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Energy flexibility is essential for maintaining grid stability and efficiency as more renewable energy sources are integrated. The grid frequency needs to stay stable at 50Hz for the system to stay up and running, and production and consumption must remain balanced. Flexibility allows the system to respond to fluctuations from intermittent sources like wind and solar.

There are two main categorizations.

By direction: upwards flexibility (reducing consumption or increasing production when there is too little energy on the grid) and downwards flexibility (increasing consumption or decreasing production when there is too much).

By participation type: explicit flexibility involves direct, active participation in the market by consumers or aggregators with financial rewards, while implicit flexibility refers to passive responses to price signals through dynamic tariffs.

Flexibility is traded across several market types: the Day-Ahead market (blind auction closing at 12:00 CET, 15-minute blocks), the Intraday market (continuous 24h trading up to 5 minutes before delivery), the Imbalance market (real-time balancing operated by TSOs like Elia), and ancillary service markets (FCR, aFRR, mFRR). Power exchanges like EPEX SPOT provide the trading platform, with transactions cleared and settled by ECC (European Commodity Clearing) with the help of TSOs.

Flexible resources include batteries, solar panels, electric vehicle charging points, and heat pumps. These are Distributed Energy Resources (DERs): small-scale energy resources usually situated near sites of electricity use, such as rooftop solar panels, heat pumps, e-boilers, and battery storage.

Energy retailers and suppliers can use a virtual power plant to optimise their customer portfolio's energy supply, matching supply with demand even at the last minute before delivery. By participating in markets like day-ahead, intraday, imbalance, and ancillary services, flexibility providers unlock new revenue streams while enhancing the efficiency and sustainability of the energy grid.

Upwards flexibility examples: using Vehicle-to-Grid (V2G) to inject from an EV back into the grid, activating a battery to inject, turning down a heat pump, or stopping/reducing EV charging.

Downwards flexibility examples: reducing or stopping solar injection (curtailment), starting or increasing battery charging, charging an EV, heating up a space by turning up a heat pump, or reducing self-consumption by taking from the grid instead of a battery.

Powernaut enhances smart steering capabilities by providing access to additional markets, resulting in more savings, a lower carbon footprint, and greater efficiency. By participating in flexibility markets, resources can earn revenue through capacity and activation remuneration while helping avoid costly grid imbalances.

Upwards flexibility is activated when there is too little energy on the grid, either from a spike in consumption or a decrease in production below anticipated levels.

Upwards flexibility can be delivered by increasing production (e.g. using V2G to inject from an EV back into the grid, activating a battery to inject) or by decreasing consumption (e.g. turning down a heat pump, stopping or reducing charging of an EV or batteries).

Downwards flexibility is needed when there is too much energy on the grid, either from an unexpected increase in production or less consumption than anticipated.

Downwards flexibility can be delivered by decreasing production (reducing or stopping injection/curtailment from batteries, solar panels, or EVs) or by increasing consumption (starting or increasing battery charging, charging an EV, heating up a space by turning up a heat pump, or reducing self-consumption by taking from the grid instead of a battery).

A virtual power plant is a pool of several decentralised small- and medium-scale installations, either consuming or producing electricity. The combination of several types of flexible production and consumption units, controlled by a central intelligent system, allows valorizing the flexibility of the facilities at its best. This gives access to markets (reserve power and electricity markets) that cannot be entered by individual units.

Open Virtual Power Plant as a service activates flexible energy from smart household, commercial and industrial installations such as batteries, electric vehicles, heat pumps, and solar panels. It bundles, forecasts, optimises, and controls energy portfolios with real-time intelligence, turning distributed assets into valuable assets for the trading desk.

A VPP consists of distributed energy resources (batteries, EVs, heat pumps, solar panels), integrations with leading device manufacturers and independent EMS providers, a central control and optimization system, and connections to energy markets (day-ahead, intraday, imbalance, ancillary services).

Resource managers with direct access to grid resources (managing batteries, solar panels, EV charging points, heat pumps).

