Across the European Union (EU), flexibility is growing in power systems, encouraged by decarbonisation deadlines and, in 2026, an energy price shock. With an estimated €730 billion of distribution investment and €477 billion of transmission investment needed by 2040, relying on grid expansion alone is proving unsustainable.
Market-based flexibility offers a cost-effective alternative. In many cases, boosting the capacity of existing networks through demand response, storage, and distributed generation is cheaper and faster than building new power lines.
Energy flexibility or grid flexibility?
Energy flexibility balances supply and demand across the whole power system, through wholesale, balancing, and capacity markets.
Grid flexibility uses many of the same assets to free up room on specific parts of the network, easing congestion and connecting customers sooner.
Read more in Jo-Jo Hubbard’s blog on unlocking the grid.
Here are the latest updates on European flexibility markets, and seven questions shaping them in 2027.
This blog covers:
- How is the energy crisis putting demand flexibility on the emergency agenda?
- What does the EU Electrification Action Plan mean for flexibility?
- How will reforming EU network charges reward flexibility?
- How will the European Grids Package make flexible connections standard?
- What will the first national flexibility needs assessments deliver in 2027?
- Are local flexibility markets in Europe moving closer to real time?
- When will the EU Network Code on Demand Response take effect?
1. How is the energy crisis putting demand flexibility on the emergency agenda?
The 2026 energy price shock has turned demand flexibility into a short-term security tool. The Commission’s AccelerateEU plan, published in April 2026 in response to the conflict in the Middle East, lists cheaper electricity for heat pumps that offer flexibility back to the system among its measures.. It also aims to almost quadruple EU storage, from around 55GW today to 200GW by 2030.
What to watch in 2027: Winter 2026/27 will test how much demand flexibility member states can call on. Heat pump, EV, and demand-side industry groups have written to energy ministers asking for market changes so that household devices can move their consumption out of the hours when Europe leans hardest on gas.
2. What does the EU Electrification Action Plan mean for flexibility?
The Electrification Action Plan, published in July 2026, links electrifying Europe to a more flexible power system. It aims to double electricity’s share of EU energy use to 46% by 2040, and its measures include bringing heat pumps into demand response markets and treating flexible data centres as part of the answer on system costs.
What to watch in 2027: By mid-2027, the Commission is due to look at making smart charging the default in EV electricity contracts. By the end of 2027, it intends to set rules requiring new EVs to support vehicle-to-grid.
3. How will reforming EU network charges reward flexibility?
Grid tariffs are set to become one of the main price signals for flexibility in Europe. Under the Commission’s July 2026 proposal on network charges, grid tariffs would have to reward customers who cut their peak demand and reflect where on the network they connect. Tariff design couldn’t put aggregators, storage, or demand response at a disadvantage, and storage would stop paying twice for using the grid.
What to watch in 2027: Ministers aim to agree the Council’s position in December 2026, with the European Parliament’s position and final negotiations to follow.
4. How will the European Grids Package make flexible connections standard?
The European Grids Package would make flexible connections a standard option where grid capacity is short. Where a network can’t take a new connection in full, the operator would have to offer a flexible one instead, and connection queues would favour projects that are ready to build over those that applied first. Flexible connections can be curtailed when the grid is constrained. This can be either a temporary measure, until reinforcement is built, or a permanent option, where new lines are not economical.
The UK is already moving forward with this approach, operationalising it through markets. In project BiTraDER, Electron is working with SP Electricity North West, AFRY, and LCP Delta to pilot a pioneering flexibility market where participants can trade their curtailment obligations with each other.
What to watch in 2027: The European Parliament and Council are negotiating the final text, after which member states will set the practical rules in national law.
5. What will the first national flexibility needs assessments deliver in 2027?
In July 2025, ACER approved a common EU methodology for assessing non-fossil flexibility needs. Member states had to carry out national flexibility assessments by July 2026 and use them to set indicative flexibility targets by January 2027. Belgium’s Elia, for example, published its first dedicated assessment.
What to watch in 2027: National targets are due in January, and ACER will publish an EU-wide flexibility needs assessment by July 2027, with recommendations on removing barriers.
6. Are local flexibility markets in Europe moving closer to real time?
Where they are up and running, Europe’s local flexibility markets are linking up with wholesale markets and buying flexibility closer to real time. A March 2026 Commission study holds up the Dutch GOPACS platform as a leading example, and in October 2026 GOPACS launched auctions that show grid operators’ day-ahead flexibility needs on a single page for providers to bid against.
Elsewhere, European flexibility markets are more patchy. Norway’s NorFlex and Sweden’s sthlmflex ran as NODES-based projects between 2019 and 2023. France’s Enedis buys flexibility through its own tenders, and in Italy, power exchange GME runs a local market where DSOs can buy local ancillary services.
The EU’s day-ahead market has now shifted to 15-minute trading windows. With prices updating four times as often, short swings in renewable output or local demand become visible rather than lost inside hourly averages. The UK is seeing similar trends, with SSEN running day-ahead flexibility markets since late 2025.
What to watch in 2027: Since 1 November 2026, TenneT can call on flexibility held under other Dutch grid operators’ contracts, so 2027 will be the first full year of cross-operator activations.
7. When will the EU Network Code on Demand Response take effect?
The Network Code on Demand Response has not yet been adopted. ACER submitted its proposal in March 2025, and the Commission has committed to proposing a new network code in 2026 to support demand response. This code will establish the rules that allow consumers, storage providers, and distributed generation to participate directly in wholesale electricity markets. While ACER’s flexibility assessment methodology will help define what flexibility is needed, the Network Code provides the framework for delivering it.
What to watch in 2027: Once the Commission tables it, the code goes to a committee of member state representatives before it can be adopted, and each country then sets its own terms and conditions. Read our guide to the EU network code on demand response for more detail.
What will come after 2027 for EU flexibility?
EU energy ministers have started discussing possible flexibility targets for the post-2030 framework, which would build on the national targets due in January 2027. Acting without delay, as ACER urges, will bring forward the cost savings and system benefits Europe urgently needs.
See how the same pressures are playing out in our UK flexibility market developments and US grid flexibility trends blogs.
Frequently asked questions
What is a flexibility needs assessment?
A national study, required under EU electricity market rules, that estimates how much non-fossil flexibility a country’s power system needs. Member states use it to set indicative national flexibility targets.
What is the EU network code on demand response?
A proposed regulation setting harmonised rules for demand response, storage, and distributed generation to take part in electricity markets. ACER submitted it to the Commission in March 2025, and it has not yet been adopted.
What is a flexible connection agreement?
An agreement that lets a grid user connect before the network is reinforced, on the condition that they reduce imports or exports when the grid is congested.
What are local flexibility markets in Europe?
Markets where system operators buy flexibility in a specific area to manage congestion. The Dutch GOPACS platform is a leading example, and our guide to flexibility market types explains the main models.
Want to see how it works?
See how flexibility markets operate in practice, from tendering and dispatch through to settlement. Try our interactive demo
Read more
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A guide to flexibility services for UK providers
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Your guide to flexibility market types and how they work
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