Abstract
The increasing penetration of renewable energy and the transition toward decentralized power systems have highlighted the need to unlock the flexibility potential of distributed energy resources in multi-timescale electricity markets. However, the effective utilization of distributed energy flexibility (DEF) remains constrained by heterogeneous resource characteristics, complex cross-timescale interactions, uncertain user behaviors, and insufficient coordination among market participants. This review systematically examines recent advances in DEF utilization and demand-side coordinated operation, with particular emphasis on the fundamental scientific issues underlying flexibility characterization, market participation, incentive mechanisms, and coordinated optimization. Beyond conventional technology-oriented or market-oriented classifications, a multidimensional analytical framework is proposed that integrates four interconnected perspectives: flexibility resource characterization, coordinated participation mechanisms, value-oriented incentive pricing, and multi-timescale optimization strategies. Within this framework, the mechanisms governing flexibility availability, price signal transmission, aggregator-mediated coordination, and intelligent scheduling are comprehensively analyzed, while recent developments in demand response modeling, market mechanism design, and data-driven optimization are critically synthesized. Furthermore, key theoretical and methodological challenges are identified, including the absence of unified flexibility evaluation standards, incomplete coupling between market mechanisms and operational scheduling, inadequate representation of behavioral uncertainty, unresolved multi-agent benefit coordination, and computational limitations in large-scale cross-timescale optimization. The review further reveals that future DEF development requires a transition from isolated resource dispatch toward an integrated paradigm combining resource–market–operation coordination, in which digital technologies, artificial intelligence, and adaptive decision-making mechanisms enable dynamic flexibility valuation and autonomous system regulation. This review establishes a systematic knowledge framework linking flexibility characterization, market mechanism innovation, and intelligent optimization theory, providing new insights into the value realization of distributed flexibility resources and offering theoretical foundations for the design of resilient, efficient, and adaptive next-generation electricity markets.
