Participation of Electric Vehicle Fleets in Local Flexibility Tenders: Analyzing Barriers to Entry and Workable Solutions

Abstract

Distribution system operators (DSO) are starting to implement market-based mechanisms to use the flexibility offered by distributed energy resources (DER) such as electric vehicles (EV). Several European countries are trialing a range of real-life tests and market designs, and local flexibility tenders that allow DSOs to procure medium- to long-term flexibility have found early success. Here we set out to: i) identify the remaining barriers to entry for DER aggregators in these new flexibility schemes, and ii) quantify the participation of EV fleets in long-term flexibility tenders. We built a model to evaluate the potential EV aggregator gains on local flexibility tenders considering market rules, definitions of flexibility product, and different EV fleet compositions. Our model shows that the main parameters affecting EV fleet aggregator participation and remuneration are bidirectional capability (V2G), fleet reliability, and the right match-up between availability profiles and tender requirements. In best-case scenarios, EV fleet aggregators can expect revenues of over €1400/EV/year providing services for only a few hours or months per year. The paper concludes with policy recommendations based on best practices to boost DER participation in local flexibility markets.