Making Flexibility Pay: An Emerging Challenge in European Power Market Design

15 August 2016
Richard Druce, et al.

“Flexibility” is crucial for ensuring efficiency in decarbonized power systems, so should be recognized as more than an “ancillary” service.

Defining power system flexibility as the ability of the system to adjust rapidly to changing conditions, such as shocks to demand or supply, this paper highlights the need for power market design to keep pace with the radical transformations taking place in European power systems as a result of the rapid growth of less flexible, low carbon generation technologies such as wind, solar and nuclear.  NERA Associate Director, Richard Druce and his team of consultants argue that flexibility will therefore need to be a core focus of power market arrangements and no longer ancillary to the markets for energy and capacity.