Harnessing the flexibility of energy management systems: a retailer perspective

The business of electricity retailing is changing following the current evolution of the electricity system. An example of such an evolution is the increasing number of clients installing sophisticated energy management systems controlling the production or consumption of a large variety of devices as, for instance, photovoltaic panels with storage solutions. These systems, if managed properly, may provide flexibility to the electricity system to which they are connected, typically by means of an intermediary such as a retailer. Retailers could transfer such flexibility in consumption/production of electricity to the day-ahead and intraday electricity markets, trade it with other balance responsible parties, or use it to participate in the imbalance market. This paper defines an interaction model between a retailer and its clients, based on generic flexibility bids over multiple market periods. The defined interaction model relies on smart meters for registering the trades of electricity and requires no modification of the current rules and regulations of the European electricity system. The concept of flexibility is defined with respect to a baseline, which is negotiated and agreed upon between the retailer and each client.
This baseline can be modified by the client following an update mechanism, which must comply with certain security checks by the retailer in order to make sure it is not fraudulent.
Any deviations from the quarter-hourly comparison between expected and actual production/consumption are invoiced at a discounted price.