IEEE Power & Energy Magazine - July/August 2021 - 85

Despite the constraints, preliminary results show that participation
in frequency regulation markets generally yields
revenues for an MES owner. Involvement in the intraday energy
market is less relevant due to low liquidity and insufficient
differences between the day-ahead and intraday prices in the
considered countries. Participation in congestion management
and capacity markets can be profitable. Involvement
with strategic reserve mechanisms generally prevents activity
in other markets, which considerably limits the possible revenues
from flexibility provision. The profitability of flexibility
provision largely depends on the market design and regulatory
framework. Indeed, it depends not only on the energy
prices of the different carriers (electricity, gas, and heat) but
on other charges that affect MES costs, such as network tariffs,
taxes, and fees to support renewables. For instance, network
charges of more than 30% of the electricity bill, taxes
of more than 30%, and charges to support renewable energy
sources of more than 15% can be observed. These may vary
significantly from one country to another.
Depending on their structure, network tariffs may significantly
increase the costs of the participation of MESs in certain
markets. Further, in some countries, renewable support
schemes in other energy sectors may prevent or considerably
limit the provision of flexibility to the electricity system. For
instance, some schemes impose minimum thresholds on the
production of heat from renewables. The provision of flexibility
may require increased use of technologies that are not
recognized as renewables in these schemes and may therefore
be limited or prevented. Studies show that the provision
of flexibility may increase the operational costs incurred by
an MES. This raises questions about the competitiveness
of MESs against other flexibility resources and the attractiveness
of flexibility remuneration with the structure of the
payment (for holding capacity headroom, energy delivered,
and so on), which should be sufficient to cover the additional
costs and risks incurred and to generate revenue.
Finally, there is a need for improved coordination
between the following:
1) Network operators: Greater coordination is necessary
between distribution and transmission system operators
and between electricity, gas, and heating/cooling
network operators.
2) Markets of different energy carriers: Project results
show that better coordination between the gate closure
times of the electricity and gas markets could significantly
increase the benefits of MESs.
An enhanced cross-sector approach is therefore needed
within the regulatory framework to increase the efficiency
of a truly integrated energy system and, for instance, redesign
energy prices, taxes, and incentive schemes for different
energy sectors in a coordinated way.
Acknowledgments
This project received funding from the European Union's
Horizon 2020 research and innovation program, under grant
july/august 2021
774309. This article and the results described in it reflect
only the authors' view. The European Commission and the
Innovation and Networks Executive Agency are not responsible
for any use that may be made of the information it contains.
The authors gratefully acknowledge the contributions
of Nicole Pini and Vincenzo Casamassima.
For Further Reading
European Commission, " Powering a climate-neutral economy:
An EU strategy for energy system integration, " Brussels,
Belgium, 2020. [Online]. Available: https://ec.europa.eu/energy/
sites/ener/files/energy_system_integration_strategy_.pdf
G. Chicco, S. Riaz, A. Mazza, and P. Mancarella, " Flexibility
from distributed multi-energy systems, " Proc. IEEE,
vol. 108, no. 9, pp. 1496-1517, Sept. 2020. doi: 10.1109/
JPROC.2020.2986378.
L. Cauret, R. Belhomme, P. Raux-Defossez, S. Nösperger,
J. Steinbeisser, and J. Pagán Carpe, " Flexibility provision
through enhanced synergies between electricity, gas
and heat systems: A comparative analysis of market and
regulatory frameworks in seven case study countries, " IET
Energy Syst. Integr., vol. 2, no. 2, pp. 133-143. doi: 10.1049/
iet-esi.2019.0062.
E. Corsetti, S. Riaz, M. Riello, and P. Mancarella, " Modeling
and deploying multi-energy flexibility: The energy
lattice framework, " Appl. Energy, to be published. doi:
10.1016/j.adapen.2021.100030.
S. Shariat Torbaghan et al., " Designing day-ahead multicarrier
markets for flexibility: models and clearing algorithms, "
Appl. Energy, vol. 285, p. 116, 390, Mar. 1, 2021.
doi: 10.1016/j.apenergy.2020.116390.
" Main results including public deliverables. " Magnitude.
https://www.magnitude-project.eu/results-and-publications/
main-results-including-public-deliverables/ (accessed 2021).
Biographies
Regine Belhomme is with Electricité de France, Palaiseau,
91120, France.
Edoardo Corsetti is with Ricerca sul Sistema Energetico,
Milan, 20134, Italy.
Christoph Gutschi is with cyberGRID, Wien, 1190,
Austria.
Kris Kessels is with Vlaamse Instelling voor Technologisch
Onderzoek, Genk, 3600, Belgium.
Ana Virag is with Vlaamse Instelling voor Technologisch
Onderzoek, Genk, 3600, Belgium.
Meysam Qadrdan is with Cardiff University, Cardiff
CF10 3AT, U.K.
Xiandong Xu is with Cardiff University, Cardiff CF10
3AT, U.K.
Hailong Li is with Mälardalens Högskola, 722 20
Västerås, Sweden.
Jakub Jurasz is with Mälardalens Högskola, 722 20
Västerås, Sweden.
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https://ec.europa.eu/energy/sites/ener/files/energy_system_integration_strategy_.pdf https://ec.europa.eu/energy/sites/ener/files/energy_system_integration_strategy_.pdf https://www.magnitude-project.eu/results-and-publications/main-results-including-public-deliverables/ https://www.magnitude-project.eu/results-and-publications/main-results-including-public-deliverables/
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