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

• Published in: Applied energy 2022-11, Vol.325, p.119913, Article 119913
• Main Authors: Schmitt, Carlo, Schumann, Klemens, Kollenda, Katharina, Blank, Andreas, Rebenaque, Olivier, Dronne, Théo, Martin, Arnault, Vassilopoulos, Philippe, Roques, Fabien, Moser, Albert
• Format: Article
• Language: English
• Subjects: Day-ahead market; Energy system modeling; Local energy market; Transmission grid
• ISSN: 0306-2619; 1872-9118
• DOI: 10.1016/j.apenergy.2022.119913

The energy system decarbonization leads to a decentralization of generation and flexibility. Among the new concepts to integrate 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 as well as the 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 for local trading. Nonetheless, local energy markets can be used as an incentive for the 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. •Bottom-up modeling of distributed flexibility in France and Germany.•Large-Scale-Modeling of LEMs.•Impact Assessment on Day-ahead market and transmission grid.