A VPP gives access to markets (reserve power and electricity markets) that cannot be entered by individual units of the portfolio. This includes day-ahead trading, intraday trading, imbalance market participation, and ancillary services (FCR, aFRR, mFRR). There are two types of remuneration: capacity remuneration (fee to keep capacity available) and activation remuneration (payment for delivered energy).

Energy suppliers and utilities can use the VPP to optimise their customer portfolio's energy supply, matching supply with demand even at the last minute before delivery. The VPP helps energy retailers venture into new energy markets and explore untapped revenue streams from a single workspace.

Powernaut's open Virtual Power Plant as a service provides a platform where energy retailers and power producers can connect and pool all their distributed energy resources (DERs) into a single point of control. It integrates seamlessly with existing trading desks and supports automated actions for portfolio steering and balancing.

A traditional power plant is a centralized, physical facility (coal, gas) with stable, constant, controllable power output. A VPP is not a physical building but a software platform that connects thousands of decentralized Distributed Energy Resources. Traditional plants are few and large; VPPs aggregate many small assets. The VPP manages volatile, weather-dependent renewable output through smart coordination, where traditional plants relied on dispatchable fossil fuel generation.

The aggregation of small-scale smart energy sources into a significant collective force is crucial for addressing network congestion and balancing energy markets, ultimately contributing to environmental sustainability. A VPP enables effective bundling of DERs, providing access to markets that individual units cannot enter alone.

An aggregator earns through capacity remuneration (fee to keep capacity available) and activation remuneration (payment for actually delivering energy when called upon). By trading the portfolio on relevant markets and offering system services to the TSO, the aggregator supports overall grid operation and integration of renewables.

A supplier operates on the retail market, competing to sell electricity to end-consumers through supply contracts. An aggregator operates as a Balancing Service Provider, combining decentralised production and demand units to participate in wholesale and reserve markets. The supplier resells electricity to consumers, while the aggregator valorizes flexibility.

An aggregator needs integrations with smart energy devices (batteries, EVs, heat pumps, solar), a central control system for monitoring and dispatching, baseline and forecasting capabilities, bidding systems for market participation, and real-time telemetry. Powernaut provides an API and portal for resource managers to integrate assets and participate in markets.

Individual small plants can in general not provide balancing services or offer their flexibility on the power exchanges because their generation profile varies too strongly or they do not meet the minimum bid size of the markets. All parties with at least 1 MW of (aggregated) flexible power can participate. By aggregating multiple units, a market access provider enables smaller players to access these markets collectively.

DERs include demand response devices, distributed generation (solar panels), electric vehicles, battery storage systems, heat pumps, and e-boilers. Flexible loads which can modify their consumption according to external price or control set points are also considered DER.

DERs connect to the grid at the distribution level, behind the main grid meter. Powernaut provides an API that allows resource managers to integrate their smart assets with the platform, enabling participation in flexibility markets. Resources can be connected via cloud connections or smart gateways.

Conventional power plants are centralized facilities that generate electricity on a massive scale in remote locations, requiring extensive high-voltage transmission lines to deliver energy one way to consumers. In contrast, Distributed Energy Resources (DERs) are small-scale, decentralized systems located at or near the point of use, enabling a flexible two-way flow of electricity where users can both pull power from and contribute energy back to the grid. By spreading generation across many local points rather than relying on a few massive hubs, DERs reduce energy loss during transport and increase overall grid resilience against large-scale failures.

DERs participate in energy markets primarily through aggregation, where a third-party provider or "Aggregator" bundles thousands of small-scale resources together to act as a single, massive Virtual Power Plant (VPP). By coordinating these assets, the aggregator can bid into wholesale markets to provide capacity, balance supply and demand in real-time, or offer ancillary services like frequency regulation that keep the grid stable.

Aggregation is crucial because individual small plants cannot provide balancing services or offer their flexibility on power exchanges. By aggregating the power of several units through a Virtual Power Plant, DERs can deliver the same services as a large central power plant and access lucrative markets. This is essential for addressing network congestion and balancing energy markets.

Through a VPP platform like Powernaut, batteries can participate in FCR (sub-second response to frequency deviations), aFRR (automatic setpoint following), mFRR (manual dispatch), Day-Ahead, Intraday, and Imbalance markets. Each market has different complexity levels and technical requirements.

