Flexibility solutions to support a decarbonised and secure EU electricity system.
Date: 2023-11-08
Institutions: European Environment Agency
Subjects: EU Member State, carbon neutrality, electrical energy, energy crisis, energy grid, energy production, energy supply, energy transition, renewable energy, report

Flexibility solutions to support a decarbonised 
and secure EU electricity system

EEA/ACER Report 09/2023
EEA Report XX/2023

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ISBN 978-92-9480-603-1
DOI: 10.2800/104041

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Contents

Executive Summary 

Summary and recommendations 

1  Enhancing Europe's energy security and tackling climate change are  
compatible objectives, but delivering them requires urgent change to  
adapt the energy system 

1.1  NECPs must indicate Europe's decarbonisation trajectory 

1.2  Flexibility needs to double at pace with accelerated renewable  

rollout 

1.3  Considerable legislative effort is ongoing to tackle the flexibility  

challenge 

1.4  NECPs and national projections can become powerful tools to  

help Member States to exploit synergies with regional  
coordination on flexibility 

5

6

8

9

10

11

11

2  Smooth integration of wind and solar resources is a key challenge for  

this decade	as	we	transition	to	a	climate‑compatible	energy	system	 12

2.1  Variable renewables are the fastest growing electricity sources  12

2.2  Understanding the dynamics between demand and variable  

renewable energy sources is key for the future of the power system  13

2.3  By 2030, flexibility needs will double in a European electricity  

system dominated by renewables 

3	 Promising	climate‑compatible	flexibility	solutions	exist.	Key	ones	 
for this decade include demand response, energy storage and  
enhanced interconnection	

3.2  Demand response must become a key actor in a future energy  

system dominated by variable renewable energy sources 

3.3  Energy system integration increases flexibility and supports  

the decarbonisation of end-use 

4	 All‑hands‑on‑deck	and	leverage	complementarity	across	borders	—	a	 
broad mix of resources and supportive policies is needed to handle  
the flexibility	challenge	

4.1  Flexibility is needed across all timeframes 

4.2  Flexibility needs point to the role of interconnectors as enablers  

of cross-border flexibility  

4.3  Strong political commitment and coordination is key 

References 	

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20

25

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Flexibility solutions to support a decarbonised and secure EU electricity system 
 
 
 
 
 
 
	
 
 
 
	
 
 
 
	
 
Contents

© Desmond McCormack, Climate Change PIX /EEA

4

Flexibility solutions to support a decarbonised and secure EU electricity system Executive Summary

This decade will see significant decarbonisation of the EU electricity supply. Brave 
changes are happening, driven by the expected rapid roll-out of wind and solar power 
generation in all Member States in response to the Russian war of aggression against 
Ukraine and Europe's commitment to become a 'net-zero' emissions continent by 
2050 (expressed in the 'Fit-for-55' and the forthcoming EU climate target for 2040) (1). 

Member States' latest 10-year national energy and climate plans, being submitted 
to the European Commission (EC) at the time of writing this paper, suggest a 
remarkable, often triple-digit, planned growth in use of these two renewable energy 
sources in some countries. Renewable electricity generation must double by 2030. 
To manage weather-dependent output, the energy system must provide adequate 
flexibility resources at scale from both the demand and supply side.

Flexibility is the EU power system’s ability to adjust to 

the fluctuating generation and consumption of energy.

Delivering the energy transition effectively will require systemic, efficient and fair 
improvement across the whole energy system. This analysis by the European 
Environment Agency (EEA) and the EU Agency for the Cooperation of Energy 
Regulators (ACER) sketches out key elements of the flexibility challenge (a doubling 
of flexibility is needed by 2030) in an increasingly decarbonised EU power system. 
It identifies key flexibility levers. It calls for Member States to assess and unlock 
the potential of flexibility resources such as demand response. It sees scope for 
an important new role for the NECPs, alongside biennial national greenhouse gas 
emission projections with more complete energy parameters, as useful tools for 
regional cooperation to better forecast and meet Member States' flexibility needs. It 
points to the important role of interconnectors in enabling flexibility solutions across 
borders. It suggests that policy-makers coordinate their approaches assessing and 
utilising all flexibility levers across borders, where appropriate. Its main findings are 
summarised in the box below.

(1)  To be proposed by the European Commission (EC) in 2024.

5

Flexibility solutions to support a decarbonised and secure EU electricity systemSummary and recommendations

1.  Enhancing Europe's energy security and tackling climate change are compatible objectives but delivering 

them requires urgent changes to adapt the energy system. The involvement of EU and national policy-makers, 
regulators, energy grid operators and users will be key. 

2.  Accelerating the rollout of renewables is needed yet it also brings challenges. The energy system must adapt at 

scale to provide adequate flexibility resources (from both the demand and supply side) to adjust to fluctuating 
renewable electricity supply. Today, much of the flexibility that backs up renewables is sourced from fossil fuels. 

3.  The flexibility challenge is significant- double today's flexibility is needed by 2030- requiring a broad mix of (clean) 
flexible resource and supportive policies. The ramp up in flexibility needs to match the ramp up in renewables.

What is the solution?

a.  Renewables bring the dual benefit of mitigating climate change and simultaneously enhancing Europe's 

energy independence. 

b.  Very promising and climate-friendly flexibility resources exist (e.g. demand response or energy storage) and 

must be further unlocked. 

c.  Europe's interconnected power system is also part of the solution, enabling flexibility — and renewables — to 

be procured across borders.

d.  A more coordinated 'all-hands-on-deck' approach to have complementary national assessments of flexibility 

needs and common policies across borders can bring extended benefits. 

e.  Europe's energy system has to change in at least two major ways: 

6

Flexibility solutions to support a decarbonised and secure EU electricity system• 

Use coordinated planning and operation of the energy system to manage decarbonisation and security of supply 
at the same time: 

• 

• 

• 

Regularly assess the flexibility needs of the power system at the EU level and deepen the coordination on 
the national approaches via Member States' National Energy and Climate Plans (NECPs) and the national 
greenhouse gas projections in biennial progress reporting. There is scope for NECPs and projections to 
develop on regional cooperation to help Member States better meet their flexibilty needs.

Share electricity more broadly by expanding cross-border transmission capacities and improving the 
operation of interconnected systems and markets.

Optimise electrification across all sectors of the economy such as buildings and transport, and enhance 
opportunities for energy storage. Direct electrification with renewables is one of the most efficient ways to 
decarbonise demand.

• 

Create incentives for consumers to actively adapt their consumption when needed and for storage to be 
operated dynamically. Further: 

•  Maximise the potential offered by market signals and cost reflective network charges to enable consumers 

from all sectors to financially benefit from changing their consumption patterns. 

• 

• 

Dismantle barriers to entry and create supportive investment frameworks to enable small, climate-compatible 
flexibility resources to participate in all electricity markets on an equal footing with traditional centralised 
sources of flexibility.

Improve the provision of information to households and small businesses to help them overcome 
increasingly complex energy offers, including on energy efficiency, and take suitable and informed decisions.

