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To achieve the European climate targets and the Paris Agreements, at least 65% of the electricity needs to be generated from renewable energy sources by 2030. This requires a significant increase of distributed energy resources, posing a challenge for distribution system operators to integrate them into existing hierarchical grids. The concept of Local Flexibility Markets has recently gained attention as a market-based tool to tackle this challenge, making use of demand side flexibility. In this paper a Delphi method has been performed, showing that there are still numerous barriers in place preventing a widespread adoption of such markets in Europe. The main obstacles for market participants refer to standardisation issues. Based on that, a hybrid market model has been developed, comprising elements of a Local Flexibility Market and a Local Energy Market. To activate demand side flexibility from local energy transactions, spatio-temporally varying price signals are introduced, reflecting the constraints of the distribution grid. The paper shows, that this novel market approach helps to overcome relevant standardisation issues, but also certain barriers regarding end-users' lifestyles, which is because prices are comprehensible signals that can motivate end-users to participate. Moreover, a set of numerical examples is provided to illustrate the monetary benefits that could be gained by consumers and prosumers in the proposed hybrid market model. The examples show that the major share of the cost savings result from local energy trading, but the hybrid market model is also able to accumulate additional smaller revenues from providing flexibility. Finally, the systematic approach of characterising the market model in this paper offers a valuable framework for other researchers to map their ideas among existing approaches of Local Energy and Flexibility Markets. • A framework for characterising Local Energy and Flexibility Markets is provided. • Main barriers for adopting such markets are related to standardisation issues. • A hybrid market model is proposed, featuring local energy and flexibility trading. • Trades are steered by dynamic price signals, reflecting various flexibility needs. • Numerical examples indicate the expected financial implications. [ABSTRACT FROM AUTHOR]

Providing more affordable and cleaner energy for all raises complex and significant financial, political, technical, and institutional issues, which must all be addressed to ensure sustainable development. Energy technology innovation has a critical role to play as one of the best pathways to achieve the transition to a global clean energy system. This paper is an endeavor to study the impact of government energy technology research, development, and demonstration (RD&D) budget, which is the primary input of energy technology innovations on cleaner energy supply and carbon footprints (CFP). In this study, a cleaner energy supply is measured as the contribution of renewable energy to total primary energy supply (RE). We assumed that the effect of energy innovation is not uniform but varies according to the descending and ascending movements in a government's energy technology RD&D budget. To this end, we distinguished the impact of the descending and ascending movements in government energy technology RD&D budgets on cleaner energy supply, and CFP in Europe over the period 1985 to 2016. Additionally, we carried out a comparative examination of the effects of energy technology RD&D expenditures on RE and CFP under both linear and nonlinear panel techniques. To increase room for policy implications, we also controlled for the role of economic growth and trade openness and performed several robustness check analyses. We found that the reduction of carbon footprints associated with an increase in public support to energy technology RD&D is more pronounced than the contribution of energy technology innovation to the deployment of renewable energy in Europe. This study provided little evidence in favor of the effectiveness of a government energy technology RD&D budget to substantially boost renewable energy in Europe. Following these results, we suggest that the knowledge of the asymmetric linkage between public energy technology innovation, RE, and CFP is a starting point to achieve win-win solutions that favor clean energy and environmental sustainability. • Optimizing the nonlinear effects of energy technology RD&D budgets over different time horizons. • Asymmetries in the responses of RE and CFP to shocks in energy technology innovation budgets. • The influences of energy technology innovation vary over different time horizons. • The public budget devoted to energy innovation is fundamental for curbing CFP rather than boosting RE. [ABSTRACT FROM AUTHOR]