User-Centric Flexibility Aggregation for the Integrated European Balancing Markets

Unlocking the demand response potential of small electricity consumers is crucial to maintain adequate levels of flexibility in future power grids. However, small consumers cannot reach the minimum capacity requirement established by electricity markets and are blocked from participating. This paper proposes a user-centric aggregator that enables demand response providers to specify their minimum acceptable remuneration, promoting fair compensation, and reducing market discrimination. The aggregation process is formulated as an NP-hard optimization problem and solved using a tailored dynamic programming algorithm. The resulting flexibility blocks are submitted to the European platform for manual frequency restoration reserve using three bidding strategies, one of which makes use of the recently introduced complex bidding features. Among all evaluated strategies, we demonstrate that exclusive bidding is the most effective and robust strategy. In addition to surpassing simple and multiple bidding strategies, it also outperforms individual bidding in 77.34% of cases, yielding 110.94% increase in annual user acceptance levels. It is therefore recommended as the most effective approach for aggregators aiming to enhance fairness and market efficiency.