7

Flexibility solutions to support a decarbonised and secure EU electricity system1  Enhancing Europe's energy security and tackling    
climate change are compatible objectives, but  
delivering them requires urgent change to adapt    
the energy system

The EU and its Member States are moving towards a climate-neutral future. Until 
recently, the focus has primarily been on the approaching 2030 milestone to reduce 
the EU's greenhouse gas emissions by 55% compared with 1990 levels. However, 
Europe is responding to Russia's invasion of Ukraine with a faster and more profound 
energy transition: decarbonising all sectors, saving energy and accelerating the 
shift towards home-grown renewable energy sources. At the same time, EU energy 
market integration — exemplified by increased interconnection and enhanced 
cross-border capacities — has played a crucial role in mitigating price spikes and 
security-of-supply issues at national level (ACER, 2023a).

Using renewable energy makes energy bills more affordable, cuts reliance on energy 
imports and mitigates climate change and other health and environmental impacts 
linked to fossil fuels (EEA, 2023d). The EU has committed to increasing its use of 
renewable energy to a minimum of 42.5% (and possibly up to 45%) by 2030 (Council 
of the European Union, 2023).

Ramping up renewables offers a dual benefit: meeting 

the EU's climate targets and simultaneously enhancing 

energy independence.

EU policies and research emphasise the ability of electrification from renewables to 
decrease carbon emissions in key energy end-uses, such as heating and transport 
(EC, 2021a; Clarke et al., 2023; EEA, 2023a). This will require renewable electricity 
generation to grow rapidly, from 37% in 2021 to 69% or more by 2030 (EC, 2022a) (2). 
Europe is well endowed with domestic renewable electricity potential. Ramping up the 
integration of renewables into the energy system de facto offers a dual benefit: meeting 
the EU's climate targets and simultaneously enhancing energy independence and 
strategic autonomy. However, the fact that a quick integration of renewables into the 
system is beneficial for society does not mean it comes without challenges including 
having sufficient flexibility resources to make up for high/low renewable supply 
(see Box 1).

(2)  By 2030, the EU target objective is to increase renewable supply to 69% of all electricity generation in accordance with REPowerEU (i.e. by four 

percentage points more than initially foreseen in the European Green Deal).

8

Flexibility solutions to support a decarbonised and secure EU electricity system 
 
 
 
Enhancing Europe`s energy security and tackling climate change are compatible objectives

Box 1

The flexibility challenge

Increasingly, climate-compatible resources like demand response, batteries and other 
solutions will be needed to meet growing flexibility needs. The task ahead is to facilitate 
the switch to these low-carbon flexibility solutions at a pace that keeps up with the 
acceleration in renewable generation build-out.

Against this background, there is considerable value in assessing future flexibility needs 
across Member States and in leveraging solutions to meet such needs also from a 
cross-border perspective, building on the EU's vast internal energy market.

Alongside the NECPs, biennial greenhouse gas emission projections with more 
complete energy parameters can help to forecast flexibility needs and available 
resources.

1.1 

NECPs must indicate Europe's decarbonisation trajectory

The EU's ambitious climate and energy goals are translated by Member States 
into commitments at the national level through their national energy and climate 
plans (NECPs). Based on the trajectories provided by governments in their NECPs 
and the greenhouse gas projections and energy parameters reported in their biennial 
national progress reports, the EC periodically monitors the progress made towards 
achieving these goals under the EU governance regulation, an exercise involving the 
EEA in the collection, compilation and quality assurance of key progress-reporting 
data (European Parliament and Council, 2018a). By June 2023, Member States had to 
submit to the EC draft NECPs,  adapting their commitments to meet higher common 
targets for 2030 and aiming to diversify climate-compatible energy sources while 
tackling energy security and affordability issues. The Russian war of aggression 
against Ukraine and the recent energy crisis renders Member States' updating of the 
NECPs both relevant and timely.

Some of the submitted draft NECPs indicate that major changes are under way in 
the national electricity mixes (see Box 2). They confirm solar and wind energy — two 
variable renewable electricity (VRE) sources governed by weather conditions — as 
the decade's fastest-growing electricity sources. With this clean energy transition 
in progress, boosting the flexibility of the EU power system to ensure a secure 
and sufficient energy supply and minimise the risk of power outages (or costly 
curtailment) becomes essential.

9

Flexibility solutions to support a decarbonised and secure EU electricity systemEnhancing Europe`s energy security and tackling climate change are compatible objectives

Box 2

Planned decarbonisation paths in the 2023 draft NECPs

NECPs should inform the ways to tackle the flexibility challenge.

Many submitted draft NECPs show high ambitions to further scale up renewable 
energy deployment. For example, the planned shares of renewable energy sources in 
final energy consumption increase approximately twofold in Estonia (rise of 117%), 
Italy (99%) and Spain (128%).

The share of renewable energy technologies changes too, with some Member States 
envisioning rapid solar energy expansion narrowing the difference with wind power 
installations. For example, by 2030, solar power output will surpass wind generation in 
Italy (proportion of 3:2) and reach parity with wind generation in Spain.

Alongside the NECPs, biennial greenhouse gas emission projections with more 
complete energy parameters can help to forecast flexibility needs and available 
resources.

Today, the electricity system meets flexibility 

needs mainly through fossil-based dispatchable 

electricity generation.

1.2 

Flexibility needs to double at pace with accelerated renewable rollout

This EEA/ACER assessment finds that flexibility needs will double by 2030. Both 
demand and supply must react to changing conditions to keep the system constantly 
in balance, particularly when fluctuating solar and wind generation is too low (or too 
high) compared with demand.

Today, the electricity system meets flexibility needs mainly through fossil-based 
dispatchable electricity generation. However, the operation of such units results in 
significant greenhouse gas and air pollutant emissions (EEA, 2022a, 2023b, 2023c), 
meaning they are increasingly incompatible with the EU's greenhouse gas target for 
2030 and climate neutrality objective for 2050. At the same time, a rising share of EU 
gas supplies sourced from abroad in the form of liquified natural gas poses a risk of 
becoming subject to enhanced volatility per global market dynamics (ACER, 2023d).

By 2030, flexibility needs will double compared to today.

1.3	

Considerable	legislative	effort	is	ongoing	to	tackle	the	flexibility	challenge

Europe's 2019 clean energy package (CEP) granted consumers the right to access 
all electricity markets and be remunerated for their flexibility, but Member States are 
still to implement such provisions in national legislation, as also shown elsewhere. 
On the basis of ACER's preparatory work, system operators are currently drafting 
a regulatory proposal on demand-side flexibility. The new rules aim at facilitating 
the market participation of demand response, storage and distributed generation. 
After ACER's revision, the draft will be submitted to the EC towards the end of 2024. 

10

Flexibility solutions to support a decarbonised and secure EU electricity systemEnhancing Europe`s energy security and tackling climate change are compatible objectives

The EC's legislative proposal on the electricity market design, tabled in March 2023, 
considers changes both in the market design and in the supportive framework 
(EC, 2023). For example, it introduces flexibility support schemes, improves the 
liquidity of forward markets and strengthens short-term markets, where resources 
can adjust in as close to real time as possible.

More flexible resources are needed from both the 

demand and supply side.

While acknowledging the role of Europe's integrated electricity markets for 
renewables and flexibility resources to flow across borders and meet EU 
consumers' needs, this paper does not delve into the details of EU electricity 
market design. Nor are other enabling efforts — ranging from further EU-wide 
carbon pricing instruments to decarbonise heating and transport (3) to efforts 
to empower citizens to participate in local energy communities and source raw 
materials sustainably — considered in detail (see e.g. Box 3). These topics require 
dedicated investigation.

Box 3

Beyond the flexibility challenge 

The rapid renewable electrification also relates to concerns regarding:

• 
• 
• 
• 

 system operation (e.g. decreasing inertia);
 raw material availability;
 recyclability of technologies;
 impacts on ecosystems (e.g. land use).

