Flex›CoordiNet

CoordiNet

A European Horizon 2020 research and demonstration project (grant 824414) focused on how Distribution System Operators (DSOs) and Transmission System Operators (TSOs) can coordinate to procure and activate grid services through demand response, storage, and small-scale generation. The project ran from 2019 to 2022 across three countries (Sweden, Greece, Spain) with eight demonstration activities. The Swedish demonstration is the primary source of documented experience for flexibility markets at distribution level in Sweden.

Swedish demonstration

The Swedish demonstration operated flexibility markets for congestion management across four areas for three consecutive winters (2019/2020, 2020/2021, 2021/2022), plus peer-to-peer markets during maintenance periods.

Consortium members:

  • Vattenfall Eldistribution AB (regional DSO, Uppland and Gotland areas)
  • E.ON Energidistribution AB (regional DSO, Skåne and Västernorrland/Jämtland)
  • Svenska kraftnät (national TSO)
  • Uppsala municipality
  • Energiforsk AB (research institute)
  • Expektra AB (commercial load forecasting)

Areas and DSO challenges:

AreaDSOGrid problemFlexibility use
Uppland (Uppsala)VattenfallTSO subscription denied since 2016; 10-year wait for grid reinforcementCongestion management market (3 winters)
SkåneE.ONTSO subscription constrained; 600 MW locked for Baltic Cable exportCongestion management market (tested processes)
GotlandVattenfall / GEABAging HVDC link; moratorium on new RES; island frequency managementCongestion management + peer-to-peer
Västernorrland/JämtlandE.ONTemporary constraints during TSO line maintenancePeer-to-peer capacity swapping

Total participation: 39 flexibility service providers; 477 MW/7 GWh registered capacity

The business use case: subscription to the TSO

All Swedish congestion management markets were driven by the subscription level (abonnemang mot överliggande nät): the annually contracted maximum power a regional DSO may draw from the TSO grid without prior notice. When Svenska kraftnät denies a subscription raise — typically because transmission reinforcement is not yet complete — the DSO must manage demand below the limit.

This creates a direct price ceiling for the local Flexibility Market:

  • If flexibility is cheaper than the temporary subscription fee (~240–280 SEK/MWh), the DSO buys flexibility routinely (Uppland model: 248 SEK/MWh average, high volumes)
  • If the TSO grants temporary subscriptions, the DSO only buys flexibility when subscription is also denied (~2,285 SEK/MWh, low volumes in Skåne)

Key outcomes and learnings

See Source - CoordiNet D4.7.2 Swedish Demonstration (2022) for full data. Key conclusions:

  • Market-based flexibility successfully managed TSO subscription constraints in Uppland
  • Availability contracts (capacity fees) are necessary — energy-only payment is insufficient to keep FSPs engaged across warm winters when activation is rare
  • Liquidity is a persistent challenge: thin markets, weather-dependence, and high energy price spikes all reduce supply reliability
  • The ten abilities framework (product design, customer engagement, DSO operations, coordination, forecasting/baseline, platform) provides a practical checklist for DSO transformation from distribution network operator (DNO) to distribution system operator (DSO)
  • The project directly inspired sthlmflex (Stockholm) and Effekthandel Väst (Gothenburg) markets; Uppland and parts of Skåne continued post-project

The SWITCH platform

The digital market platform was built in-house by E.ON Energidistribution. Named SWITCH, it consists of a market tool, flex tool (DSO operator interface), FSP interface, and P2P platform. After CoordiNet, it continued as E.ON’s platform for live flexibility markets. The flex tool was also adopted for sthlmflex (with NODES replacing the market tool component). See SWITCH for technical detail.

Market succession

Post-CoordiNet, the four demonstration areas had different fates (Source - Sweco Kartläggning av lokala flexibilitetsmarknader (Ei, 2025)):

  • Uppland (Uppsala): continued as UppFlex (Vattenfall Eldistribution), one season (V2023/24), then closed when the capacity situation changed
  • Skåne: E.ON Energidistribution launched permanent commercial flex markets (Södra Skåne, Hässleholm, Nordöstra Skåne); the 400 kV grid expansion in October 2024 (+600 MW) made the markets “much less necessary or even unnecessary” for the primary bottleneck
  • Gotland: no continuation reported
  • Västernorrland/Jämtland: no direct continuation; JämtFlex (Jämtkraft, V2023/24) used NODES for a single season

sthlmflex — a separate Stockholm market (Ellevio + Vattenfall, using NODES) — ran 4 seasons (2020/21–2023/24) and closed: warm winters + high energy prices + TSO subscription grants combined to eliminate sufficient congestion need.

Effekthandel Väst (Göteborg/Mölndal, NODES) emerged from the same period and remains active as of 2025 — the only non-E.ON flex market with sustained operation.

FSP and PFSP perspective — why organizations joined (or didn’t)

A 2023 qualitative study (Palm et al., Utilities Policy 82) interviewed 25 organizations (30 informants) invited to participate in CoordiNet Uppland and Skåne for the V2020/21 season — 12 enrolled FSPs and 13 PFSPs (potential FSPs who declined). The study provides the supply-side account of the project that the CoordiNet final report does not. (Source - Palm et al LFM Drivers and Barriers (2023))

Monetary incentives were less important than expected. Most FSPs did not join primarily for money — activation volumes were too low and too infrequent for a purely economic case. The potential for future revenue mattered more than actual payoff. The main drivers were:

  • The champion — an individual inside the organization with personal interest in energy/flexibility. Without an internal champion, most organizations would not have engaged. This was the single most frequently mentioned driver across FSPs and PFSPs alike, and had not been identified in prior LFM research.
  • Organizational goals and strategy fit — participation aligned with sustainability commitments or energy management strategies
  • Social responsibility — a genuine wish to contribute to grid stability and the common good
  • Access to an aggregator — FSPs who had an aggregator partner handling bidding, automation, and technical setup were critical; without them, FSPs could not have participated practically

The biggest barriers for PFSPs were not economic:

  • Information — difficulty understanding the market concept and, critically, explaining it internally to get organizational buy-in. One quote: “I find it difficult to explain to others.” In large multi-administration organizations (e.g., municipalities), getting all relevant divisions aligned required near-full-time dedicated staff.
  • Automation — manual bidding and activation was universally described as unworkable for long-term participation: “It must work via some control system.”
  • LFM design — day-ahead (D-1) gate closure meant real-time information between bidding and activation could not be used; short-term contracts prevented investment in enabling technology; pricing one’s own flexibility was difficult (“I have no idea what price to set”)
  • TSO market competition — TSO balancing market revenue was reported as approximately 5× higher than CoordiNet Skåne’s local market rate, creating rational diversion of capacity to national markets

Baseline as a trust problem: FSPs found baseline calculation genuinely confusing. One story circulating among participants: a sports arena turned on all its lighting to establish a high baseline and then earned money on the resulting (falsified) reduction. This damaged trust in the settlement mechanism and reinforced the information barrier. See Baseline Methods for the technical dimensions.

~15 PFSPs declined even to be interviewed, citing lack of knowledge — the information barrier was severe enough to prevent research participation itself.

Policy and regulatory legacy

CoordiNet triggered a national standardization project using IEC 62325 CIM for flexibility products — leading to Sweden’s national product catalog (first draft 2022). The project confirmed the CAPEX bias in revenue cap regulation as a real barrier (Ei is addressing this through the RP5 TOTEX reform from 2028). CoordiNet is the principal empirical reference point for Swedish and EU discussions on local flexibility market design and TSO-DSO coordination.