Local Flexibility Markets and Business Models

Current energy systems are experiencing a transformation led by incentives to reduce greenhouse gas emissions and increase the share of renewable energy sources (RES). This way, the integration of RES into energy systems is one of core issues. However, only depending on grid investments to deal with increasing loads and integration of RES is not the way to tackle this issue, because it would be too costly. Flexibility is defined as the change of energy generation or consumption patterns in response to a specific signal. This flexibility is then offered as a service to support actors in the energy system. Local flexibility markets are identified as platforms that coordinate and provide flexible assets. This chapter aims to provide an overview of local flexibility markets and their business models. This chapter analyzes the proposed local flexibility market designs in Europe, and discusses on their drawbacks and barriers, and how they can be improved.