These considerations merit a dedicated debate and are outside the scope of this paper.

1.4 

NECPs and national projections can become powerful tools to help Member 
States	to	exploit	synergies	with	regional	coordination	on	flexibility

The NECPs and greenhouse gas emission projections in the biennial national progress 
reports, as governance mechanisms, have the potential to become even more 
functional (as underscored by several responses in the recent consultation on the 
functioning of the climate and energy governance framework). NECPs can turn into a 
powerful tool helping Member States consider developments in their region and make 
informed policy choices that exploit synergies and reinforce regional cooperation. 
Alongside the NECPs, more comprehensive and complete national greenhouse gas 
emission projections, particularly in relation to energy parameters, can bolster coherent 
future climate and energy planning and cross-border cooperation. 

This paper argues that the EU can do more to prepare the energy system for today's 
decarbonisation challenge by taking advantage of the internal energy market via 
enhanced interconnectors and by ramping-up demand response. This can be achieved 
by leveraging the existing coordination mechanisms under the governance regulation, 
such as the NECPs and the biennial national greenhouse gas emission projections in 
the progress reports, and by proactively scanning the future through flexibility needs 
assessments, thus informing Member States' choices and approaches.

(3)  Under the new EU emissions trading scheme from 2027 onwards.

11

Flexibility solutions to support a decarbonised and secure EU electricity system2  Smooth integration of wind and solar resources is  
a key challenge for this decade as we transition  
to a climate‑compatible energy system

2.1 

Variable renewables are the fastest growing electricity sources

Over the past decade, solar and wind energy, two VRE sources, have become 
cost-competitive across several European markets, even without subsidies (4) (EEA, 
2022b). At the EU level, from 2010 to 2022, the share of solar and wind power in all 
renewable electricity generation increased from 24% to 60%, while the corresponding 
capacity increased more than three-fold. The use of nuclear and dispatchable fossil 
generation decreased by around one quarter over this period. At the same time, and despite 
the remarkable change in the generation mix, demand remained largely inflexible (see 
Section 3.2).

Figure 1 

Electricity generation in the EU-27 by source

Percentage

100

90

80

70

60

50

40

30

20

10

1%

0

49%

29%

17%

5%

2010

39%

22%

16%

15%

7%

2022

19%

16%

17%

34%

14%

2030

Variable renewable 
energy source - solar

Variable renewable
energy source - wind

Dispatchable 
renewable energy 
sources

Nuclear

Fossil fuels

Notes: 

Dispatchable renewable energy sources includes hydropower, bioenergy, and other renewables.

Source: 

Ramboll, based on generation and demand data combined with historical hourly profiles from 
the ENTSO-E transparency platform (ENTSO-E, 2022); and 2030 annual values from the policy 
scenarios for delivering the European Green Deal (EC, 2021b). 

(4)  From 2010 to 2021, global levelised costs of electricity generation fell by 85% for solar photovoltaic, 56% for onshore wind and 45% for offshore wind 

power (IRENA, 2022).

12

Flexibility solutions to support a decarbonised and secure EU electricity system 
 
 
Smooth integration of wind and solar resources is a key challenge for this decade

In 2022, VRE sources contributed around 22% of all EU electricity supply and 
represented 35% of all installed capacity. The expansion of VRE generation was 
partly influenced by the widespread deployment of distributed energy resources (5). 
These are units connected to lower voltage levels, such as rooftop solar panels 
or behind-the-meter electricity storage, which are typically easier to develop than 
traditional centralised resources.

Some of the most recent decarbonisation scenarios estimate VRE generation to 
supply almost 50% of gross electricity production by 2030 (EC, 2021b; see Figure 1). 
In practice, this would require VRE generation to increase by 111 TWh every year, on 
average — almost three times as much as the average annual VRE growth recorded 
between 2010 and 2022 (+38 TWh per year). Despite several challenges, recent 
experience indicates that such an increase is achievable. Solar and wind generation 
across the EU has increased by an estimated 230 TWh between 2021 and 2023, 
much of which is thanks to measures that EU countries have implemented since 
Russia's invasion of Ukraine (IEA, 2023a).

Based on the background study supporting this analysis (6), the rest of this chapter 
explains the consequences of oversupply- and undersupply of VRE, compared with 
demand, and discusses the flexibility needs stemming from it.

2.2 

Understanding the dynamics between demand and variable renewable 
energy sources is key for the future of the power systems

As the share of VRE generation more than doubles this decade (see Figure 1), its 
effect on the supply-demand dynamic becomes crucial. Therefore, analysing the 
difference between electricity demand and VRE supply, known as the 'residual 
demand', provides useful insights. Governed by weather, VRE supply today is often 
not able to meet demand on its own, giving rise to a VRE deficit, also known as a 
'positive residual demand'. Although less frequent, at times, VRE excess will surpass 
demand, leading to a 'negative residual demand' situation. These two situations are 
illustrated in Figure 2. 

(5)  Distributed energy resources are directly connected to the distribution grid. These include small generation plant (e.g. roof-top solar), energy storage 
(small scale batteries) and controllable loads such as electric vehicles (EVs), heat pumps or households (demand) response. An aggregator can 
bundle their load (demand) together so jointly they provide flexibility to the system. 

(6)  Unless indicated otherwise, findings are based on Ramboll's study Flexibility solutions to support a decarbonised and secure EU electricity system, which 
was commissioned by the EEA and to which the EEA Topic Centre on Climate Change Mitigation and Energy and ACER provided input and expert advice.

13

Flexibility solutions to support a decarbonised and secure EU electricity systemSmooth integration of wind and solar resources is a key challenge for this decade

Figure 2 

Residual demand scenarios

Positive residual demand — VRE deficit

Negative residual demand — VRE excess

Lower the demand

Import from neighbours

Release stored energy

Increase generation

Notes: 

Increase the demand

Export to neighbours

Store excess energy

SUPPLY

DEMAND

SUPPLY

DEMAND

Reduce generation

In a decarbonised electricity system, positive and negative residual demand should be met with 
non-carbon resources such as demand response, storage, dispatchable renewables and cross-border 
resource-sharing. This analysis can be further refined by subtracting non-dispatchable conventional 
must-run generation (e.g. combined heat and power plants) from the demand. Must-run generation 
can fill VRE deficit gaps, thus reducing flexibility needs in those hours, but it can also potentially run in 
hours of VRE excess, hence increasing flexibility needs.

Source: 

EEA/ACER. 

During VRE deficits, demand is met by increasing controllable (today mostly 
gas-fired) generation, reducing demand, importing lower-cost generation from other 
market zones or discharging stored energy to the grid. Conversely, during VRE excess 
situations, excess is managed by exporting VRE generation to other market zones, 
increasing demand (e.g. power-to-X solutions), charging storages from the grid, 
decreasing controllable generation or, as a last resort, curtailing VRE generation.

Price signals in the coupled European short-term markets can effectively and 
continuously inform producers and consumers of the amount of VRE in the 
interconnected system. If, in a given period, VRE generation grows, prices decline, as 
higher-cost marginal resources are squeezed out by low-cost generation from renewable 
sources. During VRE excess, prices can even turn negative, as demand cannot soak 
up surplus supply, while some of the inflexible thermal generators cannot ramp down 
quickly enough. In the longer term, the fluctuating price levels inform about VRE excess 
and deficit situations and will trigger investment and innovation in flexibility resources.

