*3.1. Active Consumers*

Consumers are the end-users of electricity, and they use it to perform specific activities (industrial, commercial, or residential). Three different types of consumers are considered depending on their connection point to the grid as follows:


Consumers used to be a static agen<sup>t</sup> that only consumed energy. Currently, this activity can be complemented with the production of electricity through self-generation, providing demand response resources, and being an active participant in electricity markets.

Consumers can be understood as a sum of loads that can own the metering equipment. Recently, it is becoming more and more common that customers may build their own generation resources, especially by using renewable resources. These generation facilities may range from a few kW to several MW. When generated electricity exceeds the demand, it can be sold to the main grid through retail companies that will be responsible for ensuring the economic compensation to small consumers by providing an electricity net balance with the system specified prices.

Regarding demand response resources (DRRs), they may exist in the customer facilities as a part of the demand that can be reduced/incremented according to the prices in the operation markets. Currently, it is becoming common that consumers own electric vehicles and small storage systems that can be operated in a smart way by aggregators or themselves [49] to have the possibility to offer operation services. Consumers should have the required communication systems to provide DRR in this case. Consequently, and depending on their size, consumers may require communication systems with other agents. For example, large flexible consumers will require direct communication with the TSO if they are connected to the transmission grid or direct communication with the distribution system operator (DSO) if they are connected to the distribution system. On the other hand, small and medium consumers will just interact with aggregators.

The consumer's main traditional transaction is to buy electricity from the grid and pay for it. Consumers can also now sell electricity to the grid and, eventually, may offer DRR directly to the DSO in a case where the size of the operable load is higher than the required POS-D. Additionally, these DRRs could also be offered directly to the transmission system operator (TSO) if they are larger than POS-T or through the aggregator. Regarding the economic transactions, consumers pay for the electricity consumed to retailers if they do not directly access the markets. If they do, they pay for energy to the wholesale market operator or the local market operator, to whom they can also sell electricity for dynamic balancing. Additionally, they can also establish bilateral contracts with generators or VPPs. Regarding the operation services, consumers receive payments for the use of their flexible resources from the TSO, DSO, aggregators, VPPs, and generators, depending on who uses their flexibility. Finally, since consumers are the end-users of the system, they defray most of the incurred costs, such as transmission and distribution system usage, market and system operators, etc. They may pay them directly to the involved agents or, more commonly, they make a single paymen<sup>t</sup> to the retailer who divides it up with the rest of agents that receive payments from the consumer.
