Study on implementation of independent aggregators

The implementation of the independent aggregator role is on its way in the Nordic countries, and we expect that allowing for independent aggregation will help unleash the potential of demand side flexibility, distributed production, and energy storage.

NordREG has previously made the assessment (Nordic Regulatory Framework for Independent Aggregation) that in cases where a central settlement model is applied a compensation for the transfer of energy in accordance with Article 17(4) of the Electricity Markets Directive may be important in order to avoid market distortion. However, the design of the compensation mechanism is important since a too high or a too low compensation can lead to market distortion and an inefficient use of resources. The goal should be to find a level of compensation that leads to the most efficient outcome.

NordREG has commissioned a study

To learn more about how different levels of compensation may affect the independent aggregators and the suppliers NordREG has commissioned a study from Compass Lexecon. The study provides insights on how different levels of compensation may impact the independent aggregator’s prospects to participating in the different markets (DA-, ID- and balancing markets) and also how the level of compensation may impact the revenues of suppliers.

Consultant report – study from Compass Lexecon: Finding an adequate level of compensation for demand-side flexibility

Next step

The report gives input to the discussion on how a compensation mechanism might be organized. NordREG will continue to discuss this and other aspects related to the implementation of the independent aggregation role in the the Nordics.