Between 2021 and 2030, due to the rapid growth in VRE generation, VRE excess 
could increase from 0.2 TWh/year to 118 TWh/year — the latter being equivalent to 
the annual generation of 19 baseload thermal power plants (7) or nearly double the 
total electricity consumption of Austria in 2022. In situations of high wind and solar 
radiation, the surplus renewable energy can be utilised to charge electric vehicles and 
batteries, supply efficient and clean heat to buildings, produce renewable hydrogen or 
share electricity with neighbouring countries via interconnectors. VRE excess would be 
even higher (+133 TWh/year) if interconnectors did not spread it across borders, thus 
helping to avoid the likely curtailment of variable renewable production (i.e. equalling 
the annual generation from 21 baseload power plants, or equivalent to the total 
electricity consumption of Sweden in 2022). In the situation of VRE deficit, demand 

(7)  An 800 MW power plant block running in 90% of the hours of the year was taken as the indicative reference.

14

Flexibility solutions to support a decarbonised and secure EU electricity system 
Smooth integration of wind and solar resources is a key challenge for this decade

reduction becomes particularly effective. A reduction similar to the energy saving 
measures (8) introduced in the winter of 2022/2023 would mitigate the VRE deficit by 
231 TWh/year, which is equal to the annual output of 37 baseload thermal power plants 
or the total electricity consumption of Spain in 2022 (ENTSO-E, 2022).

In the future, VRE deficit situations will become central to resource planning, as, if not 
managed properly, they represent a risk to the security of supply. Fortunately, due to the 
rapid growth of VRE, the European annual VRE deficit is shrinking considerably (see the 
green arrows in Figure 3). This means that, from 2021 to 2030, the need for non-VRE 
generation is expected to shrink considerably in most hours, in total by almost half (46%), 
equivalent to the annual generation of 182 baseload thermal power plants.

However, despite the considerable decrease in the need for non-VRE generation on 
average, high VRE deficit situations are here to stay (see the red box in Figure 3). 
These situations correspond to a limited number of hours in a year when VRE 
generation, relative to demand, is very low.

All in all, there is a very small number of hours in a year when a significant amount 
of flexibility resources will still be needed to fill in for the missing VRE generation. 
Flexibility needs will thus transform from a 'high capacity - high volume' situation (fit for 
gas generators) to a 'high capacity - low volume' situation, which can also increasingly 
be handled by new carbon-free approaches.

Figure 3 
VRE deficit (GW)

Average European duration curve of VRE deficit hours in 2021 and 2030

450

375

300

225

150

75

0

0

2021

2030 Projections

20

40

60

80

100

Percentage of hours with deficit in the year

Note: 

The analysis was performed for interconnected ENTSO-E member countries.

Source: 

Ramboll, based on hourly generation and demand data combined with historical hourly profiles 
from the ENTSO-E transparency platform (ENTSO-E, 2022); and 2030 annual values from the 
policy scenarios for delivering the European Green Deal (European Commission, 2021b). 

(8)  The analysis considered 10% of demand savings in non-peak hours without VRE excess and 5% in peak hours shiftable to hours of VRE excess 

before the following peak-hour period. This assumption was inspired by the targets set in Council Regulation (EU) 2022/1854 of 6 October 2022 on 
an emergency intervention to address high energy prices (OJ L 261, 7.10.2022, p. 1).

15

Flexibility solutions to support a decarbonised and secure EU electricity systemSmooth integration of wind and solar resources is a key challenge for this decade

Demand response (peak shaving, demand shifting) and other flexibility resources such 
as storage will need to cover these peak events. However, without taking an integrated 
approach and adapting market conditions to unlock these flexibility resources, the current 
operating model could pose challenges to their profitability and deployment (for more 
information, see Chapter 3). Moreover, existing national policies and measures may not 
fully harness or recognise the benefits of demand response and savings, potentially leading 
to the underutilisation of these tools. According to the policy scenarios for delivering the 
European Green Deal, from 2022 to 2030, EU electricity consumption should increase by 
13% in all scenarios (EC, 2021b) (9). Yet, according to EEA calculations based on the first 
national progress report submissions under the governance regulation, nationally adopted 
policy measures will increase EU generation by 19% by 2030 (EEA, 2023d, forthcoming) (10).

This section has provided an overall static view: hours with VRE excess and deficit. 
Section 2.3 will add the time element to the picture. Fluctuations in VRE generation 
put stress on the system. Therefore, flexibility resources will need to follow these 
swings to keep the system in balance.

2.3	

By	2030,	flexibility	needs	will	double	in	a	European	electricity	system	
dominated by renewables

Residual demand varies over time, alternating between moments of VRE excess and 
deficit. This variability of VRE generation relative to demand has to be cushioned with 
flexibility resources (see Box 4).

This section focuses on three flexibility (11) time frames to capture the fluctuations, 
or cycles of demand and VRE generation: daily, weekly and seasonal flexibility, as 
summarised in Figure 4. 

Figure 4 

Graphical representation of demand and supply patterns affecting daily, 
weekly and seasonal flexibility needs

Daily flexibility

Weekly flexibility

Seasonal flexibility

Morning and evening demand peaks

Weekday-weekend demand difference

Day-night generation difference

Wind pattern fluctuations

Heating-cooling periods

Seasonal weather patterns

Source: 

EEA/ACER.

(9)  Solar and wind power increase significantly, driven by direct electrification of end-uses, while overall the EU will reduce its levels of primary and final 

energy consumption in absolute terms through energy efficiency improvements (EC, 2021b).

(10)  Based on the national greenhouse gas projections with existing policies and measures submitted by the countries in 2023, electricity generation will 

increase to roughly 3 330 TWh by 2030 at the EU level, representing a 19% increase over 2021. More extensive reporting of energy parameters as part of 
these projections would greatly facilitate predicting the increase in VRE supply with implemented and additional national policies and measures. In turn, 
this would inform decisions on actions to meet policy targets (Goodwin et al., 2018).

(11)  Residual demand variability is the metric used to quantify flexibility needs. The variability is calculated as the difference between residual demand and 

its average over time, following the methodology from EC, Directorate-General for Energy (2019).

16

Flexibility solutions to support a decarbonised and secure EU electricity system 
Smooth integration of wind and solar resources is a key challenge for this decade

Box 4

Flexibility

'Flexibility' means the interconnected EU power system's ability to manage, with all 
its connected resources, the variability and uncertainty of electricity generation and 
consumption patterns across relevant time frames.

By 2030, the electricity system in Europe will need more than twice the current amount 
of flexibility resources to keep up with changing needs. The demand for flexibility 
will increase sharply on daily (2.4-fold), weekly (1.8-fold) and annual (1.3-fold) bases, 
compared with 2021 (see Figure 5) (12).

Figure 5 

Daily, weekly and seasonal flexibility needs in 2021 and 2030 in Europe

362

242

168

153

137

132

TWh

400

350

300

250

200

150

100

50

0

2021

2030

Daily flexibility needs

Weekly flexibility needs

Seasonal flexibility needs

Notes: 

The 2030 results correspond to the average simulation results under the scenarios considering 
existing and planned interconnectors and no demand-saving and demand-shifting measures. 
More VRE deficit hours than VRE excess hours are expected by 2030, so the subtraction of 
must-run generation would probably reduce the flexibility needs estimated in this paper. 

The analysis was performed for interconnected ENTSO-E member countries.

