Flexibility and retail market options for the distribution grid

Proposals will develop and demonstrate integrated solutions which will allow the distribution grid to function in a secure and stable manner with large shares of variable renewables. A combination of at least two of the following elements will be tested:

• Flexibility measures and electricity grid services provided by storage of electricity (including batteries and vehicle to grid technologies), power to-X (in particular power to heat), demand response[[Proposers who want to address specifically demand-response should consider topic LC-SC3-EC-3-2020]] and variable generation enabling additional decarbonisation;
• Smart grids technologies for an optimum observability and tools for higher automation and control of the grid and distributed energy sources, for increased resilience of the electricity grid and for increased system security, including under extreme climate events;
• Market mechanisms incentivising flexibility or other market tools should be defined and tested, for mitigating short-term and long-term congestions or other problems in the network (e.g. dynamic network tariffs and solutions to reduce the costs of energy transition, non-frequency ancillary services). Solutions should demonstrate the necessary cooperation with other system operators and particularly TSOs by facilitating the integration of wholesale and retail markets.

Replicability and scalability of solutions is desirable to ensure the maximum impact of the use of the project results.

Proposals should include a task on the analysis of obstacles to innovation under the current context but also under the future market design context and foresee the coordination on policy relevant issues and obstacle to innovation (e.g. regulatory framework, business models, data management, consumer engagement) with similar EU-funded projects through the BRIDGE initiative[[http://www.h2020-bridge.eu/]]. An indicative budget share of at least 2% is recommended for the research work associated with these issues and an additional 2% for the coordination effort.

Proposals should build upon the insights and results of projects that have already been selected in this field under H2020 (information can be found on the BRIDGE web site[[http://www.h2020-bridge.eu]]) and demonstrate their innovative character.

Proposals should comply with the requirements stated in the section 'Common requirements' of the introduction to the part on the Smart citizen-centred energy system.

Proposers can apply under the following two sub-topics:

1. Flexibility and retail market options for the distribution grid
2. Flexibility and retail market options for the distribution grid: International cooperation with Canada.
   In several international contexts such as the Clean Energy Ministerial, the Mission Innovation initiative launched at COP21, the International Energy Agency Implementing Agreement on Smart Grids (ISGAN), bi-lateral discussions between Canada and the EU identified this topic as being of common interest owing to its potential for decarbonisation. In line with the strategy for EU international cooperation in research and innovation (COM(2012)497), international cooperation with Canada is required under this topic. The cooperation must be under the form of a Coordination Agreement between the Horizon-2020-funded project with a project with similar scope and sizeable efforts supported by Canadian funding authorities (see also Eligibility and admissibility conditions).

Proposals must clearly indicate to which sub-topic they apply.

TRL will range typically between 5 and 8 (see part G of the General Annexes). Proposers will indicate the estimated levels of TRL at the beginning and at the end of the project.

The Commission considers that proposals requesting a contribution from the EU of between EUR 6 to 8 million would allow this specific challenge to be addressed appropriately. Nonetheless, this does not preclude submission and selection of proposals requesting other amounts.

Today, a large share of variable generation electricity sources are connected to distribution grids that were originally designed to distribute electricity supplied by large centralised power generation plants through the transmission grid. In view of the expected growth of variable electricity production, and a shift towards more electrified heating, cooling and transport sectors, new approaches have to be found for managing electricity distribution grids in order to ensure affordability of energy, security and stability of supply, while avoiding massive investments in infrastructures. Electricity storage, in particular relying on batteries, power to heat/cold, power to X, vehicle to grid and other storage solutions will play a key role in providing services to the grid and improve and reinforce the networks capacities.

Projects are expected to develop and demonstrate solutions which contribute to at least 2 of the following impacts:

• Enhance flexibility of distribution grids which are expected to operate in an overall context of 50% electricity production from renewables in 2030 (EU28 average, see[[EU Reference Scenario 2016: Energy, transport and GHG emission trends to 2050]]);
• Contribute to define the conditions of a well-functioning electricity market which creates business case for stakeholders willing to provide such flexibility and allow to sustain the necessary investments (e.g. variable price strategies);
• Improve the capability to manage future energy loads including electrical vehicles;
• Improve distribution grid operations which guarantee security of supply and the use of flexibility products while integrating large shares of variable renewables avoiding unnecessary investments by solving congestion.

In the case of sub-topic 2) International cooperation with Canada, the expected impacts of the cooperation to be substantiated in the proposal are to deliver mutual benefits and added value (i.e. in addition of the sum of the results of the two projects).

Proposals are invited to identify and substantiate to which of the above impacts they contribute and include ad-hoc indicators to measure the progress against specific objectives of their choice that could be used to assess the progress during the project life.