Decoding design characteristics of local flexibility markets for congestion management with a multi-layered taxonomy

Abstract

Local flexibility markets are becoming increasingly popular smart grid solutions. They connect customers who require flexible electricity supply and demand with local flexibility providers. However, the growing number of diverse solutions has led to a proliferation of concepts, projects, and companies in this market, with this diversity making understanding and comparison difficult. To tackle this challenge, we propose a multi-layered taxonomy of local flexibility market solutions. This focuses on congestion management on the distribution side of this activity; a crucial service for distribution system operators. Our taxonomy utilizes the Smart Grid Architecture Model to describe these markets comprehensively. We employ an iterative taxonomy-building method, refining and evaluating it through insights from ongoing implementations and twenty-eight expert interviews. Moreover, we present a complete instantiation of our taxonomy and offer a discussion with practical recommendations for practitioners in the local flexibility market landscape.