The impact of local electricity markets on the operation and development of the distribution networks

This paper discusses local electricity markets in relation to the operation of distribution networks. Distribution networks face several challenges, mainly related to the increasing number of generation sources and loads, such as heat pumps and electric vehicles that have been connected recently. The evolving local electricity market, where the traded commodity is not necessarily the energy itself, can have a major impact on the distribution network. Coupled with the smart grid solutions, the local electricity market can provide an alternative to costly network upgrades. An important aspect of local electricity markets is the interaction between the market and the network operator. To exchange information related to the network conditions Traffic Light System can be use. The impact of flexible devices that can participate in the local electricity market are illustrated for the case of Luče, Slovenia, where the establishment of local flexibility market, aiming to enable fair distribution of limited network capacities is under development as part of the X-FLEX project.