Integrid - Bridging the Gap

67 Demand aggregation and participation in balancingmarkets: Flexibility operators that aggregate the flexibility of all types of DER to provide services to TSOs and DSOs are another central element of the InteGrid concept. However, these stakeholders face important regulatory barriers, particularly in relation to the aggregation of demand-side resources or when acting as independent aggregators. Revisit balancingmarket rules to create a level playing field for all flexibility providers: Demand-side participation in balancing markets is not allowed in many countries yet. Therefore, the first step would be to open these markets to all sources of flexibility, possibly starting with large consumers. However, this does not automatically mean that all resources can participate in electricity and service markets on a level-playing field. Market rules, originally designed for large generators, should be reviewed to remove any possible technology bias (e.g. large minimum bid sizes, symmetrical bidding). Turning to market access requirements, it is necessary to address the design of prequalification procedures. In order to facilitate the participation of aggregated demand resources, portfolio-based prequalification is recommended and should also be coordinated with DSOs, considering that they will also procure demand side flexibility. Finally, regulation should define a transparent baseline methodology to enable the participation of demand in balancing markets and provide the TSOwith means to verify activation. The specific approach should be selected considering criteria related to ease of validation, accuracy, data intensiveness and gaming potential. Facilitating the development of aggregators: Aggregation will play a fundamental role in enabling DER participation in all flexibility services. There are three key roles to consider in this discussion: the aggregator, the supplier and the Balancing Responsible Party (BRP). When these roles are performed by different entities, conflicts may arise, such as when an independent aggregator aggregates resources from the portfolio of several different suppliers. In such a situation, the supplier would be impacted by the actions of the independent aggregator as this can leave suppliers with energy imbalances and over or under procurement in energy markets. In order to avoid these problems, regulation should define a methodology to settle imbalances and adjust financial positions among aggregators and BRPs/suppliers caused by flexibility activations. DER aggregation may serve to provide services both to TSOs and DSOs, as demonstrated by the VPP in InteGrid. This requires coordination between both grid operators to mitigate the risk for the aggregator of being activated by one operator and be unable to comply with this commitment due to limitations set by the other grid operator. Balancing market rules for DER participation - Largeminimumbid sizes and symmetrical bidding shouldbe avoided - Portfolio-basedprequalification can facilitateDERparticipation. CoordinationwithDSOs is alsodesirable - A transparent baselinemethodologymust be in place Facilitating the development of aggregators - Amethodology to settle imbalances and adjust financial positions is needed - Enhanced TSO-DSO coordination is needed to ensure seamless operation of VPPs - Aggregators should be allowed to aggregate different types of DER An additional recommendation to facilitate the VPP operator to benefit from economies of scale is to allow the VPP to aggregate different types of DER under the same portfolio, particularly when unit sizes would