Source: 

Ramboll, based on hourly generation and demand data combined with historical hourly profiles 
from the ENTSO-E transparency platform (ENTSO-E, 2022); and 2030 annual data from the policy 
scenarios for delivering the European Green Deal (EC, 2021b).

(12)  Recent assessments consistently point to a substantial growth in flexibility needs by 2030 and beyond. Estimations may, however, differ due to 

differences in modelling choices, including the approach to residual demand calculation, scenario assumptions and modelling the impact of demand 
response.

17

Flexibility solutions to support a decarbonised and secure EU electricity system 
Smooth integration of wind and solar resources is a key challenge for this decade

The higher short-term flexibility needs suggested by this analysis reflect the 
observation that VRE intermittence is greater at a higher temporal granularity, 
especially for solar power, affected by the ever-fluctuating motion of clouds 
and weather systems. Using a longer time frame, however, residual demand is 
smoothened thanks to, for example, the seasonal complementarity of wind and solar 
supply, or the higher wind production aligning with the higher electricity demand in 
winter (for more information, see Section 3.1). Moreover, different VRE technologies 
call for varying levels of flexibility. A significant deployment of solar generation (see 
Box 2) is bound to result in more substantial flexibility needs (most notably, daily 
flexibility) than an equivalent growth in wind generation (JRC, 2023). Yet meaningfully 
combining both technologies as part of integrated generation profiles has important 
flexibility benefits, as shown in Section 3.1.

In absolute terms, flexibility needs are expected to triple between 2030 and 2050; 
still, in relative terms - compared with the demand - growth is expected to slow down 
(JRC, 2023). This indicates that today the primary driver is the changing energy mix, 
whereas, in the next decade, electrification will become the main force behind the 
growing need for flexibility resources. 

Thus, to meet the challenge of today and scale up 

appropriately in the next decade, the EU electricity 

system must be equipped with a well-designed and 

properly incentivised mix of flexibility solutions, 

starting now.

Chapter 3 outlines the supply, demand and infrastructure flexibility solutions needed 
to cope with fluctuations in VRE supply over different time frames. It also highlights 
that the system requires a combination of decentralised elements, such as demand 
response or distributed generation, and centralised elements, not least more ample 
offshore projects and interconnectors linking Member States and regional renewable 
hubs to make the most of the renewable resources on the continent.

18

Flexibility solutions to support a decarbonised and secure EU electricity systemSmooth integration of wind and solar resources is a key challenge for this decade

© Diego PH on Unsplash

19

Flexibility solutions to support a decarbonised and secure EU electricity system3  Promising climate-compatible flexibility solutions  
exist. Key ones for this decade include demand  
response, energy storage and enhanced    
interconnection

As discussed in Section 2.3, solar and wind resources have varying generation 
profiles over different time frames. These profiles tend to complement each other 
on daily and seasonal bases. Wind generation is likely to peak during the night-time 
and in winter, while sun is likely to peak during the daytime and in summer. Moreover, 
differences in climatic (wind and solar irradiation) patterns across the EU become 
more pronounced with increasing distances between regions. Therefore, combining 
VRE technologies and sharing their outputs across geographies will smoothen the 
overall supply (Figure 6).

Figure 6 

Illustrative representation of the technological and geographical 
complementarity effects

Technological 
complementarity

Combining
renewable technologies

Geographical 
complementarity

Combining renewables 
from different geographies

↓ Variability

Higher reliability and availability

↑ Minimum generation

Technological complementarity refers to combining, including on a project and local 
level, solar and wind generation profiles with different peak and valley times. The 
outcome is a smoother, less variable generation than that of individual technology 
profiles. This lowers the needs for flexibility resources to cover the gap between 
generation from variable renewables and demand. Combining wind and solar 
electricity supply can reduce short-term generation variability by up to around 30% (13). 

(13)  Measured as the standard deviation of hourly time series for aggregated VREs compared with the standard deviation of individual technologies.

20

Flexibility solutions to support a decarbonised and secure EU electricity system 
 
 
 
 
 
Promising climate‑compatible flexibility solutions exist

When considering seasons, the diverging patterns of solar and wind generation in 
Europe affirm their complementary nature (14). As an example, in the continental 
climate with warm summers, the combined monthly generation from wind and 
photovoltaic never falls below 85% of their peak (IEA, 2023b). Ultimately, electrical 
systems combining both wind and solar technologies enable up to 20% higher 
renewable energy deployment than the separate deployment of these technologies 
(Solomon. A. et al., 2020; Couto and Estanqueiro, 2020). 

Box 5

Dunkelflaute

Dunkelflaute or 'dark doldrum' (a) indicates a meteorological condition when little or no 
energy can be generated using wind and solar power for a whole day or longer. Such 
events are difficult to predict but put large stress on a decarbonised energy system. 
Fortunately, they are mostly localised in specific regions and hardly ever occur on larger 
geographic scales. While Dunkelflaute periods can persist in individual countries, they 
have not happened at the European level in the analysed 2015-2021 period.

       Notes:  (a) Defined as periods when wind and solar generation present a capacity factor (electricity 

generation / theoretical maximum as per rated power) below 20% for at least 24 successive hours. 

Geographical complementarity relies on two critical elements: the varying wind 
patterns across Europe and the divergent wind and solar generation potential in 
different countries. The benefits associated with complementarity can best be 
harnessed by fostering interconnectivity in the European electricity market and 
addressing internal congestions, both by the development of new projects and by 
enhancing the use of existing lines (ACER, 2023b).

As a simplified example, one could group countries based on wind energy potential 
in a way that sharing across clusters offers the most benefit. Recognising the 
opportunities to maximise geographical complementarity between regions may 
help, for example, to prioritise the development of optimal trans-European energy 
corridors (see Figure 7).

(14)  The average decorrelation between solar and wind generation is as strong as -0.85.

21

Flexibility solutions to support a decarbonised and secure EU electricity system 
Promising climate‑compatible flexibility solutions exist

Figure 7 

Illustrative wind energy clusters identified in Europe — high correlation 
within the clusters and low correlation across them

0.55

0.32

0.65

0.64

0.14

0.65

0.28

0.20

0.07

0.72

0.08

0.62

0.07

0.02

0.57

0.05

0.69

0.69

Iberia

Continental Europe Centre

Continental Europe North West

British Isles

Baltic countries

Italy and the Balkans

Continental Europe East

Scandinavia

Continental Europe North

Notes: 

Based on historical wind generation profiles at the Member State level (not directly on wind 
patterns). Grey-coloured countries are those for which a cluster has not been identified or adding 
them to existing clusters significantly reduced the cluster's average correlation. The map is merely 
illustrative; multiple factors, including renewable developments (e.g. offshore wind deployment), 
could alter the picture. 

The analysis was performed for interconnected ENTSO-E member countries.

Source: 

Ramboll, based on hourly generation data from the ENTSO-E transparency platform (ENTSO-E, 2022). 

A recent analysis undertaken for regional forums suggests similar insights, arguing 
that sharing renewable resources among well-interconnected Member States 
enhances the certainty of availability (see Box 6) (Penta, 2023). By looking beyond 
national borders, Europe can always count on a minimum VRE output, as roughly 
10% of the total VRE capacity will be producing at all times (see the dashed yellow 
line in Figure 8). The European aggregate output is also more stable, producing 
between 30% and 60% of the maximum generation around half of the time (see the 
solid yellow line in Figure 8), than the varying output in individual countries (depicted 
by the green area in Figure 8). Moreover, at the EU level, there will be fewer VRE 
production spikes that could lead to curtailment of renewable generation.