Behind-the-meter systems are interconnected on the customer's side of the electric meter such as a residential home or a commercial building. Their main purpose is to help the property owner reduce electricity bills, store locally generated solar power for nighttime use, and provide reliable backup power during outages.

In contrast, Front-of-the-meter systems are batteries connected directly to the wider transmission or distribution grid, meaning the energy flows through a meter before reaching any specific end-user. Rather than serving a single building, these massive systems are used by utilities and grid operators to balance supply and demand across the entire region, store excess power from large wind and solar farms, and maintain overall grid stability.

SoC determines what flexibility a battery can offer at any given moment. A battery at low SoC cannot provide upwards flexibility (injection) but can provide downwards flexibility (charging). Delivery points with limited energy reservoirs must submit an energy management strategy to the TSO describing how SoC will be managed. Four strategies are allowed in Belgium: using SoC-supporting technical units, transfer of obligations, use of the intraday market, and asymmetric pricing.

The VPP manages SoC through energy management strategies validated by the TSO. These include: using other technical units to recharge/discharge the battery, trading on the intraday market to optimize SoC (deals must be finalized at least one hour before delivery), and asymmetric pricing where bid prices are adjusted based on SoC levels to prioritize activations that restore the storage level.

Curtailment is necessary when there is too much energy on the grid, for example when there is more sun than anticipated and solar panels produce more than the grid can absorb. Without curtailment, the surplus pushes grid frequency above 50Hz and can overload the local grid.

Prosumers participate through aggregation. A Flexibility Service Provider (FSP) links the prosumer and their possibility to provide flexibility to markets and grid. This role emphasizes the specificities of residential DER flexibility interactions. Through a VPP, prosumer assets can be pooled to meet minimum market thresholds.

A VPP aggregates prosumer resources (solar panels, batteries, heat pumps, EVs) into a single pool. The central intelligent system optimises when these assets produce, consume, or store energy. This allows prosumers to provide upwards and downwards flexibility to the grid, earning revenue from markets they could not access individually.

European markets have different rules but work on the same concepts. Power exchanges such as EPEX SPOT (central and western Europe) and Nord Pool (the Nordics and Baltics) are among the biggest, and their day-ahead auctions are coupled across Europe. Orders registered in the order book show supply and demand and determine the energy price.

The Day-Ahead market is a once-daily blind auction (order books close at 12:00 CET) for 15-minute blocks delivered the next day. The Intraday market is continuous 24h trading up to 5 minutes before delivery through quarter-hourly, half-hourly, or hourly contracts. The Imbalance/Balancing market is where BSPs offer flexibility to restore grid balance.

Participants include large producers, suppliers, traders, industrial consumers, Balancing Responsible Parties (BRPs), and Balancing Service Providers (BSPs). Market operators provide platforms where offers to sell electricity or flexibility are matched with bids to buy.

DERs access wholesale markets through aggregation. An aggregator combines several decentralised units in one portfolio, then operates it in a coordinated manner via a VPP. This gives access to markets that individual units cannot enter because they do not meet minimum bid sizes or their generation profile varies too strongly.

It takes place once a day and is operated through a blind auction. The order books close at 12:00 CET. Users submit their willingness to buy or sell, in volume, for all price ticks between the minimum and maximum prices. The price is determined for each 15-minute market time unit by matching supply and demand, resulting in the Market Clearing Price (MCP). All orders have to be fulfilled at the MCP. Buyers and sellers are not matched 1-to-1; only total volume is matched.

The market operator aggregates all supply and demand bids to form the supply and demand curves, then clears the market. The intersection of supply and demand gives the clearing price and clearing volumes. This is based on the merit order curve, which ranks bids of different electricity generation technologies according to price.

VPPs participate through power scheduling systems and consumption forecasting. The Day-Ahead market on Powernaut is rated as basic complexity (●●○○○), making it suitable for predictable flexibility from aggregated DER portfolios.

The Day-Ahead market is a once-daily blind auction for 15-minute blocks, while the Intraday market is continuous 24h one-to-one same-day trading through quarter-hourly, half-hourly, or hourly contracts up to 5 minutes before delivery. Day-Ahead determines a single clearing price; Intraday uses continuous order matching.

