Flexibility as a driver of regionalized power systems: A multi-regional optimization framework

In the context of the ongoing Energy Transition (ET), power system flexibility has emerged as a critical requirement for integrating increasing shares of Variable Renewable Energies (VREs) into electricity mixes. Because these resources are inherently location-specific, their large-scale deployment calls for a rethinking of how the balance between supply and demand is achieved. In this paper, we propose a multi-regional optimization framework to balance residual load using existing flexibility tools, including dispatchable generation, storage, demand response (DR), and inter-regional exchanges. Applying this framework to a cluster of four southern French regions for the full year 2023, we find that the residual load is met by an overwhelmingly low-carbon dispatchable mix dominated by nuclear baseload, that inter-regional exchanges constitute the primary flexibility channel and generate substantial economic value through congestion rents (∼ 0.91 billion euros). We confirm the robustness of these findings through a dedicated sensitivity analysis spanning the hydro energy budget and the load recovery parameter. These results suggest that introducing an intermediate regional layer for the operation and coordination of power system flexibility could be beneficial from both a technical and an economic perspective.