How will Local Energy Markets influence the pan-European Day-ahead
Market and Transmission Systems? A Case Study for Local Markets in
France and Germany
Abstract
The energy system decarbonization leads to a decentralization of
generation and flexibility. Among the new concepts to integrate the
distributed flexibility are local energy markets. While a broad range of
research investigates local energy markets on a distribution grid level
in detail, research on their system impact has been limited. Therefore,
we develop a framework to investigate different configurations of local
markets and operation of distributed energy resources and their
interaction with the wholesale markets. This framework is applied to a
pan-European case study with detailed bottom-up modeling of local energy
markets in France and Germany. Additionally, transmission grid
simulations are carried out to investigate the impact of local trading
on grid congestions. Our results show that a direct coordination of
distributed flexibility within the wholesale market is more efficient
than a preference of local trading. Nonetheless, local energy markets
can be used as an incentive for expansion of distributed flexibility as
well as a way to break down the complexity of coordinating millions of
distributed assets in a single market. Additionally, our results show
that local trading relieves the transmission grid.