European Commission - Directorate General for Energy

02/27/2026 | Press release | Archived content

Specification and design criteria for local flexibility markets

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Specification and design criteria for local flexibility markets

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The objective of this study is to provide a unifying framework to help Member States design LFMs in a way that maximises benefits for the electricity system while placing consumers at their centre. The study proposes a design and implementation framework to enable efficient market-based procurement of flexibility at a local level while facilitating the integration of LFM with other wholesalemarkets. The study defines LFMs as markets where local services are traded, to address grid-related needs. The buyers of these services are Distribution System Operators (DSOs) and Transmission System Operators (TSOs). Local services refer to any service with a distinctly local character. In the current practice, LFMs are mostly applied in the context of congestion management and voltage control. Both markets where these local services are procured in dedicated local markets as well as through bids in other wholesale markets (day-ahead, intraday, balancing) are considered LFMs. More specifically, the study: - Analyses the design and implementation features of current LFM initiatives, as well as existing academic and policy research in this domain. - Assesses various alternative market designs and associated roles and responsibilities and identifies best practices based on adequate criteria. - Formulates key LFM success features and recommendations to assist Member States in their implementation efforts. Particular attention is paid to the level of harmonisation of products and markets for local services. While harmonisation can reduce market entry barriers, improve liquidity, and enhance value stacking, excessive harmonisation could lead to designs that are not fit for purpose in specific local contexts
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ISBN 978-92-68-37424-5
DOI 10.2833/2136920
Catalogue number MJ-01-26-015-EN-N

Paper

ISBN 978-92-68-37425-2
DOI 10.2833/6545239
Catalogue number MJ-01-26-015-EN-C
PDF
ISSN ISBN 978-92-68-37424-5 DOI 10.2833/2136920 Catalogue number MJ-01-26-015-EN-N
Paper
ISSN ISBN 978-92-68-37425-2 DOI 10.2833/6545239 Catalogue number MJ-01-26-015-EN-C
  • Released on EU publications website: 2026-02-27
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European Commission - Directorate General for Energy published this content on February 27, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on March 02, 2026 at 10:13 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]