Source - NODES FPM Presentation (2026)

Title: NODES’ experience as a flexibility market operator: What attributes/regulations have proven successful & where are improvements needed? Author: Sofia Eng, Head of Projects and Operations, NODES AS (sofia.eng@nodesmarket.com) Event: FPM (Forum for Platform/Flexibility Markets), Session 2, Presentation 2 Date: 2026 (exact event date not stated in slides) Language: English Format: Presentation slides, 20 pages Source material: raw/fpm-s2-no2-nodes-extracted.txt

A NODES AS practitioner presentation on what product design, market rules, and regulatory arrangements work in practice. Covers: how different technology types fit different products, design principles for market participation, congestion area linking as a platform architecture, TSO-DSO coordination approaches, the Canada/Ontario PowerShare pilot, and operator recommendations for NC DR implementation.

Technology participation matrix (p. 4)

NODES’s operational experience yields a systematic view of how different asset classes fit flexibility market products. Based on subjective observation from NODES projects (2022):

Key insight: large industrial loads suit LongFlex (willing to reserve, unwilling to activate at short notice). Small high-aggregation assets (smart chargers, batteries) have high willingness to activate but are unsuited to long-term reservation — they suit ShortFlex or MaxUsage. This structural split explains why MaxUsage has become the dominant activated-volume product at Effekthandel Väst and Euroflex: it is designed precisely for small, high-aggregation, high-willingness assets.

Design principles for broad participation (pp. 5–9)

Six principles NODES identifies as necessary for a functioning local flexibility market:

1. Small minimum order size — essential for small assets (EVs, domestic loads); NODES’s 0.05 MW minimum is below SWITCH’s 0.1 MWh/h
2. Different product types — not all assets suit one product; LongFlex/ShortFlex/MaxUsage address structurally distinct participant segments
3. Tiered interfaces — processes must accommodate users ranging from industrial operators with SCADA to residential aggregators with limited IT capacity
4. Regular structured dialogue — ongoing feedback between market operator and FSPs drives product design iteration; markets learn from operation
5. Return on investment — thin markets (low activation frequency) require availability payments to sustain FSP participation; DSOs must commit to activating resources; long-term market ambition must be communicated
6. Standardised rules — reduces onboarding friction for FSPs operating across multiple markets and DSO areas

Underlying insight (p. 9): markets must start before the physical network need emerges. Building a market — attracting sellers, building internal systems, adjusting rules — takes years. A DSO that waits until congestion is critical cannot develop a functioning market in time.

Product architecture (p. 13)

The presentation confirms the three-product hierarchy:

• LongFlex: precontracted submission of ShortFlex offers during given hours; FSP receives availability price (reservation product → LFM-p)
• MaxUsage™: limited use of connection during given hours; works with non-firm connection agreements (capacity cap product)
• ShortFlex: hourly activation product; continuous market; pay-as-bid (energy activation product → LFM-e)

Congestion area linking (pp. 15–16)

A key NODES platform architecture feature. The platform models the grid as congestion areas, each of which corresponds to an order book. Areas can be linked vertically:

• Sell orders in a local DSO congestion area become available to buyers in higher-level (regional DSO, TSO) areas
• Buy orders from a higher-level SO flow down to linked sub-areas
• “Link local to regional level” — a single order book hierarchy can span DSO and TSO procurement

This is the platform-level mechanism enabling both the cascade model (forwarding uncleared bids upward) and potential common market coordination without duplicating procurement infrastructure. The DSO defines which congestion areas exist and how they are linked — preserving the DSO’s role in determining what is visible to adjacent SOs.

TSO-DSO coordination models (p. 17)

NODES is currently trialling sequential TSO-DSO coordination. The presentation notes a potential improvement: market-based coordination in the same platform — a common order book where DSO and TSO clear bids from the same resource pool jointly. This is the platform-side expression of the Separate → Sequential → Common market maturity trajectory identified by the EC LFM study (Source - EC LFM Specification and Design Criteria (VITO, 2025)).

Canada/Ontario — PowerShare case (pp. 18–19)

Essex Powerlines (a local DSO in Ontario, Canada) operates a local flexibility market via NODES, with simulated coordination with the IESO (Independent Electricity System Operator — Ontario’s grid operator). Funded through the IESO Grid Innovation Fund.

