Drivers and barriers to participation in Sweden's local flexibility markets for electricity

J. Palm, A.-R. Kojonsaari, I. Öhrlund, N. Fowler and C. Bartusch

Utilities Policy, 2023, vol. 82, issue C

Abstract: Local flexibility markets (LFM) for electricity are in their early stages, and most research has focused on their design aspects and aggregators, while little attention has been paid to providers and potential providers of flexibility resources. The present research aims to fill this gap by analysing data from 25 in-depth interviews with enrolled and potential flexibility service providers of two LFMs in Sweden. The primary goal of the analysis is to identify the drivers and barriers to participating in and providing flexibility to LFMs that are influencing these actors. Our findings show that monetary incentives were not as important as expected. The main drivers were as follows: an aggregator acting as a mediator between the buyer and the provider; a champion with personal engagement in the organisation; a wish to be a part of resolving congestion in the electricity grid; and gaining knowledge about flexibility as a resource. The main barriers identified were that LFM design was challenging to understand and that extensive knowledge about how the market functions was needed to participate. Other barriers were related to existing regulations, manual and time-consuming processes, participation not being profitable enough, perceived interference with the companies’ core businesses, and the risk of compromising customer relationships. For the future, it is essential to simplify participation, develop automation, and contribute to establishing aggregators who can support potential flexibility service providers.

Keywords: Local flexibility market; Flexibility service provider; CoordiNet; Aggregator; Driver; Barrier (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:82:y:2023:i:c:s0957178723000929

DOI: 10.1016/j.jup.2023.101580

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