Local Energy Market Designs to Relieve the Transmission Grid

Local Energy Markets (LEMs) are market platforms that implement energy sharing that was introduced by the clean energy package. Existing research often proposes a reduction of transmission network charges for local trading to increase the economical feasibility of LEMs. Reduced network tariffs should ideally come with actual stress relief in the transmission grid. To find such a design, we model LEMs integrated into the European wholesale market with two market interfaces (Maximized Self-Sufficiency and Wholesale-Market-Integration) and two network consideration schemes (Peak Power Margins (PPMs) and Nodal LEM Incentives). In a case study, we model the European wholesale market focussing on a rollout of LEMs in France and Germany. It shows that LEMs in general and PPMs in particular can reduce the maximum penetration at the point of common coupling. Further, LEMs can relieve the transmission grid even without considering the network in the market design. In general, LEMs increase self-sufficiency and the proposed network consideration schemes do not significantly reduce LEMs’ use.