Challenges for large-scale Local Electricity Market implementation reviewed from the stakeholder perspective

Sjoerd C. Doumen (Corresponding author), Phuong Nguyen, Koen Kok

Research output: Contribution to journalReview articlepeer-review

16 Citations (Scopus)
312 Downloads (Pure)

Abstract

Research simulations and real-life pilots tested many different Local Electricity Market (LEM) applications and methods and have demonstrated that LEMs can solve problems in the distribution grid caused by the energy transition while allowing broader market participation. Significant progress on LEM development has been made, but challenges could nonetheless exist between LEM research and large-scale implementation. Simulations and pilots occur in controlled environments and can, therefore, ignore LEM stakeholder requirements, making it likely that there are still challenges between LEM research and large-scale implementation. It is, therefore, essential to look at challenges between LEM research and implementation from the stakeholder's perspective while considering all requirements. This study aims to find the existing challenges between LEM research and large-scale implementation by first determining the stakeholders of LEMs and their requirements for LEM implementation. Next, using these requirements to find state-of-the-art literature on LEMs to create an overview of these studies. Finally, to find existing challenges between LEM research and implementation, the LEMs in the overview are analyzed and compared to the stakeholder requirements and power system and market aspects four separate times. The necessity of using a local energy market framework with a clearly defined market system, the lack of clear responsibilities for and fairness of subsequent settlement of deviations, the absence of consideration for data privacy and the reduced LEM effectiveness due to human decisions were determined to be challenges that currently stand between LEM research and large-scale LEM implementation.

Original languageEnglish
Article number112569
Number of pages13
JournalRenewable and Sustainable Energy Reviews
Volume165
DOIs
Publication statusPublished - Sept 2022

Bibliographical note

Publisher Copyright:
© 2022 The Authors

Funding

The authors would like to thank the Dutch Research Council’s (NWO) research program Complexity–Programmable Self-organization for funding this study, which is part of the Self-organizing Marketplace to realize a Self-Organized Sustainable Power System (AGILE) project. This document is the results of the Self-organizing Marketplace to realize a Self-Organized Sustainable Power System (AGILE) project funded by the Dutch Research Council (NWO), Netherlands . This document is the results of the Self-organizing Marketplace to realize a Self-Organized Sustainable Power System (AGILE) project funded by the Dutch Research Council (NWO), Netherlands.The authors would like to thank the Dutch Research Council's (NWO) research program Complexity–Programmable Self-organization for funding this study, which is part of the Self-organizing Marketplace to realize a Self-Organized Sustainable Power System (AGILE) project.

Keywords

  • Baselining
  • Data privacy
  • Deviation
  • Framework
  • Human decisions
  • Local Electricity Market
  • Market effectiveness
  • Market system
  • Stakeholder

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