PowerShare product structure — two types of LongFlex:

• IESO Capacity LongFlex: FSP commits capacity to IESO; activation by simulated IESO at RTEM criteria; activation price ≤ max activation price in individual contract; min 0.1 MW
• Ordinary LongFlex (Essex Powerlines buyer): pay-as-bid; activation price ≤ max activation price in individual contract; min 1 kW

Sequential T-D coordination timeline:

• D-7: Essex Powerlines informs IESO about qualified orders (declaration envelope)
• D-1, 10:00: IESO Capacity LongFlex orders transferred as RTEM-qualified to simulated IESO; all matched Essex Powerlines orders made visible to IESO (IESO cannot activate these)
• Mandatory window (−2h to delivery): Essex Powerlines may activate; simulated IESO may activate
• Orders may be dispatched <2h prior to delivery with explicit FSP consent
• ShortFlex orders from IESO Capacity LongFlex transferred to simulated IESO energy market as hourly products at the same price as local market

The min bid size split (IESO: 0.1 MW vs. Essex Powerlines: 1 kW) reflects TSO aggregation requirements vs. DSO granularity. This is the most developed NODES example of a local market explicitly designed for TSO-DSO co-activation.

MCP traffic light coordination (p. 20)

The Market Communication Platform (MCP) is NODES’s real-time TSO-DSO coordination interface. The 6-step process after a buy order is submitted:

1. DSO/TSO submits a buy order based on market availability
2. Flexibility Market Tool (FMT): order in pending approval state
3. FMT/MCP delivers a trade approval request to the counterpart SO
4. TSO/DSO assesses grid impact of the proposed trade
5. Traffic light signal issued:
   • Green: no grid impact → trade approved
   • Yellow: impact possible → accepted but conversation initiated; trade can be cancelled under strict rules (rarely invoked)
   • Red: critical negative impact → trade rejected
6. If approved: activation in FMT. If not accepted: negotiation phase (step 6.1)

Grid node limits: the MCP also supports pre-configured limits on grid nodes — DSO/TSO buys freely up to the limit; above the limit, the traffic light/negotiation flow is automatically triggered.

This operationalizes the NC DR’s temporary limits concept in real time: conditional trade rejection based on grid impact assessment, with a negotiation fallback rather than hard refusal.

Regulatory recommendations (p. 10)

From NODES’s operator perspective, the EU/NC DR regulatory framework needs:

1. Stakeholder involvement in developing national T&C — national terms and conditions must be developed with practitioners who have run markets; theory-only T&C embeds unrealistic assumptions
2. Incentives for DSOs to start local markets NOW — markets take years to build; waiting for final T&C means DSOs will not have functioning markets when NC DR requires them
3. Cost recovery — clear rules on how DSO flexibility procurement costs are recovered via network tariffs; without this, procurement economics remain uncertain
4. Avoid open-ended derogations — derogations without fixed end dates remove the pressure to build markets; they should be time-limited and tied to progress milestones

These recommendations address the CAPEX/OPEX regulatory incentive problem (Source - Ei Flexibility in Distribution Grids (2023)) and the “market must start before the need” insight noted above.

Relevance to wiki

• NODES — congestion area linking (new); full MCP traffic light mechanism (previously noted only in passing for Glitre Nett); Canada/IESO PowerShare detail; technology participation matrix; regulatory recommendations
• TSO-DSO Coordination — The Central Design Problem — MCP traffic light is a concrete operational implementation of sequential coordination with negotiation fallback; congestion area linking is the platform layer for common-market coordination; Canada PowerShare is the clearest sequential T-D example in NODES deployments
• Network Code on Demand Response — practitioner operator perspective on what NC DR T&C development needs; traffic light aligns with NC DR temporary limits concept
• Effekthandel Väst — technology matrix explains why MaxUsage has become the dominant activated product

Data gaps

• Exact conference name and date for this FPM presentation
• Essex Powerlines PowerShare — whether simulated IESO coordination has progressed to live IESO activation
• NODES’s plans for congestion area linking in Swedish deployments (Effekthandel Väst, any new markets)