N-SIDE technology enables revolutionary local energy market

Grid congestion and a lack of flexibility are major obstacles to the renewable energy transition. Centrica and N-SIDE pioneered a solution to these problems that leveraged local homes and businesses and TSO-DSO coordination to provide flexibility and manage renewable loads. 

Centrica tested this concept via the Cornwall Local Energy Market (LEM) project, which was powered by an advanced market-clearing engine provided by N-SIDE. 

In this case study, we’ll provide an overview of the project, detail N-SIDE’s innovative market-based congestion management technology, and discuss the implications for the future of renewable energy. 

About the Cornwall Local Energy Market project

Beginning in 2017 and running for three years, the Cornwall Local Energy Market (LEM) project tested the viability of using local homes, businesses, and storage to provide flexibility.  

The project was spearheaded by Centrica, and also involved Western Power Distribution, National Grid ESO, Exeter University, Imperial College London, and N-SIDE. 

Cornwall was chosen as the ideal location for this proof-of-concept because the area already had high levels of renewable energy generation, and also had the potential to add more — but only if distribution could be properly managed on the existing grid infrastructure. 

The consortium hoped that if the Cornwall project succeeded, the same model could be replicated elsewhere in the UK and worldwide.

100 households and 125 businesses in Cornwall participated. At many of these sites, Centrica installed a combination of batteries, monitoring technology, and renewable energy generators. This equipment allowed these buildings to act as flexible demand, generation, and storage resources. 

To connect these homes and businesses with the DSO (Western Power Distribution) and TSO (National Grid ESO), Centrica and N-SIDE created an automated energy market. This single platform enabled the DSO and TSO to procure flexibility simultaneously and in a coordinated way. 

The new market allowed participants to use electricity for cheap or free when renewable generation was high, and get paid to reduce usage or sell electricity back to the grid when generation was low, thereby helping manage the load on the grid. 

An overview of the project from Centrica

The problem

The Cornwall LEM was the first project of its kind in the world. It required advanced technology to power the new market, and that technology was not yet available. 

For the project to be successful, the technology would need to fulfill the following criteria:

• Enable the TSO and DSO to purchase flexibility simultaneously from energy producers and consumers in a coordinated way via a common platform

• Be independent, open, competitive, and coordinated

• Enable flexibility trading from years ahead (reservation) to close to real-time (energy) on a large scale

• Enable the automatic management of trades to maximize energy savings and efficiency

• Manage many flexibility providers (hundreds of homes, businesses, and generators)

• Manage various technologies (e.g., solar, wind, combined heat and power, smart batteries)

• Take into account the DSO grid topology and constraints

• Be easy to use for homeowners, businesses, and flexibility services providers

Finally, in addition to working in Cornwall, Centrica also wanted the new technology to be part of a market framework that could be deployed at scale for future projects in other locations. 

“At N-SIDE we believe that the valorization of distributed flexibility is a key enabler of the energy transition. At the same time, it presents a lot of challenges in terms of market design, liquidity, and TSO/DSO coordination — challenges we are ready to solve.”

Olivier Devolder, Energy Director, N-SIDE

The solution

Centrica turned to N-SIDE for the deployment of a market algorithm capable of meeting all of their criteria. 

N-SIDE was chosen because of our deep experience developing extremely complex energy auction and power matching algorithms, including the European market coupling algorithm EUPHEMIA, as well as our high level of technical and business expertise related to the functioning of the power system. 

Leveraging this experience, N-SIDE provided a first-of-its-kind market clearing engine. The engine takes bids and offers and finds the optimal clearing solution for TSO and DSO needs while taking into account grid and asset constraints to maximize flexibility value. 

The market clearing engine provided by N-SIDE exceeded Centrica’s expectations. Capabilities included:

• Enabling the TSO and DSO to bid on flexibility services, which are optimally matched with offers from homes, businesses, and flexibility service providers

• Supporting auctions that run from months ahead to every 30 minutes intraday

• Protecting the distribution network by not allowing actions that lead to further congestion and validating surplus flexibility before offering it to national markets

Importantly, N-SIDE’s solution was independent, neutral, and technology-agnostic, treating each unit of flexibility equally. 

​​“Improving grid flexibility benefits everyone from generators to consumers, and these trials represent a major step forward.”

Pieter-Jan Mermans, Director of Optimisation at Centrica Business Solutions

Results

Powered by N-SIDE’s clearing engine, the Cornwall Local Energy Market project was a massive success. 

The project fulfilled its goal of demonstrating the feasibility of this innovative solution. The results proved that with the right technology, local energy markets can be a valuable tool for solving congestion issues while supporting TSO-DSO coordination in procuring flexibility services. 

Additional results include:

Looking ahead

The Cornwall LEM project ran for three years and concluded in winter 2020. However, N-SIDE continues to help DSOs and TSOs across Europe design market solutions to support their flexibility needs. 

In addition, N-SIDE’s applied technology related to the Cornwall LEM project is now powering a novel kind of system operator solution proposed by EPEX SPOT. 

Unlike other local flexibility market solutions, the EPEX SPOT solution, called LocalFlex, uses auction trading with a state-of-the-art market-clearing engine provided by N-SIDE. This enables better welfare optimization and closer TSO-DSO coordination. 

Ultimately, this technology will help accelerate the renewable energy transition worldwide.