Distribution-Level Flexibility Provision through Simultaneous Ascending Auctions

Abstract

A distribution-level Local Flexibility Mechanism (LFM) is proposed that accompanies distribution network charges consisting of two components: a peak coincidence network charge (PCNC) and fixed charge. The PCNC is a forward-looking charge that considers the cost of future network reinforcements required and is allocated to customers according to their contribution during network peak hours. LFM aims to utilize customers’ flexibility efficiently while allowing them to hedge against high PCNC. LFM is based on simultaneous ascending auctions, through which customers book their network capacity during critical hours in advance. The framework along with a case study are presented to illustrate the operation of LFM.