Case Study Details - Future of Power Systems

Local flexibility markets enable distribution system operators (DSOs) to procure targeted flexibility services from distributed energy resources (DERs) such as demand response, battery storage, EV charging, smart appliances and other controllable loads. Instead of relying exclusively on costly and slow grid reinforcement, DSOs can activate flexible capacity during peak demand, local congestion or planned outages to maintain reliability at specific network locations.

Modern flexibility platforms combine grid-edge telemetry, short-term forecasting tools and distributed energy resource management systems (DERMS) to identify node-level constraints, anticipate overloads and calculate the flexibility required to avoid them. They typically operate with defined temporal and locational granularity, using day-ahead or intraday tenders and short-duration activation windows. Prequalification rules ensure that assets can respond within required timeframes, while baselining and metering methodologies enable accurate settlement. By coordinating flexible assets across households, commercial sites, aggregators and storage providers, local flexibility markets can increase local hosting capacity for renewables, reduce curtailment, defer some infrastructure upgrades and strengthen distribution-level resilience as electrification progresses.

Main outcomes of the solution

Reliability & Flexibility: Delivers rapid, location-specific flexibility to alleviate congestion, prevent overloads and stabilize the grid during peak demand, planned outages or unexpected disturbances.
Affordability: Helps avoid or defer selected reinforcement projects by leveraging distributed flexible assets, while creating market-based revenue opportunities for consumers and aggregators.
System Resilience: Expands operational options to manage contingencies and variable renewable output, strengthening distribution-level resilience as electrification and weather-related stresses intensify.

Key deployment and scaling factors

Deploy advanced forecasting models and DERMS to predict where and when congestion will occur and to identify the nodes where flexibility delivers the highest system value.
Establish clear tender processes, activation protocols and compensation mechanisms so participants understand how flexibility is procured, dispatched and settled.
Engage aggregators, households, commercial sites and industrial customers to build a diversified portfolio of flexible assets capable of reliably delivering services across multiple use cases.
Implement standardized, interoperable platforms that integrate with existing DSO systems (SCADA, OMS, AMI, DERMS) to enable scaling across regions and operators.
Develop regulatory frameworks that allow DSOs to procure flexibility as a recognized and cost-effective alternative to traditional reinforcement, ensuring cost recovery and long-term market viability.
Ensure high-quality, locationally granular data and validation processes to improve forecasting accuracy and dispatch reliability.

Case Studies

Areti and Siemens (2023), Italy

Areti, Rome’s distribution system operator, launched RomeFlex to manage local grid stress and defer costly network upgrades. The platform uses Siemens’ Grid-DERMS to identify congestion and outage risks hours or days in advance and calculate the flexibility required to avoid them. Residential, commercial and industrial consumers can participate via flexible assets, 55% of which come from the residential sector. Aggregators and Balance Service Providers (BSPs) submit offers through scheduled tenders, and selected participants are activated by the DSO to help stabilize the grid and receive financial compensation.

RomeFlex currently has 13 participating aggregators and around 450 flexible assets enrolled, spanning residential and commercial sites. The initiative is supported by Italy’s national energy authority and is built on an open architecture that can be replicated in other jurisdictions. According to project documentation, the use of local flexibility has helped avoid approximately €450 million in planned grid reinforcement expenditure by addressing local constraints through flexibility rather than infrastructure upgrades.[1,2,3]

GOPACS Local Flexibility Market Platform (2018), Netherlands

GOPACS is a Dutch congestion-management and flexibility coordination platform used by the country’s grid operators to procure flexible capacity from consumers, producers and flexibility service providers. It is a joint initiative of Dutch grid operators and is designed to coordinate solutions to grid congestion while providing transparent insight into the congestion market. GOPACS is not itself a trading platform; grid operators use it in connection with energy trading platforms such as ETPA and EPEX SPOT.

The platform supports coordination between Dutch DSOs and the TSO by helping ensure that flexibility activated to resolve congestion in one part of the grid does not create congestion elsewhere. It uses procurement channels linked to established market platforms and supports prequalification, bid selection, activation and verification. This makes GOPACS a practical example of TSO-DSO and DSO-DSO coordination for distributed flexibility.

GOPACS supports congestion-management products including redispatch bids and capacity limitation contracts. The platform shows how local flexibility markets can turn distributed flexibility into an operational congestion-management tool while creating a common coordination layer between grid operators and flexibility providers. [4],[5],[6]

Great Britain Electricity Distribution Network Operators (2024), Great Britain

Great Britain has developed distribution-level flexibility markets in which electricity distribution network operators procure services from flexible demand, storage, generation and other distributed resources to manage local network constraints. Distribution operators identify where and when flexibility is required and contract participating resources to adjust electricity consumption or generation when called upon, providing an alternative or complement to network reinforcement.

In 2024, a record 9 GW of flexibility capacity was contracted and 22 GWh of services were dispatched, around three times the previous year's utilization. According to the International Energy Agency, based on Energy Networks Association data, these services delivered approximately USD 383 million in bill-payer savings.

The market is continuing to evolve toward greater standardization and coordination. Ofgem appointed Elexon as the market facilitator to coordinate local and national flexibility market arrangements and reduce barriers to participation, alongside work to develop common digital infrastructure for flexibility asset registration. [7]

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