In recent years, new types of components have entered the energy system. This has led to an increased share of local energy systems, increased system complexity, and a growing number of marketplaces for flexibility and system services. This calls for new market models that minimize sub-optimization.

- Today, there isn't really a regulatory framework in place to optimize energy usage within a local energy system. It's not easy to buy and sell surplus energy between buildings within an energy community, says Sarah Rönnberg, Professor at Luleå University of Technology and responsible for the project.

The project will focus on identifying challenges in current regulations and how market mechanisms can be designed to optimize energy usage.

- By lowering electricity prices during the night, electricity providers encourage us to use energy when consumption is low. But what happens if everyone changes their behavior and uses electricity only at night? It would affect the network's performance and suddenly the market mechanism has created new challenges. In the project, we will investigate if and how we can optimize this, Sarah continues.

The project is funded by the Swedish Energy Agency and is set to run for 3.5 years. In addition to Sarah, Anna Krook Riekkola from Luleå University of Technology, Petter Johansson from ACE, Martin Warneryd from RISE, and two doctoral students are involved in the project.

- I hope that the results of this project lead to an increased understanding of the relationship between market mechanisms, user behavior and system performance. We want to contribute to the development of effective control tools and market models for increased flexibility in the electricity system, Sarah concludes.