The value of distributed flexibility for reducing generation and network reinforcement costs

This paper studies the costs and benefits of distributed flexibility for the 2030's electric system for generation and the reinforcement of the distribution network. Two key results emerge from this work based on real-world microdata for flexibility resources and network description and assessed with a detailed unit commitment model. First, the economic benefits of local flexibility resources to minimize generation costs are substantial but counterbalanced by high investments in distribution grids whenever a short-term signal for flexibility control is used. Second, these benefits increase with filtering, the technical limitation by the network operator of bids to avoid congestion. •Distributed flexibility decreases the generation costs of the electricity system.•Distributed flexibility can be activated with a short-term or a tariff signal.•Network reinforcements are costlier for a short-term signal than for a tariff one.•Thus the global value of flexibility is lower for a simple short-term signal.•Filtering increases this value by reducing the network reinforcement costs.