Integrating third-party flexibility resources into distribution networks: a quantitative assessment on the interactions of network tariffs and local markets

Abstract

This paper explores innovative approaches to enhance the use of flexibility for electrical distribution networks by integrating time-of-use tariffs and local markets for DSO services. The study presents an analysis through a case study of three distinct scenarios. The first scenario examines the impact of the simultaneous operation of heat pump and electric vehicle loads, leading to significant congestion issues within the network. It highlights the challenges posed by the increasing presence of flexible loads without any pricing signals to guide their operation. In the second scenario, price signals based on time block and contracted capacity charges are introduced, demonstrating how these signals can effectively alleviate network congestion but could shift problems to other hours. The third scenario combines the benefits of tariffs with a local market, resulting in the most significant reduction in grid congestion. Consequently, the outcomes of the current analysis could support regulators and policymakers in designing efficient acquisition mechanisms tailored to the characteristics of the context to which they apply.