22

Flexibility solutions to support a decarbonised and secure EU electricity system 
Promising climate‑compatible flexibility solutions exist

Figure 8 

Duration curves of VRE generation in Europe in 2021

Variable renewable electricity (percentage of annual maximum hourly generation)  

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

Hours of the year (percentage of annual hours)

Maximum-minimum

Europe

Europe minimum in 99.9% of the time
(in the interconnected system)

Notes: 

The solid yellow line depicts the aggregated European VRE generation duration curve 
(hourly generation arranged from the lowest to the highest). The shaded area represents the 
minimum-maximum range of all individual countries. 

The analysis was performed for interconnected ENTSO-E member countries.

Source: 

Ramboll, based on hourly generation data from the ENTSO-E transparency platform (ENTSO-E, 2022).

These complementarity results are based on actual observed historical figures. Other 
studies using hypothetical scenarios suggest that there is an optimal combination of 
solar and wind generation that maximises complementarity and minimises the need 
for additional flexibility resources (Weitemeyer et al., 2014). This optimal resource 
mix may be different at the national level than at the regional or EU level if accounting 
for sharing resources across borders. For example, a study by a transmission system 
operator found that two-thirds wind and one-third solar generation would be optimal in 
northern Europe to avoid a structural, season-long mismatch between electricity supply 
and demand (Elia Group, 2021). The solar-to-wind ratios are also key to determining the 
adequate mix of flexibility resources, given that certain technologies are more suitable 
to balancing solar fluctuations than balancing wind and vice versa (Gils et al., 2017).

The implications of the envisaged solar and wind capacity developments also 
point to the crucial role of coherent and consistent, integrated climate and energy 
planning, which Member States are encouraged to undertake by the EU governance 
regulation framework. This should entail formulating strategies with both national and 
regional perspectives under the NECP mechanism and exploring relevant synergies 
and possibilities of cooperation, including in the context of the high-level energy 
infrastructure groups. Moreover, the biennially updated greenhouse gas emission 
projections and energy parameters reported by countries through progress reports 
under the governance regulation can also help to make informed strategic decisions, 
especially where such tools are grounded in more robust and complete energy data.

23

Flexibility solutions to support a decarbonised and secure EU electricity system 
Promising climate‑compatible flexibility solutions exist

Box 6

Recent analysis from the Pentalateral Energy Forum shows the contribution of 
interconnectors for flexibility and the benefit of assessing flexibility needs regionally, 
not just nationally

The study, conducted on behalf of a group of Member States, suggests that regional 
cooperation is a key enabler of the cost-efficient integration of renewable energy by 
maximising the potential of local flexibility resources, such as hydropower in the Alps 
region. Therefore, system operators should maximise the availability of interconnectors 
across all market time frames, while significant additional investments into 
cross-border infrastructure will still be needed.

To date, EU policies encourage countries to cooperate on renewable energy across 
borders. Since 2009, countries have been able to engage in joint renewable energy 
project development (15) and operation, open national support schemes for mutual 
co-funding (16) (to accelerate renewable energy production in their territories) and buy and 
sell renewable energy from each other using a system of statistical transfers. To help 
renewable energy cooperation take off, the EC has also issued guidance on the sharing 
of costs and benefits (EC, 2022b). However, despite such initiatives and the recognised 
benefits of cross-border cooperation on renewable energy, few practical examples 
of actual implementation exist today (EEA, 2020). At the same time, some high-level 
strategic initiatives are already taking shape. The emerging idea of regional renewable 
energy hubs is gaining traction in the North Sea and Baltic Sea basins (Esbjerg, Ostend 
and Marienborg Declarations) and in the Mediterranean (MED9 format).

Beyond sharing renewable energy, interconnectors also allow for the efficient 
sharing of flexibility resources. The EC's Joint Research Centre (JRC) estimates 
that interconnectors' relative contribution at the EU level can cover 15% of the 
daily and 33% of the monthly flexibility needs by 2030. Interconnectors should be 
thought of when assessing the resource mix. For example, the same study estimates 
that almost 2 GW of local storage is needed to replace 1 GW of interconnectors 
(JRC, 2023). Maximising transmission capacities, both, physically and operationally 
can make decarbonisation of national systems less costly (Zachman et al, 2023).

Deepening cooperation requires considerable efforts 

from all Member States, particularly in making the 

increasing structural interdependence both acceptable 
and achievable.

Coordination of policy decisions regarding the national resource mixes, joint planning 
of investment in cross-border infrastructure and coordinated operation is key to 
maximise complementarity effects. To that end, new approaches may be explored 
and existing ones strengthened, including:

• 

facilitating coordinated actions at the EU level in the context of the integrated 
NECPs under the governance regulation (European Parliament and Council, 2018a) 
and by cooperating in the frame of the renewable energy directive (European 
Parliament and Council, 2018b);

(15)  For example, planned joint development of offshore wind and green ammonia cross-border infrastructure.
(16)  For example, a 400 MW solar photovoltaic tender in Finland with funding provided by Luxembourg.

24

Flexibility solutions to support a decarbonised and secure EU electricity systemPromising climate‑compatible flexibility solutions exist

• 

• 

regularly assessing the flexibility needs of decarbonising the EU power supply while 
cost-effectively maintaining the security of supply, taking into account all flexibility 
resources, including the cross-border flexibility potential;

jointly planning cross-border infrastructure based on cost-benefit analysis that 
considers both enhancing the efficiency of the existing assets and developing new 
lines (17) (ACER, 2021a);

•  enhancing cooperation among transmission system operators through regional 

coordination centres to support integrated system and market operations, including 
coordinated capacity calculation and security analyses, focusing on maximising 
cross-border capacities with the aim of freeing up at least 70% of capacity for trade 
between Member States (ACER, 2023c).

Reducing flexibility needs 

Uncongested interconnection capacities reduce 

the need for additional, sometimes less effective, 

local flexibility resources.

Harnessing the complementarity of wind and solar resources in an integrated European 
grid reduces the system's flexibility needs. Interconnectors also play a key role in 
efficiently spreading electrical energy from other resources, including storage and 
demand response. The subsequent sections introduce these key flexibility resources.

3.2 

Demand response must become a key actor in a future energy system 
dominated by variable renewable energy sources

While EU electricity (and energy) demand has been inflexible for the most part, 2022 
demonstrated the relevance of demand flexibility and savings. Businesses and, to 
some extent, residential consumers reduced their overall gas consumption by about 
20% from average levels in previous years in response to price increases of around 
400%, national information campaigns and other measures (EG3, 2022) (18). This 
helped avert higher electricity prices from marginal gas supply and potentially an 
acute energy supply shortage.

In the first half of 2023, some European wholesale markets recorded twice as many 
events of negative electricity prices as in the same period in 2022 (IEA, 2023c). 
These prices happen during VRE excess situations, for example when a surge 
of summer winds coincides with peak solar generation and with low demand 
(see Section 2.2) (19). Sub-zero energy prices indicate that electricity consumers often 
have limited financial incentives and information on which to respond to such price 
swings, which affects their ability to provide a service to the electricity system.

(17)  A number of regional groups provide strategic steering and policy guidance and monitor the progress of projects of common interest in 

priority regions.

