Local energy markets (LEMs) most be future-proof and consider both current and future policy and regulatory arrangements, the Energy Systems Catapult (ESC) has said.
On 1 October, it published its report, The policy and regulatory context for Local Energy Markets – commissioned by the Energy Revolution Integration Service (ERIS) programme – in which it examined how various regulatory and market changes could impact ongoing trials and future large-scale LEM projects. It noted that LEMs were emerging as a solution to coordinating an increasingly complex system of decentralised, distributed generation assets but stressed ongoing reforms will likely impact their implementation and success.
While changes, including the transition of DNOs to DSOs and market-wide half-hourly settlement reform, stand to have a positive impact for LEMs, the report outlined key considerations for stakeholders entering the local energy market space.
Looking ahead, all LEM projects should take into account interoperability with future distribution and electricity system operator platforms and other markets; consumer protection mechanisms within the LEM; cyber security, data privacy and data protection risk mitigation and management; and consider balancing and settlement processes within LEMS as well as how they would interact with system-wide processes and requirements.
The report also stressed managing conflicts in market demands and signals as an important consideration, while thought must also be given to the impacts of the smart meter roll-out and the effect of future network charges and access arrangements.