DSO Entity Distributed Flexibility Practices (2026)

DSO Entity Expert Group on Distributed Flexibility (EG DF) — Report on Distributed Flexibility Practices — Markets for Local Services, published February 2026, approved by the DSO Entity Board of Directors on 5 February 2026. Authored by the EG DF (30 experts from 19 EU/EEA countries). This is the DSO sector’s own knowledge-sharing position paper on local flexibility market design, reframing real-world national practices as an implementation plan for NC DR national terms and conditions (NTC) drafting teams.

Correction note (2026-09-06): this page replaces an earlier version (dated 2026-04-18) that contained fabricated content — invented country case studies (Belgium/Fluvius, Finland/FinFlex, Germany, Spain) that do not exist in this report, a mislabeled A1–A5 critical-action list, and an unfilled €X billion placeholder presented as a real figure. The report’s real country coverage, recommendations, and Sweden section are below, verified against a full text extraction of the source PDF (raw/EU-DSO-Entity-Distributed-Flexibility-Practices-2026-extracted.txt).

Board approval: 5 February 2026

Contributors: ~30 experts, ~19 countries (Alliander, UK Power Networks, E.ON Energy Networks, Göteborg Energi Nät, E-REDES, Glitre Nett, Areti, Enedis, Wiener Netze, Netze BW, Cuerva, e-Distribución, Iberdrola, UFD, among others)

Relation to regulation: Input to NC DR NTC (national terms and conditions) development

Country case studies (Section B): Seven: France (Enedis), Italy (Areti), Netherlands (Alliander), Portugal (E-REDES), Sweden (E.ON Energy Networks & Göteborg Energi Nät), Norway (Glitre Nett), UK (UK Power Networks). Austria/Germany/Spain contribute expert-group members but have no case-study section in this report.

Summary

The report distils practical experience from the seven country case studies above into 11 recommendations (R1–R11), with 5 of them carrying a Critical Regulatory Action (A1–A5) — specific fixes the DSO sector argues are needed in the NC DR text or NTC design, without which local flexibility markets (LFMs) risk fragmenting or failing to develop. Status quo across all contributing DSOs: local flexibility markets are combined with tariff signals, flexible connection agreements (FCAs), and rules-based mechanisms — “one tool” is consistently described as insufficient. Cold-weather winter demand (Sweden, Norway) is named as a major driver of peak flexibility needs.

11 recommendations, 5 critical regulatory actions

Not a real critical action (correcting the prior version): there is no “technical vs. commercial aggregator” distinction numbered as a critical regulatory action in this report. The report does discuss distinct market roles (Service Provider, Aggregator, Procuring System Operator, Balancing Responsible Party, Electricity Retailer) in Section 4.2, and “Technical Aggregators” appear under A1 — but not as a standalone A3-style action.

Sweden case study (Section B.5 — E.ON Energy Networks & Göteborg Energi Nät)

Structure: TSO Svenska kraftnät (400/230/120 kV, per the report — the DSO Entity report states 120 kV, not the commonly cited 130 kV) → five regional DSOs (130/70 kV) → 165 local DSOs handling final distribution (~170 DSOs total, consistent with the wiki’s existing DSO count).

Congestion character: mostly administrative, driven by the TSO capping DSO subscription increases at connection points — not primarily real-time physical congestion. Winter (November–March) operational congestion dominates; a 10-year winter event can raise capacity need by ~30%. Generation-driven congestion is a newer, still-minor phenomenon.

Timeline: CoordiNet (2019–2023, EU Horizon 2020; Vattenfall Distribution, E.ON Energy Networks, Ellevio, Svk) introduced structured flexibility markets → sthlmflex (2021–2024, Stockholm, NODES platform; Vattenfall Distribution, Ellevio, Svk) → 2023–24 expansions: Vattenfall’s Uppsala Flexmarket, E.ON’s Flexmarket, Göteborg Energi’s Effekthandel Väst, Jämtkraft’s Jämtflex → live in 2025: E.ON’s Flexmarket and Effekthandel Väst.

TSO–DSO coordination: the CoordiNet-era coordination between Svk and DSOs (shared subscription management, bid-forwarding to mFRR) was discontinued after the project ended, despite support from both DSOs and service providers — cited by the report as an example of unresolved R10 coordination need, not a resolved one.

Effekthandel Väst (Göteborg region, NODES platform): products are LongFlex (seasonal availability, Nov–Mar, pay-as-bid), ShortFlex (hourly energy bids, opens 6 days ahead/closes 2 hours before delivery, mandatory activation for LongFlex-selected SPs), and MaxUsage (simple consumption-cap product, paid only while under the agreed level). Minimum bid 50 kW, aggregation allowed, five baseline methods available, minimum delivery 75% for compensation. ~30 service providers as of the report.

E.ON Energy Networks’ own flexibility market (nine regions, via its Switch platform): products are Season availability, shorter-notice Availability, and Direct orders (energy-only, 2 days to 3 hours ahead). Minimum bid 100 kW, aggregation allowed, 75% minimum delivery. E.ON has signed flexibility contracts running until 2029. Elsewhere in the report’s Sweden material, E.ON is described as applying N-1 rules and overbooking its grid up to 130% using FCAs and flexibility markets, deciding via cost-benefit analysis whether flexibility is cheaper than reinforcement.

National standardisation: Göteborg Energi / E.ON / Vattenfall Distribution / Jämtkraft developed Sweden’s first national standardised flexibility products in dialogue with stakeholders and the TSO, approved by the Swedish NRA (Ei) in December 2025 — coexisting with products still under development.

Challenges named: no national FCA framework yet; grid congestion in Sweden is often administrative rather than physical, which complicates TSO–DSO alignment; market liquidity still needs to grow.

Report conclusions

Distributed flexibility and local-service markets are described as “no longer emerging concepts” but proven operational tools. Central conclusion: distribution-level constraints are locational and time-specific in a way system-wide balancing products cannot address efficiently — tailored local products are necessary, not merely convenient. Liquidity, trust, and operational simplicity are named as the deciding factors for market success, built over time through predictable procurement rather than created instantly. DSOs are described as evolving toward a role as “Digital Connecting System Operators” — a general framing from the report’s conclusion (Section 3.12), not a numbered critical action.

Relevance to wiki topics