# Towards Flexible Distribution Systems: Future Adaptive Management Schemes
## 4 Market Schemes for Adaptive Control and Management Methods Collaborative TSO-DSO Use
### Tso-Dso Collaborative Market Scheme  
As stated previously, the new adaptive control/management and market schemes, such as flexibility markets, have to be compatible with each other and act as enablers of the evolution as well as increased TSO-DSO collaboration. New market structure and flexibility marketplace(s)/platform(s) can enable maximization of flexibilities collaborative value in the future. Table 6 presents the potential evolution of market schemes during stages 1-3, with a special focus on frequency control markets as well as compatibility with the adaptive control and management methods/principles defined in Tables 2-5. When considering, for example, stage 2 in Table 6, it is seen that the general market structure will develop so that it enables increased use and participation of DSO network-connected DER for the provision of active power control-related services through local/regional flexibility markets. Simultaneously reactive power markets will also be integrated into the flexibility markets. In order to also increase customers/prosumers' participation motivation/incentives at stages 2 and 3 for flexibility services provision, simultaneous use of dynamic distribution tariffs (Table 6), together with enlarged flexibility markets (including also reactive power markets), could be increasingly applied with compatible technical solutions and adaptive control and management methods described in Section 3 (Tables 2-5). At stage 3, flexibility markets could be even further enlarged with MV and LV network local power quality improving markets related to current/voltage phase asymmetry and harmonics compensation (need for these increases due to increased integration of EVs and PVs). As an example, Figure 8 also shows DSO network-connected DER possible participation in the provision of TSO frequency control services at evolution stage 2 (Tables 1-6) through different frequency control markets (Table 6), also considering the location of DER as well as possible DSO network congestions (Tables 2-5). In addition, as stated in Table 5, at stages 2-3, frequency deviation-dependent adaptive OLTC operation during larger frequency deviations (e.g., at level 3 in Table 6 and Figure 8) could be used for frequency support through markets as centralized demand response. Respectively, during smaller frequency deviations at evolution stage 2 (e.g., at level 1-2 in Table 6 and Figure 8), adaptive OLTC operation would be used for maximizing distribution network hosting capacity (e.g., EVs and PVs) and availability of DSO network-connected DER for TSO services provision by minimizing voltage limits-related congestions in MV and LV networks as far as possible by also coordinating DER unit droop settings with OLTC set value (Tables 2-5, Figures 3-5, Figures 3-8). In the future, during evolution stages 2-3, more accurate real-time state estimation and state-forecasting will be essential. Regarding this, for example, time-synchronized real-time measurements from the distribution network (e.g., at certain MV/LV substations) could be used for improved state knowledge, which is the input needed, for example, for congestion management (Figure 8). Accurate state knowledge can simultaneously ensure that the current thermal and voltage limits of the MV and LV lines are not exceeded, but also that full MV and LV line/feeder capacity, as well as DER flexibility service potential and market participation (Table 6), can be used. Some of the potential DSO and TSO flexibility services and related functionalities (Figure 3 and Tables 2-5) may have mutual effects and momentary conflicts of interest. Partially, this challenge could be avoided by the use of different flexibility services and functionalities only at predefined frequency deviation levels/ranges as well as by also considering the type and location of the DER unit providing the services (Tables 2-6 and Figure 8). Potential mutual effects between all the different functionalities should be carefully considered.