  The increasing share of distributed energy sources enhances the participation
potential of distributed flexibility in the provision of system services.
However, this participation can endanger the grid-safety of the distribution
networks (DNs) from which this flexibility originates. In this paper, the use
of operating envelopes (OE) to enable the grid-safe procurement of distributed
flexibility in centralized balancing markets is proposed. Two classes of
approaches for calculating OEs (one-step and two-step methods) are compared in
terms of the level of distribution grid safety they can provide, the impact
they can have on the market efficiency, and the volume of discarded flexibility
they can yield. A case study considering different system scenarios, based on
Monte Carlo simulations, highlights a trade-off between the market efficiency,
DN flexibility resource utilization, and the grid safety delivered by the
different OE methods. The results showcase that the use of the two-step OE
approach results in a more grid-secure albeit less-efficient use of distributed
flexibility.
