Across the European Union (EU), energy flexibility is starting to grow in power systems, encouraged by upcoming decarbonisation deadlines and the network code on demand response. Here’s an overview of some of the trends in 2024 affecting how that flexibility is developing.
1. Distribution system operators in Europe are digitalising as renewables increase
More renewables are connecting to the grid than ever before. Renewables account for nearly 45% of all electricity generated in the EU in 2023, according to Eurostat data – a 12.4% jump from 2022.
A recent report by Accenture and Eurolectric which collated interviews of European distribution system operators (DSOs) highlights that DSOs managing more renewables were generally more digitally mature.
This could be seen in two ways. Either renewables are pushing DSOs to digitalise, due to the complexities that they introduce to power flows. Or, the DSOs that digitalised ahead of time are now reaping the rewards with more connections enabled and more renewables integrated into the grid.
Either way, digitalisation is a necessity for our Net Zero future. Flexibility can slot into those developing set of tools and technologies to create more visibility over system operations and help optimise existing networks.
Conversely, more digitalisation overall can help accelerate a move to more flexible systems. Close integration with distributed energy resource (DER) systems can help monitor and control flexibility. Being data-driven also ensures scalability too, with a future-proof flexible system.
In Germany, there are already regulatory incentives in place encouraging this digitalisation at a more rapid pace. Paragraph 14a of the Energy Industry Act means that all newly installed residential systems with a connection capacity exceeding 4.2 kW are obliged to participate in flexible consumption control, as a last resort to mitigate against a blackout.
2. Market-based flexibility is growing in prominence
Article 32 of EU directive 2019/944 requires member states to deploy a regulatory framework encouraging “transparent, non-discriminatory and market-based procedures”. The procedures should then support and incentivise DSOs to use flexibility, demand response, and energy storage.
It advises that any framework should include “standardised market products”. These should enable the “effective and non-discriminatory participation of all market participants”. The UK already uses standardised flex products, helping remove barriers to participation.
As a result of article 32, the EU commission asked the European Distribution System Operators Entity (EU DSO Entity) and the European Network of Transmission System Operators for Electricity (ENTSO-E) to produce the network code on demand response.
The overarching goal is to enable demand response and distributed energy resources, through the creation of local markets.
Although the code is still in the works, system operators would be wise to introduce that flexibility earlier rather than later. It will become a necessity before too long – not simply through regulatory obligation, but through economic ones.
Building out the grid will become increasingly expensive. Taking a long-term approach to investment in assets as well as flexibility will help ensure a more secure and resilient grid.
A market platform can help facilitate those markets while creating a straightforward way for flexibility providers to engage with flexibility.
3. Local energy planning is a driver of flexibility projects
The E.DSO – the voice of European system operators – has released an innovation brief which highlights the merits of close collaboration between cities and DSOs, to better manage local energy systems. In the past, the two have worked under different policies and regulations, meaning a mismatch in prioritisation.
Producing and consuming more variable energy locally will introduce new challenges for local authorities. New solutions are required to handle these pressures and align network planning.
The Cities for Open and Participative Planning for Electricity Grid Resilience (COPPER) initiative will therefore create local energy action plans (LEAP).
The project aims to encourage collaboration between local authorities and DSOs, through six LEAP pilot projects across the EU.
Flexibility features as a key part of the solution. One pilot running in Fredericia in Denmark aims to trial flexibility in a virtual energy community. In Ghent, Belgium, a project will also test ways to incentivise energy storage to provide flexibility services.
4. Frameworks for non-firm (flexible) connections encouraged
Non-firm or flexible connections featured in the EU’s Action Plan for Grids. The plan calls for a framework for non-firm connection agreements.
It highlights how more guidance on digitalising procedures for grid connections could help DSOs better understand where to introduce flexible connections alongside necessary grid investment.
“Where grid development may not be an economic solution, non-firm connections could be considered as a long-term solution,” shares the guidance.
This is happening in the UK. Electron is even currently working on a project to link up local flexibility markets and the network systems used to support non-firm connections: project BiTraDER.
DSOs can also consider other forms of flexibility alongside those non-firm connections. For example, flexibility market platforms like ElectronConnect can help DSOs purchase flexibility from a market.
5. Collaboration across industry stakeholders and member states is vital for developing innovative frameworks for flexibility
Projects, such as Platone and BeFLEXIBLE, focus on enhancing the flexibility of energy systems. They encourage improved co-ordination between different energy industry actors.
BeFlexible aims to enhance cooperation between DSOs and transmission system operators, to boost the flexibility in energy systems. Its goals range from increasing revenue opportunities for consumers to creating common data space exchange to support flexibility-centric business models with better information flows.
Platone is a consortium of 12 partners from four countries running six pilot. It aims to create innovative tools to help enhance visibility and system efficiencies, so that DSOs can see the full benefits of flexibility.
Projects like these can help DSOs understand how to optimise their systems for flexibility at scale from the start. They help create the right environment to encourage flexibility providers to participate and offer their energy into markets.
