Flexibility markets serve a concrete purpose: at a visionary level, in our drive towards meeting our Net Zero targets, but also on a functional level. Energy flexibility can help solve the day-to-day challenges of network utilities and flexibility providers alike – from irregular demand and energy generation to the rapidly growing number of distributed energy resources (DERs) that need to connect to the grid.
Read more about flexibility markets and why we need them
For system operators or network utilities, flex market platforms can provide benefits in the face of challenges when procuring flex services. Here’s a breakdown of those challenges – and how flex market platforms help.
The flex challenges for network utilities
1. Knowing which providers to ask for flex services
System operators have many flexibility providers to choose from. Historically, system operators or network utilities contract with each provider individually, through programmes and arrangements to buy various flexibility services.
The ability of different asset types to respond to different system needs depends on the attributes of that asset. This mainly relates to technology type, and includes parameters such as ramp rate, response time, and connection level.
2. Managing when to ask those providers for their services
The individual programmes contracted run at differing times as they access diverse types of flex across various connection levels. Again, coordinating and managing these different demands becomes complicated.
3. Potentially losing knowledge when embedded in a single expert within the organisation
As in any business function, gatekeeping knowledge behind a single expert can lead to operational risk. That person could leave a role or company and that knowledge could be lost.
If flex procurement is managed by a single role – or even set up through processes or software not designed to support this function in the most efficient way – the full value of flexibility won’t be realised.
How flexibility market platforms resolve those challenges
1. A digital platform can coordinate multiple flex markets and market products
Multi-market flexibility platforms – like ElectronConnect – can help system operators or network utilities call on several types of flex across multiple providers and asset technologies.
Those providers all offer their flex services into the market and those submissions into the market can be assessed easily. This removes the restrictions of individual programmes or contracts. That means that network utilities get more choice around where and when the flexibility services can be procured.
2. A market platform can manage market timings more efficiently
A system operator or network utility will have different timing needs for their flexibility markets e.g day-ahead, week-ahead, or continuous.
A market platform can run and coordinate those markets simultaneously.
This gives the buyer of flexibility full control over when, where, and who they are procuring flexibility from.
3. The system can build up and retain knowledge over time
The market platform can capture relevant data processes and market design over time. This avoids depending on a person’s intrinsic knowledge, or multiple, disconnected ad hoc systems.
Operational risk is therefore reduced, which helps create a better end-to-end workflow over time – dedicated to creating the most efficient markets.
Integrating network systems will make sure that all markets are informed by the latest forecasts and price signals, so every decision is as advantageous to all parties as possible.
Our work on BiTraDER is a small part in creating a new blueprint for managing those data exchanges. It aims to create better data flows through the DNO control room to providers and platforms – and back again.
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Essentially, all these benefits mean that a digital flexibility platform can do the heavy lifting to offer low-touch, day-to-day operations for flexibility teams.
Those flexibility teams get more control, with more visibility, better insights to inform decisions based on past performance, and an easy interface.
For a more in depth look at how best to deploy flex platforms, read our blog on the role of a digital infrastructure for neutral flexibility marketplaces.
So those are the benefits of flexibility market platforms on the side of the system operators. But flex markets rely on the participation of flex providers to ensure the right volume of flex is available for the utilities to request.
There are certain barriers to entry for flexibility providers currently that flexibility market platforms can help resolve. We address that in a second blog in this two-part series.