(18)  Also see ACER (2023), Wholesale Electricity Market Monitoring 2022 — High-level analysis of energy emergency measures, Ljubljana.
(19)  Negative prices could also be a symptom of ill-designed renewable support schemes (ACER, 2022b).

25

Flexibility solutions to support a decarbonised and secure EU electricity systemPromising climate‑compatible flexibility solutions exist

Box 7

Demand response

'Demand response' refers to residential, commercial or industrial customers changing 
their electricity load from normal or planned consumption patterns in response to 
market signals, including in response to time-variable electricity prices or incentive 
payments, or in response to the acceptance of the final customer's bid to sell demand 
reduction or increase at a price in an organised market, whether alone or through 
aggregation (EU, 2019). In general, price-sensitive demand should increase in times of 
lower prices (VRE excess) and decrease in times of higher prices (VRE deficit), thus 
balancing the system.

Energy efficiency and demand response (see Box 7) are therefore essential tools to 
help rebalance markets, reduce high prices and soak up low or negative prices. In 
general, it is more economical and less polluting to reduce or delay energy use than 
to activate additional supply or other flexibility resources.

At present, households consume around 700 TWh annually and contribute to around 
half of the winter electricity peak, while the private and public sectors consume a further 
747 TWh annually (EG3, 2022; Eurostat, 2023). Both figures will increase in future, 
following a more general move from gas to electricity, the roll-out of electric vehicles and 
heat pumps, and the growth of digital technologies and data centres. This demand will 
see two main price developments linked to the high renewable energy supply projected 
this decade. First, consumers will probably benefit from the lower average electricity 
prices offered by increasing low-running-cost renewable generation. Second, significant 
VRE deployment could increase the need for system-balancing services, at a certain 
cost (20). Consumers will need to be able to adjust their consumption behaviour based on 
incentives and signals in response to the system's needs. This ability to respond can limit 
the costs of these balancing services, which will be incurred by consumers who either 
do not or cannot respond. Enabling vulnerable households to respond to such stimuli will 
ensure that even these consumers can reap all the benefits of VRE.

The quantitative assessment underpinning this analysis tested an 
electricity-demand-saving and electricity-demand-shifting scenario inspired by the EU's 
emergency intervention in the winter of 2022/2023 (21). Demand savings were implemented 
as peak electricity demand shifting of 5% (22) and electricity demand reductions of 
10% during non-peak-demand hours. In total, it resulted in an annual demand saving of 
7% (231 TWh) across Europe in 2030, which translates into overall reductions in all daily, 
weekly and annual flexibility needs of 7%, 9% and 12%, respectively, by 2030 (see Figure 9).

(20)  Market participants, including the ones with VREs in their portfolios, are responsible for the imbalances they cause. Balancing rules incorporating a 

well-designed incentive structure tend to minimise the overall cost to the system.

(21)  Regulation 2022/1854 of 6 October 2022 on an emergency intervention to address high energy prices (OJ L 261, 7.10.2022, p. 1).
(22)  Shiftable to hours of VRE excess before the following peak hour.

26

Flexibility solutions to support a decarbonised and secure EU electricity systemPromising climate‑compatible flexibility solutions exist

Figure 9 

Contribution of the demand-saving and demand-shifting scenario 
measures to the total flexibility needs in Europe in 2030

-12%

-9%

-19

-21

-7%

-24

-30

-25

-20

-15

-10

-5

0
TWh

Seasonal flexibility needs

Weekly flexibility needs

Daily flexibility needs

Notes: 

The bars represent changes in daily, weekly, and seasonall flexibility needs for demand savings 
and shifting compared with the average results with the reference demand. Values correspond to 
the averages of all simulations performed per demand scenario. 

The analysis was performed for interconnected ENTSO-E member countries.

Source: 

Ramboll, based on hourly generation and demand data from the ENTSO-E transparency platform 
(ENTSO-E, 2022); 2030 annual data from the policy scenarios for delivering the European Green Deal 
(EC, 2021b); and historical hourly profiles from ENTSO-E (2022).

These benefits highlight the disproportionately impactful effect of demand response 
measures. Although an increasing number of countries have started piloting such 
projects (see case study 1), there are still numerous legal, technical, economic and 
informational barriers to activating demand response at larger scale. The following are 
most prominent.

27

Flexibility solutions to support a decarbonised and secure EU electricity system 
Promising climate‑compatible flexibility solutions exist

•  Robust implementation of the existing supporting regulatory framework (23) should 
be ensured, for example, recognising the needs of active consumers. In addition, 
the timely adoption of the ongoing work on the dedicated regulation integrating 
demand response into the energy markets will be a key milestone.

•  Barriers, such as prohibitive prequalification criteria, need to be removed to help 
consumers — even small, decentralised ones — to enter the market and provide 
demand response services via aggregation (ACER, 2021b, ACER and CEER, 2021)

•  There is a need for the rapid deployment of smart meters, and submeters, with the 
right capabilities (e.g. two-way communication at high time-resolution) to provide 
the technological prerequisite for active participation.

•  Getting the right range of supply choices together with the right information 
to consumers is necessary. This should include fixed and time-of-use types 
of contracts alongside, for instance, public advisory tools and one-stop-shop 
platforms allowing consumers to compare offers and understand their financial 
benefits and potential risks.

Case study 1

Virtual Power Plants in Italy

Small system users frequently face barriers to entering energy markets, including 
stringent requirements for offering balancing products. Commonly, ancillary services 
are primarily assigned to large conventional generators, thereby restricting the 
participation of smaller ones.

In Italy, the mixed enabled virtual units pilot project enabled small units, including 
demand response providers, to aggregate to form a virtual power plant and deliver 
ancillary services to the system operator. Embracing various forms of aggregation not 
only fosters a competitive environment that reduces costs for end users. It also creates 
a viable business opportunity for active consumers.

Wider policy choices should also explicitly consider their impact on system 
responsiveness. There are win-win situations, but more often there may be trade-offs, 
for example when designing support mechanisms for generation that does not 
adequately incentivise operation according to system needs or locking consumers in 
to fixed-price contracts without considering the needs of different consumer groups 
(ACER and CEER, 2023).

Integrating electricity demand and other distributed flexibility resources is one side 
of the coin. As renewable electrification reaches a wider range of sectors, demand 
could have an even larger impact on balancing VRE excess and deficit. Integrating 
the various energy consuming sectors will bring additional benefits, as shown in 
the Section 3.3.

(23)  To increase procurement of demand response and leverage the potential from distributed energy resources, the EC has introduced new definitions 
for demand response, active customers and aggregators as part of its clean energy for all Europeans policy package (EC, 2019a). The European 
Green Deal policy framework (EC, 2019b) offers a number of targeted and indirect (enabling) measures. The recent electricity market design 
proposal (EC, 2023) and the framework guidelines on demand response (ACER, 2022a) put forward measures to strengthen the development of 
demand response.

28

Flexibility solutions to support a decarbonised and secure EU electricity systemPromising climate‑compatible flexibility solutions exist

3.3	

Energy	system	integration	increases	flexibility	and	supports	the	
decarbonisation of end-use

To realise the full potential of demand response and benefit from the more rapid 
decarbonisation of electricity supply, policy-makers and planners need to move 
to a holistic development and integrated operation of the energy system. This will 
allow the EU to capitalise on rapid changes also under way in other sectors, such as 
buildings, transport and industry.

