CEER Paper on DSO Procedures of Procurement of Flexibility

16 July 2020

Today, CEER publishes its Paper on Distribution System Operator (DSO) Procedures of Procurement of Flexibility

The topic of flexibility is of increasing interest and importance across the entire energy value chain and CEER has published a number of papers relating to flexibility over the past years. In the electricity distribution system, procurement of flexibility by DSOs could lead to a better utilisation and development of network capacity and thereby defer or be an alternative to traditional reinforcement, where it is a cost-efficient alternative.

Furthermore, Article 32 of the Electricity Directive (2019/944) on common rules for the internal market of electricity sets new requirements on the use of flexibility in distribution networks.

This paper analyses this article and provides insights on what the implications are for incentives, prerequisites and interactions among the involved parties with DSO access to and use of flexibility. Procurement of flexibility is the key process to appropriately signal the need for flexibility and acquire the necessary resources in a cost-efficient manner. The aim of the paper is to elaborate how flexibility can be made available and how market-based procurement procedures could be arranged at the electricity distribution level.

The paper outlines how such a market-based procurement procedure could work whilst making clear that the concrete implementation remains to be decided on the national level. However, if the market-based method is deemed to not be efficient, other categories to access flexibility could be used or measures to improve the market-based approaches could be applied.

CEER recommends the following principles for all kinds of market-based flexibility procurement by DSOs: balanced incentives, adequate neutrality, technical prerequisites and an overall framework for procurement. CEER considers market-based procurement of flexibility as one very important option which could allow for a substantial benefit in the distribution grid, contributing to its further development to support as renewable, reliant and efficient an energy supply as possible.

Please read the full paper here.



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