Fear of gaming should not be a barrier for market based redispatch in the distribution grid!

Implementing EU’s Clean Energy Package in Germany has caused debate!

The concerns about market-based redispatch and the inherent risk of inc-dec bidding cannot be ignored. NODES has asked DNV GL to look into the issue. The result is a paper that can be downloaded from our website. The paper looks into the roles of the different market participants (market operator, DSO, flexibility providers) and possible mitigation measures that efficiently could reduce this risk. The paper takes into account demand side participation and how the incentives for engaging in inc-dec bidding differs between supply and demand, in addition to looking at key differences between distribution and transmission networks when discussing market-based redispatch and the assumptions for successful inc-dec bidding. In conclusion this paper seeks to move the discussion on risks of market-based redispatch in the distribution network a step forward, by adding an analysis of possible mitigation measures. The challenge will be to implement sufficient mitigation measures to prevent inc-dec bidding, but not so much or so strict that the business case for the flexibility provider disappear. The final recommendation is to continue the work for developing flexibility markets through pilots and thus help network operators find alternatives to traditional network measures.

Market-based redispatch – Why it works!
Download the DNV-GL paper