DFLEX: A Blockchain-Anchored Marketplace for Direct Participation of Small Distributed Energy Resources in Transmission and Distribution System Operator Flexibility Markets—Evidence from a One-Year Island Pilot

Distributed energy resources (DERs), such as prosumers and controllable loads, represent a large and underused reserve of power-system flexibility. Their direct participation in electricity markets is nonetheless blocked by three coupled barriers: individual assets are too small to bid, system operators need a trusted record of what was actually delivered, and prevailing regulation admits flexibility only through aggregators and only toward a single operator. This paper presents DFLEX, a blockchain-anchored marketplace that lets small DERs participate directly, without an obligatory aggregator, in both transmission-level balancing (aFRR and mFRR) and distribution-level congestion management using the same assets. Trust is made structural rather than institutional: each asset holds a W3C Decentralized Identifier and signs its offers, each cleared bundle is committed as a keccak256 Merkle root and a representative set is anchored on-chain for independent verification, and only anonymised, executed activity is exported to a European energy data space. We report one year of simulated-production operation on the Greek island of Skiathos, where 54 enrolled DERs served the national transmission operator (IPTO) and distribution operator (HEDNO). The platform cleared and settled 1365.6 MWh of flexibility across 935,558 settlement records and procured flexibility about 20% below the 2025 balancing-price reference. Modelled net participant revenue ranges from €39 to €591 per year, giving payback within a few years for commercial loads. We assess the market, matching and settlement system at Technology Readiness Level 7 and the on-chain layer at Technology Readiness Level 6, because the latter runs on a test network; the remaining barriers to commercial roll-out are economic and institutional rather than technical.