As a market platform for trading decentralized flexibility, NODES has carefully followed the development of the network code for Demand Response, and will participate in the open consultation currently being conducted by ENTSO-E and the EU DSO Entity. While we appreciate the work being done by the drafting team, we have identified several concerns that need to be addressed for an effective network code, including:
- Too many “maybe” and too few “shall”: the draft is too open and allows for both very varying implementations at Member State level, including an implementation that may hinder, not help, the unlocking of the full flexibility potential in demand response.
- Market-based procurement of local flexibility is already the default method in the Electricity Market Directive and Regulation. This principle should be strengthened, not weakened through a network code. In particular non market-based mechanisms such as non-firm connection agreements should only be considered a second best and certainly not an equivalent mechanism, as it does not allow for activating flexibility with the lowest cost. Also, non-market based re-dispatching should be strictly limited.
- The role and responsibilities of system operators in the setting up of local flexibility markets must be recognized. Indeed, these markets cannot be expected to appear without system operators, as the only buyers in a monopsony, display their needs regarding volumes, products, localization and procurement process/platform.
NODES will provide suggestions to the drafting team on how to address the previous. Hopefully, the final network code will integrate these necessary changes, to ensure that we can address the challenges facing the electricity system, through clean, efficient, and affordable technologies like demand response. NODES will continue to be involved, and as a directly affected stakeholder, we are looking forward to further cooperation with ENTSO-E and EU DSO Entity through our activity at smartEn – Smart Energy Europe, and its participation in the Drafting Committee of the network code.