A Comparative Study of Coordination Schemes Between Local and Wholesale Electricity Markets

The structure of traditional energy markets appears ill-suited to future energy scenarios, which foresee a significant increase in the deployment of Distributed Energy Resources (DERs) and an increase in electricity demand from end users. In this context, Local Electricity Markets (LEMs) have gained considerable attention as a viable framework for local electricity trading, allowing both consumers and prosumers to optimise their energy exchanges. However, studies on LEMs do not provide a clear regulatory framework defining their interactions with the Wholesale Electricity Market (WEM). The objective of the proposed study is to carry out a comparative analysis of different strategies to integrate LEMs and WEM. To this end, four alternative LEM-WEM coordination schemes are proposed and simulated in order to evaluate the impact of each scheme on the profitability of DERs. A techno-economic assessment is performed using real data on energy orders in the Italian DayAhead Market.