In the past, separate energy supply systems for electricity, natural gas and heat were established, planned and operated mostly independent from each other. One of the core ideas of the energy transition, not only in context of the cellular concept, is the coupling of there so far separated energy sectors in planning and operation, the so called sector coupling. Sector coupling enables the better use of for example self-balancing statistical effects, possibly leading to reduces system cost. Also, coupling the natural gas and heat sectors to the electrical system is essential for the shift away from fossil energy carriers within those sectors.

In ZellNetz2050, an extensive definition for energy cells was developed, based on the definition given by German VDE in 2015 but advanced with regard to efficiency and economic feasibility. The definition of an energy cell is deliberately kept as general as possible to make the cellular concept applicable to all situations. An energy cell is therefore a balanceable part of a multi-sectoral energy supply system, comprised of the supply infrastructure of the relevant energy sectors in which the balancing of generation and consumption across all energy forms is carried out in cooperation of neighbouring energy cells and supervised by an energy cell management. In practice, this means that the delimitation of energy cells primarily follows the geographical extent of the infrastructure on one hierarchical level. Therefore, an energy cell can be an individual household, but also a quarter, a local low voltage electrical grid, a regional district heating grid, or, on the highest levels, a whole country. Usually, the extent of the infrastructure of different energy sectors on one hierarchical level does not match, therefore, the energy cells of different sectors can overlap on the same level. In ZellNetz2050, the electrical system is considered the leading system since it experiences the greatest volatility and most renewable energy sources and loads are going to be connected to it.

In comparison to other projects in the context of the cellular concept, ZellNetz2050 does not pursue a microgrid approach in which energy cells aim at a mostly self-sufficient energy supply. On the contrary, geographical and temporal statistic self-balancing effects are utilised by a dynamic, system-wide market optimally to reduce the need for comparatively lossy storage or conversion of energy down to a minimum.

The energy system is grouped into three different energy cell levels vertically:

• Level A contains all end customers beyond a point of common connection, e.g., residential buildings, industrial facilities, power plants, wind farms et cetera
• Level B contains all distribution systems, thus, low and medium voltage grids in the electrical system usually operated in radial shape
• Level C, finally, contains the transmission systems on interregional, national and international levels

This classification is essential for understanding the tasks and responsibilities of the energy cell management units.

Every energy cell comes with an energy cell management (ECM) that by definition has the task to monitor, control, and regulate the supply technologies as well as the energy and information flows into, within, and out of the energy cell. The decision-making part of the ECM is generally called system operator, whose different tasks on different energy cell levels reflect in the exact name of the unit. On level A, the system operator is called unit operator (because it is responsible for one end customer unit) and its task is the internal optimisation of the end customer energy cell. On the energy cell levels containing energy grids, the system operators are called independent system operators (ISOs, following their American role models). Further differentiation leads to local ISOs (LISOs) on level B and central ISOs (CISOs) on level C, the former resembling today's distribution system operators in many ways and the latter assuming the responsibilities of the transmission system operators of the current European system. The ISOs reflect one of the central ideas of the proposed two-stage system and market concept since they take on the combined optimisation of the grid and the day-ahead and intra-day parts of the energy markets, resulting in an (under ideal conditions) inherently congestion-free and (on level C) n-1-safe market result. The central tool for influencing level A cells' behaviour are nodal, dynamic electricity prices (local marginal pricing, LMPs), similar to the pricing system in the US. One central differences is that these LMPs do not only depend on the active power imbalance at a specific node but also the potential grid congestions, meaning that this method also serves as preventive congestion management.  From here, an important differentiation regarding the motivation for the flexibility utilisation follows:

• Flexibility utilisation to prevent congestions, i.e., to influence to transmitted power in certain positions, and
• Flexibility utilisation to balance overall generation and demand

Both motivations arise in planning and operation in different manifestations and should be considered when interpretatiing results.

On the level of end customers, the Unit Operator is responsible for the internal optimization of all units in the energy cell considering internal (e.g., load) and external (e.g., weather) prognoses, and the generation of bids to be submitted to the corresponding ISO. The CISO is responsible for the actual market clearing, with the LISOs assisting by aggregating the data submitted by the energy cells on level A as well as by disaggregating the data after the market clearing. The optimisation problem is solved iteratively, distributed to the energy cells and in parallel, drastically reducing the calculation effort for each cell as well as the communication effort between cells. To balance deviations from prognoses or the scheduled grid topology due to faults, the market clearing process can also contain the procurement of ancillary services. Since this market design and the roles of the different entities differs greatly from the European status quo, a transformation path was investigated taking into account the European regulatory framework.

The market segmets are oriented at existing concepts. The CISO operates a spot market, comprised of a day-ahead market and an intraday market, both cleared in 15-minute intervals. The core task of this spot market is the short-term balancing of generation, load, and flexibility without violating grid restrictions. Furthermore, parties can trade mid- and long-term energy derivatives up to one day before delivery, providing an appropriate mechanism for hedging.

In the context of ZellNetz2050, markets for natural gas, hydrogen, and district heating remain in their current from since frequent congestions are not anticipated in these systems.