The intraday market fulfills the need to balance positions and adjust to unexpected generation or usage changes. It is especially needed for balancing the price of highly fluctuating renewable energies, where actual generation may differ from day-ahead forecasts.

VPPs trade on the intraday market using real-time power monitoring and dynamic scheduling systems. On Powernaut, this market is rated as basic complexity (●●○○○), allowing resources to optimise their position closer to real-time delivery.

Continuous intraday trading means trades happen 24 hours a day on a one-to-one basis (buyer matched directly to seller), as opposed to the day-ahead auction model. Trades can occur through quarter-hourly, half-hourly, or hourly contracts up to five minutes before actual delivery.

The BRP manages its balancing group by nominating its intended position (injection and offtake) across its entire portfolio to the TSO. This net position comprises planned electricity generation, consumption, and imports/exports, and must generally be balanced (generation + imports = consumption + exports). The most common type is the DA nomination: after the DA market clears, BRPs determine their generation and consumption schedules, nominating the result to the TSO. BRPs can also submit intraday (ID) nominations to adjust their positions closer to real-time based on updated information.

Deviations between a BRP's final nomination and actual physical flows result in imbalance charges. The imbalance tariff mechanism incentivises BRPs to aim for keeping balance. For each quarter of an hour, an imbalance price is determined based on the costs the TSO incurs to activate reserves.

A BSP (Balancing Service Provider) offers the flexibility of a unit or load in the reserve market to the TSO. The BSP can but should not necessarily be the BRP to which the flexible installation is assigned. This means aggregators can provide flexibility from assets within different BRP perimeters.

In the Day-Ahead market, all orders have to be fulfilled at the Market Clearing Price (MCP). Buyers and sellers are not matched 1-to-1; only total volume is matched. Every successful seller receives the clearing price regardless of their original bid price, which creates inframarginal rents for lower-cost generators.

In pay-as-clear, all accepted bids receive the same market clearing price regardless of their original bid. This is used in the Day-Ahead market. In pay-as-bid, each accepted bid receives exactly the price they bid. In Belgium, aFRR balancing energy has been remunerated pay-as-clear since Elia connected to the European PICASSO platform on 26 November 2024; before that it ran on pay-as-bid. aFRR capacity is still procured pay-as-bid.

The inframarginal rent is the difference between the market clearing price and the marginal cost of a generation unit. Since renewables have near-zero marginal costs, they benefit from inframarginal rents when the clearing price is set by higher-cost generators. However, as more renewables enter the market, they push down the clearing price.

The grid frequency needs to stay stable at 50Hz. When imbalances occur, three phases of reserves are activated in sequence: Phase 1 (FCR/R1) reaches full activation at a deviation of 200mHz within 30 seconds, automatically. Phase 2 (aFRR/R2) is fully activated within 5 minutes using BSPs and extra energy generation. Phase 3 (mFRR/R3) activates within 15 minutes through manual activation.

Wholesale markets (Day-Ahead, Intraday) are operated by power exchanges where participants trade freely. The balancing market is operated by the TSO, which is the only buyer of flexibility, used to maintain real-time grid balance. Wholesale trading is voluntary; balancing is a system necessity.

VPPs participate as Balancing Service Providers (BSPs), offering the flexibility of aggregated units to the TSO. The VPP provides capacity (keeping assets ready) and activation (delivering energy when called upon). The order of purchase is determined by the merit order principle, picking in ascending order of the cheapest marginal cost.

FCR (R1): Frequency Containment Reserve, kicks in automatically within 30 seconds after deviation from 50Hz. aFRR (R2): Automatic Frequency Restoration Reserve, controlled centrally to restore frequency, active in 30 seconds to 15 minutes. mFRR (R3): Manual Frequency Restoration Reserve, meant to free up R2 reserves, activated locally within 15 minutes.

Grid frequency can deviate in two directions. Positive balancing energy feeds additional power into the grid to counteract a drop in frequency (when there is too little supply or too much demand). Negative balancing energy reduces the amount of power in the grid so that an increased frequency returns to 50Hz (when there is too much supply or too little demand). This corresponds to upwards flexibility (positive) and downwards flexibility (negative).

