Competition Concerns in Electricity Flexibility Aggregators

Introduction

Electricity flexibility aggregators are businesses or platforms that combine the flexible capacity of multiple distributed energy resources (DERs)—such as batteries, electric vehicles, smart appliances, rooftop solar, industrial loads and backup generators—and coordinate them as a portfolio for participation in electricity markets or grid services.

Aggregation can increase competition by allowing small consumers and distributed resources to participate in wholesale markets. At the same time, aggregation creates distinctive competition concerns because an aggregator may control access to large volumes of flexible demand, possess valuable consumption data, operate market-facing software, or become dependent on a distribution-system operator (DSO) or transmission-system operator (TSO).

The principal competition issues include market definition, exclusionary access restrictions, discriminatory grid access, data advantages, interoperability barriers, exclusivity, information exchange, algorithmic coordination, vertical foreclosure, bundling and tying, and mergers involving aggregation platforms.