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Ushering in a New Dawn: Demand-Side Local Flexibility Platform Governance and Design in the Finnish Energy Markets

Author

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  • Nayeem Rahman

    (School of Marketing and Communication, University of Vaasa, Wolffintie 34, 65200 Vaasa, Finland)

  • Rodrigo Rabetino

    (School of Management, University of Vaasa, Wolffintie 34, 65200 Vaasa, Finland)

  • Arto Rajala

    (School of Marketing and Communication, University of Vaasa, Wolffintie 34, 65200 Vaasa, Finland)

  • Jukka Partanen

    (School of Management, University of Vaasa, Wolffintie 34, 65200 Vaasa, Finland)

Abstract

Energy ecosystems are under a significant transition. Local flexibility marketplaces (LFM) and platforms are argued to have significant potential in contributing to such a transition. The purpose of this study was to answer the following research question: how do market conditions and stakeholders shape emerging LFM platform governance choices? We approached this objective with an exploratory single-case study by conducting ten semi-structured interviews with key stakeholders in the Finnish energy ecosystem. The results of the content and pattern analyses revealed the key challenges to LFM implementation such as the current regulatory treatment of flexibility, high costs of gadget installations, and ensuring sufficient liquidity in the market. In addition, we also demonstrated that despite such barriers, the Finnish ecosystem is largely pragmatic about LFMs’ in its midst. All in all, we contributed to the non-technological streams of LFM literature by developing an exhaustive framework with four distinctive dimensions (i.e., ecosystem readiness, value-creation logic, platform architecture and governance, platform competitiveness) for LFM development, which helps academics, practitioners, and policy-makers to understand how novel platforms emerge and develop.

Suggested Citation

  • Nayeem Rahman & Rodrigo Rabetino & Arto Rajala & Jukka Partanen, 2021. "Ushering in a New Dawn: Demand-Side Local Flexibility Platform Governance and Design in the Finnish Energy Markets," Energies, MDPI, vol. 14(15), pages 1-23, July.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:15:p:4405-:d:598749
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    1. Sergio Potenciano Menci & Laura Andolfi & Rawan Akkouch, 2025. "Where do local markets fit in the current European Electricity Market structures?," Papers 2504.13919, arXiv.org.

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