Prequalification is a multi-step process: (1) Open qualification with sworn statement and proof of financial situation, (2) Private measurement commissioning test, (3) Communication test, (4) Baseline test where the quality factor must exceed 95%, and (5) A prequalification test to determine maximum up and down volumes. Every delivery point must pass the prequalification test every 5 years. Delivery points with limited energy reservoirs (such as batteries) must also submit and validate an energy management strategy.

For each quarter of an hour, an imbalance price is determined taking into account the costs the TSO (e.g. Elia) has for activation of reserves to restore the balance of the system. The Marginal Incremental Price (MIP) is the price of the last activated upward regulation reserve bid, and the Marginal Decremental Price (MDP) is the price of the last activated downward regulation bid.

The Imbalance Settlement Period (ISP) is the specific time frame used to calculate and settle imbalances. The balancing market is where the TSO procures the energy to resolve those imbalances. Imbalance tariffs incentivise BRPs to keep their balancing group in balance.

Each access point must be assigned to a Balancing Responsible Party (BRP). The BRP is responsible for quarter-hourly balance between total injections and total off-takes. After the Day-Ahead market clears, BRPs nominate their position to the TSO and can submit intraday nominations to adjust closer to real-time. Deviations result in imbalance charges.

A VPP helps energy suppliers optimise their customer portfolio's energy supply, matching supply with demand even at the last minute before delivery. By providing automated steering and balancing capabilities across aggregated assets, the VPP reduces the gap between nominated positions and actual physical flows.

The grid frequency needs to stay stable at 50Hz for the system to stay up and running, and production and consumption must remain balanced. Ancillary services provide the mechanism to restore balance when deviations occur, through a sequence of increasingly powerful interventions (FCR within seconds, aFRR within minutes, mFRR within 15 minutes).

The main types are: FCR/R1 (Frequency Containment Reserve, automatic, within 30 seconds), aFRR/R2 (Automatic Frequency Restoration Reserve, within 5 minutes), mFRR/R3 (Manual Frequency Restoration Reserve, within 15 minutes), voltage regulation, and black-start capability.

DERs provide ancillary services through aggregation into a VPP. All parties with at least 1 MW of (aggregated) flexible power can participate. The VPP's central control system manages the portfolio to meet the technical requirements of each market (sub-second control for FCR, automatic setpoint following for aFRR, manual dispatch for mFRR).

VPPs participate as Balancing Service Providers (BSPs), offering the flexibility of aggregated units to the TSO. Powernaut enables participation in FCR (highest complexity ●●●●●), aFRR (●●●●●), and mFRR (●●●●○) across EU-wide and country-specific markets.

There are two types of remuneration: the capacity remuneration (fee to keep capacity available, regardless of whether activation occurs) and the activation remuneration (payment to actually buy the energy for aFRR and mFRR imbalances). The order of purchase is determined by the merit order principle.

Ancillary services are provided by Balancing Service Providers (BSPs), which can be individual large generators or aggregators combining multiple smaller units. The BSP can but does not necessarily need to be the BRP to which the flexible installation is assigned.

The TSO (e.g. Elia in Belgium) is the only requesting party in the imbalance market. BSPs offer their flexibility to the TSO, and the order of purchase is determined by the merit order principle, picking in ascending order of the cheapest marginal cost.

Ancillary services are all actions of grid users that help the TSO maintain balance on the transmission grid, including reserve products (FCR, aFRR, mFRR), voltage regulation, and black-start capability. Balancing energy is the actual energy activated to compensate for the difference (imbalance) between nominated and actual power flows. Ancillary services are the broader category of grid stability services, while balancing energy is the specific energy delivered when reserves are activated.

Black-start capability is an ancillary service that enables power plants to start up autonomously, without external energy supply, after a grid blackout. It is one of the most important ancillary services alongside reserve products (FCR, aFRR, mFRR) and voltage regulation.

FCR responds proportionally to frequency deviations and reaches full activation at a deviation of 200mHz from 50Hz within 30 seconds, without any request from the TSO. Assets respond to grid frequency changes with sub-second control loops and real-time power adjustments to contain the frequency deviation.

