Business cases of aggregated flexibilities in multiple electricity markets in a European market design

Abstract Distributed flexible energy consumption, production and storage technologies are an option to increase the flexibility of electricity systems and foster the integration of variable renewable energy sources. Aggregation business models, providing residential customers access to different electricity markets, can activate and utilize this untapped flexibility potential. However, economic feasibility for both aggregator and customers is a prerequisite for the adoption of these business models. In a European electricity market design with sequential markets, participation on multiple markets is supposed to further increase the economic benefits of aggregated demand response. In this work, a modular and extensible operational optimization and simulation framework based on mixed interger linear programming is developed to investigate different business models for aggregation of residential flexibility options on multiple markets. Simulation results of a specific case study show that considering day-ahead, balancing and intraday markets with adequate risk management in the optimization can significantly improve economic benefits compared to single-market optimization. Battery storages contribute most to these benefits. Business models on multiple markets are complex in terms of business model design and optimization, but they are economical for both aggregator and customers. Moreover they provide additional flexibility options to electricity systems. Thus, barriers for their implementation should be mitigated.