The current formal common denominator of the electricity supply system in Europe has been the Harmonized Electricity Market Role Model (HEMRM) set up by ENTSO-E, ebIX, and EFET at the turn of the millennium; it introduced the concept of de-coupling and the vertical structuring of the system into the previously vertically integrated system. Since then, within demonstration projects, the system has been undergoing further changes in a controlled environment, generating bottom-up energy, caused by new technologies, business models, and new players, and extending the concept of the system to the level of energy communities and prosumers.

Therefore, this paper proposes a coherent approach to the extension of HEMRM to the lowest levels in both the grid and market segments—full harmonization. This entails further structuring of both segments downwards and applying the principles of vertically nested subsystems—a system of systems approach—to a unit functional level of the electricity system, which can be the prosumer itself. At the lowest levels, the de-coupled system becomes coupled; additionally, it cross-sects with other energy vectors. Complete harmonization reduces the number of system and market segments and represents system standardization, leading to both subsystem and system-wide optimization: energy trading takes place on each level, and each system tries to optimize its operation techno-economically, in terms of the efficient use of energy and balancing of supply and demand.

Prerequisites for it include the automated trading of flexibilities by the prosumers and implicit trading of energy transfer capacities along the distribution grids. The energy reservoirs, implicit and explicit, short-term, and long-term, play a vital role in techno-economic balancing.


A representative subsystem this concept enables is Local energy community (LEC). The LEC consists of prosumers, consumers, and producers of different sizes and characters: residential homes, tertiary buildings, RES producers, industrial companies of various sizes, and technology—all of which are connected to the electricity grid.


LEC is one of the most relevant ecosystems in terms of green transition. It brings into the energy supply system new players—prosumers—who actively trade their flexibilities among themselves and on the external markets, and stimulates new enabling technologies, notably, automated close-to-real-time trading, boosting end-to-end automated solutions. With the advent of hydrogen-based systems in energy supply, the LEC represents an energy supply subsystem that, on the one hand, boosts the local production of renewables, and on the other hand, links different energy carriers, thus providing a cross-sector optimum.

The complete paper is available at the link:

Among authors of the paper is a member of our research team,  Zoran Marinšek, PhD and our member Renn d.o.o. representative, Sašo Brus.

Significance of LEC use case – it is replicable in all regions in Europe and globally with sufficient local expression and topology:

  • It will create substantial market
  • The sizes of building blocks – products in RES and hydrogen-based systems will be from a few kWe to a few 100 kWe (a few MWe)
  • These sizes provide opening for participation of regional industry in international value chains with their products & services, as part of the functional units, both in RES and HFC, but also electrolysers. This is predominantly the sector of high tech SMEs and start-ups.
  • LEC, shaped as subsystems in energy supply, will be on average 75% self-sufficient, peaking at close to 90%. As such, LEC will be the carrier of dispersed energy production as opposed to concentrated energy produvtion.
  • Additionally, we envisage that at least 50% of supply in these investments will come from local industry.

The partitioning between concentrated and dispersed production will be based on energy flexibilities supplied by the prosumers: concentrated production will focus on base-load supply, while local production will cater to most of the transients on the distribution grids, as conceptually depicted in the picture bellow: