Solution section
Network Coordination
How transmission and distribution constraints enter operational coordination.
Network Coordination
The national wholesale price substantially abstracts away from the detailed transmission network.
Transmission constraints are instead handled operationally through actions taken by NESO.
At distribution level, DNOs increasingly procure local flexibility when network constraints arise.
The architecture therefore has several locational signals rather than one integrated locational price:
- transmission constraint-management costs;
- transmission and distribution network charges;
- connection charges;
- local flexibility prices;
- operational instructions.
The central critique is that location is important physically but only partially integrated into the main energy-market signal.