flexibility market

A new report released by Guidehouse Insight examines local flexibility markets and the enabling technologies in five major geographic regions between 2020 and 2029.

Local flexibility markets are expected to account for roughly $167.7 million of global transaction revenue in 2020 from 1,537.1MW of participating capacity, according to the report.

The forecast shows relatively robust growth by 2029 at a total of $10.0 billion in global revenue from 79.5GW of participating capacity.

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Traditionally, a transmission or distribution system operator faced with aging equipment or increased load demand would simply replace conduct poles and wires.

Today, distribution grid operators in deregulated markets are increasingly opting to deploy flexibility markets—commercial markets operating at specific points of the grid that manage access to a segment of the grid—to provide services such as real-time congestion management, peak demand reduction, outage management, and long-term capacity planning.

To date, the adoption of local flexibility markets has been focused in Europe, especially in the UK and the Netherlands.

In the US, New York leads the deployment of local flexibility markets. Elsewhere, markets are fairly nascent, with small pilot trials in Japan.

Roberto Rodriguez Labastida, senior research analyst with Guidehouse Insights, said: “Local flexibility markets are ready to become a bigger piece of distribution grid management based on the growth of distributed energy resources (DER) technology and operators’ and regulators’ willingness to try new means of infrastructure replacement that can reduce the cost of the overall system.

 “These markets are exploring creative solutions to address infrastructure needs at a lower cost with greater customer and environmental benefits.”

Learn more about the report.