Evaluation of Market Designs for Local Energy Markets to Support the Distribution Grid

The transformation of the energy system leads to an increased demand for ancillary services (AS) in the distribution grid. It is expected that local coordination of AS can be solved more efficiently by local energy markets (LEMs) than by pure grid measures due to competition, heterogeneity, and differentiation. In this paper, an evaluation of the LEM design for the provision of AS is conducted based on a two-stage literature analysis. Therefore, this paper contributes to a taxonomy of the two components that is conceptually and empirically grounded. In the analysis, a high degree of similarity can be observed regarding market participants and AS. However, concerning the AS approach, LEMs can be divided into two classes: flexibility markets and capacity allocation markets, each of which has different applications.