In the electricity market, "aggregation" is an intermediary activity that brings together production, consumption or storage facilities, manages them as a single portfolio, and acts in a coordinated manner in the market. The legal entity that provides this service is called an "aggregator".
The main purpose of this model is as follows: There are many small-scale producers, consumers or storage facilities in the market. These structures acting individually can create uncertainty both for themselves and for the grid. Through aggregation services, these units are brought together, and their forecasts, measurements, and market transactions are conducted jointly. This eliminates stress on the system and reduces costs, complexity, and risks for participants.
The tasks of the aggregator may include:
- Entering into aggregation service contracts with facilities in the portfolio.
- Aligning the production/consumption plans of these facilities with each other and with the system.
- Conducting market participation, day-ahead and intraday transactions, balancing and settlement processes.
- Establishing measurement, monitoring, and control systems to reduce imbalances in the portfolio.
As a result, aggregation makes the electricity market more flexible, efficient, and inclusive. Small players' participation in the market becomes easier, grid security increases, and the overall system cost can decrease.