A new strategic overcome of the challenges inherent to the role of the aggregator in the Italian balancing market

Abstract: The European Union is currently driving forward the development of an energy model that is more reliant on renewable supply. Indeed, recent European Commission figures estimate a renewable penetration of 50% by 2030. As well as a shift towards renewables, our reliance on electricity is also set to dramatically increase in coming years, largely due to the inevitable electrification of vehicles and heating/cooling systems. Further to this, daily lives becoming less regimented and predictable is making energy use patterns more irregular. All of these factors are increasing the need for greater flexibility from our energy model so as to balance demand and supply. Improved flexibility and demand side management are crucial for the European Union so that it can meet its decarbonisation goals. Furthermore, taking into consideration the continued decommissioning of fossilbased power sources across the region, flexibility will need to take new forms. This is also growing demand for both companies and households to shift from being consumers to prosumers through the localised integration of renewable energy resources. A higher number of prosumers equates to higher flexibility and this could have significant impact of supporting grid stability. For prosumers to access flexibility markets, and in turn, support the decarbonisation of our energy system, there is need for a new player in the energy value chain – the aggregator. The aggregator should be the force that connects prosumers with transmission system operators, distribution system operators, and balance responsible parties (BRP). The role of aggregator can be done by pre-existent market stakeholders (e.g. suppliers). Both regulators and industry bodies agree that demand-side management and response will become of increasing importance as the energy system develops in coming years and aggregators will be fundamental for this transition. With Resolution 300/2017, Italy has defined the criteria to allow demand, “relevant production units” from non-programmable renewable sources, “non relevant units” (i.e. distributed generation), as well as accumulation systems to participate in the flexibility market. To date, 24 subjects have decided to take part as aggregators in the balancing market. If the interest of the main market operators in the aggregation of flexibility resources is evident, the need for an adjustment of the regulatory framework that, overcoming the barriers and obstacles currently existing, can encourage a greater participation is equally clear. Despite this, there remains to be much debate over how aggregation should best be implemented, and what regulatory framework needs to be put in place so that it can effectively support flexibility markets. Various aggregator implementation methods have already been proposed internationally. However, for a truly robust, integrated, and clear flexibility market, there is still need for more clarity on its roles and processes.