FCR requires automatic frequency monitoring, sub-second control loops, and real-time power adjustments. On Powernaut, this market is rated at the highest complexity level (●●●●●) due to these stringent requirements.

Batteries are particularly well-suited for FCR due to their fast response times. Any DER aggregated through a VPP that can meet the automatic response requirements and contribute to the minimum 1 MW threshold can participate.

Through a VPP, batteries provide automatic frequency monitoring and sub-second power adjustments. The VPP's central control system coordinates the response across all aggregated assets to meet the TSO's requirements for frequency containment.

FCR (R1) is automatic and activates within seconds to contain the deviation. aFRR (R2) is centrally controlled by the TSO and is fully activated within 5 minutes to restore the frequency back to its reference value. FCR contains; aFRR restores.

In Belgium, aFRR must be fully activated within 5 minutes, reduced from 7.5 minutes on 4 December 2024. It requires automatic setpoint following, real-time telemetry, and continuous signal processing. The aFRR product is activated automatically by the TSO's SCADA system, sending a set-point every four seconds. On Powernaut, this is rated as highly complex (●●●●●).

VPPs qualify through a multi-step process: (1) Open Qualification with sworn statement and proof of financial situation, (2) Private measurement commissioning test, (3) Communication test, (4) Baseline test (quality factor must exceed 95%), and (5) Prequalification test to determine max up and down volumes. Every delivery point must pass the prequalification test every 5 years. The minimum offered volume is 1 MW with 1 MW granularity. Elia performs at least one availability test per year.

aFRR generates revenue through both capacity remuneration (in euro/MW/h, paid for keeping capacity available during each 4-hour Capacity Contracting Time Unit) and activation remuneration (in euro/MWh, paid for delivered energy when activated). The capacity auction uses bids ranked by merit order principle, while energy bids have a gate closure time of 25 minutes before the concerned ISP. In Belgium, aFRR energy has been remunerated pay-as-clear since Elia connected to the PICASSO platform on 26 November 2024; capacity is still procured pay-as-bid.

aFRR (R2) is automatically controlled centrally to restore frequency. mFRR (R3) is manually activated and controlled locally, meant to replace the aFRR reserves after frequency is restored. aFRR activates within 7.5 minutes; mFRR within 15 minutes.

mFRR is activated in Phase 3 of frequency restoration, within 15 minutes. It is used to resolve significant imbalance and congestion problems through manual activation of exchanges and/or activating generators and deactivating consumers.

Similar to aFRR, mFRR participation requires a valid BSP contract with the TSO, passing communication and baseline tests, and a prequalification test. The minimum aggregated volume is 1 MW. Delivery points with limited energy reservoirs need validated energy management strategies. mFRR must be fully activated within 15 minutes.

Aggregators and VPPs deliver mFRR through manual dispatch systems and real-time power monitoring. The VPP coordinates the manual activation across its portfolio of DERs to deliver the required flexibility to the TSO. On Powernaut, mFRR is rated at ●●●●○ complexity.

When a grid operator expects an overload, it posts the problem on GOPACS. Market parties with flexible assets place orders in a connected intraday market (such as ETPA or EPEX SPOT). GOPACS matches two opposite orders: one party reduces feed-in or consumption inside the congested area, and another party does the opposite outside the area. Because the two trades cancel each other out in volume, the national balance stays untouched while the local overload is relieved. The grid operators pay the price difference between the two matched orders.

A congestion problem is local, but the balance of the whole system must stay intact. By always matching a reduction inside the congested area with an equal increase outside it, GOPACS relieves the local bottleneck without creating a new imbalance for the TSO to solve.

Any market party with controllable flexibility that is active on a connected intraday trading platform can participate: aggregators and virtual power plants, battery operators, large industrial consumers, EV charging operators and generators. Assets are usually offered through an aggregator so that smaller units can reach the required order sizes.

Balancing markets (FCR, aFRR, mFRR) exist to keep the system frequency at 50 Hz across the whole control area. GOPACS instead solves location-specific grid limits: the issue is not too little or too much power nationally, but too much power flowing through one line or substation. It is effectively a market-based redispatch mechanism organised across transmission and distribution level at the same time.

