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Energy users are investing in solar panels, batteries and smart-home energysystems. New technology is creating both new opportunities and new needs.New opportunities arise when users are empowered to respond to marketsignals. New needs arise when network topology is transforming. Decentralizedrenewable energy, electric vehicles, and storage are changing the face of electricitydistribution networks. Taking advantage of new opportunities means openingthe market to all participants. Making the best use of decentralized resourcesmeans identifying decentralized network needs and constraints. This dissertationis divided into two main parts to study the coordination of demand response-user participation- procurement. The first part studies the integration ofdemand response into the wholesale market design. The second part analyseslocal network needs and studies how user participation can be coordinated toprovide local flexibility services.The integration of demand response into the wholesale electricity market isstudied in Part I of the thesis. Demand response needs to be aggregated tomake a difference at a wholesale market level. The aggregation of demand poseschallenges to market design regarding interactions between actors, procurementprocedures and remuneration mechanisms. What’s more, aggregation has effectson current market participants. The aggregator trades flexibility provided byconsumers who already have contracts with retailers. These retailers foreseeneeds of their customers and trade energy accordingly. When a third party,the aggregator, is also making decisions on their forecasted load, conflicts arise.The exact nature of these conflicts is explored in detail. It is found that whenconsumers are asked to modify their consumption patterns at one hour, theyare likely to make up for it at a later hour. This is defined as the rebound effect.Aggregators impact balancing responsible parties (BRPs) on two main levels:market profits and retail profits. Proposals for transfer payments from theaggregator to the BRP to solve these conflicts are modelled using an empiricalapproach. The BRP is modelled as a portfolio owner of generation and load.The aggregator supplies demand response flexibility to the market during thebest possible hours as a result of an optimization. It is found that demandresponse will be deployed as long as the transfer payment is less than thepeak and off-peak market price. Demand response has an arbitraging effectin the market therefore can be profitable for the party attributed balancingresponsibility.Part II of the dissertation is aimed at reaping the possibilities of demandresponse at a local level. While the focus of Part I is geared towards wholesalemarket benefits, the focus of Part II is in using flexibility to deal with grid issuesand avoid network reinforcements. It is found in current literature and ongoingprojects that there is no consensus on a framework design for the procurementof local flexibility. The transmission system operator, the distribution systemoperator (DSO), an independent aggregator, and a third party actor have allbeen proposed as local market operators. A method is proposed to analyze theneed that can be fulfilled by local flexibility in the distribution system. Demandand price criteria for flexibility services are defined from the point of view of theDSO. The value of flexibility to the DSO is defined by an analysis of the savingsachieved by avoiding grid reinforcements. Congestion in the distribution grid ischosen a use-case to test the methodology.A first case is studied where the DSO procures flexibility directly at cost-valuein order to avoid network reinforcements. It is found that flexibility use can saveup to two thirds of the cost of grid reinforcements for the DSO compared tothe case without flexibility. A second case is studied where a profit maximizingmaking aggregator is introduced. In this case, the DSO competes with a BRPfor the flexibility resources that would solve its problems in the grid. A quantitydemanded and a valuation of flexibility for the BRP is proposed. The BRPneeds flexibility to cover deviations in its short term to intraday renewableenergy profiles. The BRP is willing to pay for flexibility as long as it costs lessthan the balancing penalties it would otherwise incur. The two actors, DSOand BRP, have different decision horizons. The DSO needs to make a decisionto buy flexibility or reinforce the network in advance, while the BRP needsflexibility on an almost real-time horizon. The aggregator needs to make thedecision of who to sell to in advance, so the market is bilaterally organized. Itis shown that as the DSO’s willingness to pay is higher than the BRP’s mostof the time, so it wins the bid for most of the available flexibility with respectto the BRP. There is still a long way to travel for users to deliberately affectthe functioning of electricity markets and grids. This dissertation opens up adiscussion on a whole scale and a local level in an effort to exploit different possible uses of flexibility.