*4.5. Summary*

This section identifies some critical design variables of DCDS market architecture and analyses their options. The market architecture sets the foundation for a market design, based on which we set rules for each sub-market. Its design variables are the choice of sub-markets, market type, linkages between sub-markets, and linkage to wholesale markets. Further study should investigate the linkage between sub-markets and its impact on the overall market performance.

## **5. Sub-Market Design Variables**

Section 4 lists the sub-markets of a DCDS and discusses their arrangement. For each sub-market, this section identifies the crucial design variables that affect its efficiency and competitiveness. To the best of our knowledge, Table 3 lists some critical design variables; for each identified variable, the table shows the options on the right. The selection of the variables is based on literature review of general electricity markets [34,53,54], balancing markets [55,56] and flexibility markets [24,25,57].

Based on different stages of market operation [34], we further categorise the design variables into four groups: general organisation, bid format, allocation and payment, and settlement. The *general organisation* decides buyers and sellers. The *bid format* regulates the information gathered from prosumers. The *allocation rules* determine the economic efficiency of the allocation, while the *pricing rules* sets monetary incentives. Finally, the *settlement rules* guarantee the delivery of commodities.