It adds a congestion revenue stream on top of day-ahead, intraday and balancing income. An asset that can shift consumption or feed-in on short notice in a congested region can be paid for doing so, and that value can be stacked with other markets as long as the asset is not already committed elsewhere at the same moment.

By connecting DERs to a VPP platform like Powernaut, energy retailers can participate in day-ahead trading, intraday trading, imbalance market, and ancillary services (FCR, aFRR, mFRR). The VPP turns scattered flexible assets into a manageable entity for the trading desk.

Revenue streams that can be stacked include: FCR, aFRR, mFRR (ancillary services), Day-Ahead market trading, Intraday market trading, Imbalance market participation, and Local Congestion market participation. Each has different complexity levels and technical requirements, allowing assets to participate in multiple markets.

Key actors include: TSOs (responsible for transmission grid), DSOs (responsible for distribution grid), BRPs (responsible for balancing their perimeter), BSPs (offering flexibility to TSOs), aggregators, market operators, prosumers, Flexibility Service Providers (FSPs), and Congestion Service Providers (CSPs).

DERs connect at the distribution grid behind the main grid meter. Through aggregation into VPPs, they can participate in markets that require minimum thresholds (1 MW). The FSP role links prosumers and their flexibility to market and grid roles.

A TSO is responsible for the high-voltage transmission system, its interconnections with other systems, and ensuring long-term transmission capacity. A DSO is responsible for the lower-voltage distribution system. In Belgium, Elia is the TSO while Fluvius, Sibelga, RESA, and others serve as DSOs.

TSOs procure flexibility through the balancing market, where BSPs offer reserve capacity (FCR, aFRR, mFRR). DSOs can procure flexibility through local congestion markets. In the Netherlands, this happens through the GOPACS platform, where Congestion Service Providers submit location-specific redispatch bids.

VPPs and aggregators act as Balancing Service Providers (BSPs), offering flexibility to TSOs. They can also act as Congestion Service Providers (CSPs), submitting redispatch bids to DSOs/TSOs through platforms like GOPACS. The VPP coordinates the response of its portfolio to meet grid operator requirements.

Every DER must be connected at a grid connection point. The connection point determines which BRP perimeter the asset belongs to and which DSO area it is in. For congestion management, bids are location-specific, deployed to relieve congestion at specific grid points.

DSO-led flexibility markets like GOPACS in the Netherlands allow Congestion Service Providers to submit location-based bids to alleviate grid congestion at local levels. Powernaut enables participation in local congestion markets at moderate complexity (●●●○○).

VPPs can act as Congestion Service Providers (CSPs), submitting location-specific redispatch bids on behalf of their portfolio. Through platforms like GOPACS in the Netherlands, aggregated DERs can provide local flexibility to relieve grid congestion.

Smart metering provides the measurement data needed for flexibility. Baselines (normal consumption/production behaviour) are derived from meter data. Deviations from baselines are what create flexibility value in the market.

Smart meters provide hourly consumption readings (AMR) and, with SMR3, consumption data at minute-level frequency. This data feeds into baseline calculations and verification of flexibility delivery.

An EMS manages DERs behind a single grid connection point. A VPP aggregates multiple sites and their DERs into a single portfolio for coordinated market participation. The EMS optimizes locally; the VPP optimizes across the portfolio and trades on behalf of aggregated assets.

Powernaut integrates with independent EMS providers through its API. Resource managers using an EMS can connect their smart assets to the Powernaut platform, enabling the VPP to send flexibility activation signals while the EMS handles local dispatch.

A HEMS manages DERs within a single household. A VPP aggregates many households (and their HEMS) into a coordinated portfolio to participate in energy markets. The HEMS optimizes local energy use; the VPP enables market access for the aggregated flexibility.

HEMS connect to the Powernaut platform through cloud connections or smart gateways. Powernaut provides integrations with leading manufacturers of smart energy devices and independent EMS providers.

Dynamic pricing creates implicit flexibility: passive responses to price signals that adjust consumer behaviour without explicit market participation. This contrasts with explicit flexibility, which involves direct market participation and financial rewards through aggregators and VPPs.