With appropriate incentives and standards in place, energy system integration 
(see Box 8) will facilitate harnessing flexibility from various resources, such as 
time-shifting and reducing the heating and cooling needs and shaving demand peaks 
by using domestic or industrial heat pumps and district heating (see case study 2).

Box 8

Energy system integration

'Energy system integration' refers to linking and coordinating across the entire 
chains of supply and demand for key energy carriers, such as electricity, heating and 
transport fuels, and integrating their associated markets and infrastructures to improve 
competitiveness and the security of supply (EC, 2020).

Integrated systems will also increase the potential for energy storage (see Box 9). 
Similar to demand response, storage solutions re-allocate energy resources in time, 
becoming important flexibility providers in the future (IEA, 2023b). Electricity storage 
provides flexibility by taking up low-priced electricity (VRE excess) and feeding it back 
to the system in high-price (VRE deficit) hours. Storage solutions with associated 
smart technologies can bring about even higher gains. This is particularly evident in 
the case of electric vehicles that can offer controllable capacity by adjusting battery 
charging and discharging patterns in direct communication with the grid. Alongside 
this, electricity can be stored as heat in buildings and electrolysers can increase the 
production of renewable (green) hydrogen during times of VRE excess.

Box 9

Energy storage

'Energy storage' is an umbrella term for several technologies that convert electricity to 
other forms of energy and store it, for example:

•  mechanically, most commonly as pumped hydropower (water pumped upstream, 

then released later) but also as compressed air in a reservoir or spinning velocity in 
a flywheel; 
electrochemically, as chemical energy in batteries;
thermally, converted into heat that is stored in diverse media, from hot water tanks 
to structural building materials;
as hydrogen or other fuels (power-to-x), for instance by splitting water into 
hydrogen and oxygen using electricity.

• 
• 

• 

29

Flexibility solutions to support a decarbonised and secure EU electricity systemPromising climate‑compatible flexibility solutions exist

However, as discussed in Section 2.2, even if the asymmetry reduces by 2030, 
more than 11 times more energy will still be needed during VRE deficits than will 
be produced annually during excess situations. Therefore, the ability of storage to 
serve as a cushion will be limited. If only incentivised by price differences at the 
times of VRE excess and deficit, storage units would not be able to accumulate 
enough surplus energy to compensate for the VRE deficit. This also means that green 
hydrogen production will be relatively scarce in the EU by 2030, with policy-makers 
needing to carefully prioritise its most valuable applications.

The flexibility resources, including industrial demand, electricity storage, electric 
vehicles, and industrial and residential heating, should react to surpluses and scarcities 
as conveyed by efficient price signals from all markets (24). For example, the revenue 
stream of storage technologies tends to rely on multiple market segments, including 
ancillary services (JRC, 2023). Therefore, it is crucial to dismantle undue market-entry 
barriers that may restrict solution providers and to allow the smooth integration of 
these flexibility sources into all electricity markets. In contrast, with the constrained 
participation of new and small entrants, relying on public subsidies and other 
out-of-market schemes is likely to become increasingly necessary.

In the EU's pursuit of a decarbonised, resilient power system, a holistic approach that 
takes advantage of the continental scale of the internal energy market must cohabit with 
the tendency for greater decentralisation of energy resources. With the ability to supply 
electricity closer to the end consumers, well-integrated distributed energy resources 
might limit the growing pressure on the distribution and transmission networks, resulting 
in minimised grid congestion and losses. Moving the supply closer to demand not 
only holds the promise of slowing down the need for extensive grid reinforcement and 
reducing the losses, but also opens up new business opportunities for system users to 
either put their capacities on the market or explore self-consumption and energy-sharing 
options. Deploying distributed energy resources at the residential or community level can 
thereby help European households and businesses mitigate their exposure to high energy 
prices, while simultaneously contributing to the security of electricity supply (EEA, 2022c, 
2022d). Research to overcome the challenges related to the durability, stability, scalability 
and recyclability of new photovoltaic technologies can further increase the importance of 
distributed energy resources, enabling solar photovoltaic modules to become standard 
building material components or to be integrated into various surfaces.

Supplying energy near end consumers is also a feature of hybrid energy projects. 
Typically located at a single site, these projects combine various technologies to use 
renewable power efficiently. Such systems can effectively respond to VRE excesses 
and deficits through appropriate charging and discharging patterns, conversion 
between different energy carriers such as heat or green hydrogen, or engagement in 
electricity trading on the market (see examples case studies 2 and 3).

(24)   A recent study shows that the electric heating systems can unlock large virtual storage capacities, even in energy-inefficient buildings 

(Thomaßen et al., 2021).

30

Flexibility solutions to support a decarbonised and secure EU electricity systemPromising climate‑compatible flexibility solutions exist

Case study 2

Heat Smart Orkney

In past years, Orkney in Scotland saw a transition from generating fossil-based energy 
to harnessing abundant wind resources. The rapid growth of wind energy led to 
moments of excess production, initially forcing the operator to curtail wind farm output. 
As a response, a community-led renewable energy project investigated the possibility of 
the smart electrification of the heating sector. Electricity was stored as heat energy in 
times of excess instead of curtailing production.

The project serves as an example of how communities can take action to address local 
congestion problems in the electricity grid and better utilise VRE sources. On top of 
that, Orkney is an illustration of a small-scale strive towards energy independence, as it 
reduces its reliance on fossil fuel deliveries by better using local resources.

Case study 3

Haringvliet Hybrid Energy Park

Hybrid energy parks typically integrate multiple renewable energy technologies to form 
an economic unit. For instance, the Dutch Haringvliet project incorporates solar and 
wind generation alongside battery storage.

By leveraging the synergies between technologies, hybrid parks ensure a reliable energy 
output that effectively balances potential excesses and deficits on-site.

The integration of the flexibility resources across sectors requires an effective 
European framework that can efficiently integrate the local resources into the 
interconnected energy market. In particular, policy-makers should work towards 
removing barriers hindering the market entry of new and small market participants 
(ACER and CEER, 2021), fostering the development of hybrid energy projects and 
finding ways to capitalise on opportunities offered by prosumption and distributed 
energy production (EEA, 2022c, 2022d).

Last, advances in information and communications technologies, artificial 
intelligence and digitalisation will become key drivers for the ongoing system 
transformation. The results of this progress are already applicable in optimising 
the integrated development of energy system components. The adoption of digital 
tools will become crucial to reduce the need for additional physical infrastructures, 
mitigate disturbances and facilitate greater VRE integration.

31

Flexibility solutions to support a decarbonised and secure EU electricity system4  All‑hands‑on‑deck and leverage complementarity 
across borders — a broad mix of resources 
and supportive policies is needed to handle the 
flexibility challenge

This paper points out a steep increase in flexibility needs by 2030. A number of 
climate-compatible technologies are available to satisfy these needs and mostly 
replace fossil-based flexibility resources by the end of the decade.

4.1 

Flexibility is needed across all timeframes

Covering the peaks and valleys within a day requires substantial growth of flexibility 
resources, as their input should reach more than two times the current levels. Solutions 
to this include employing demand response, smart sector integration and storage 
technologies more amply. Weekly flexibility needs will almost double. Storage solutions 
such as pumped hydropower are well suited to provide the required capacity as day-night 
storage, but they can also cover the weekly cycle. Annual flexibility needs are expected 
to grow by around one-third of current needs by 2030. These swings could be covered 
by, for example, reservoir hydropower, electrolysers, hydrogen-based power plants and 
thermal storage solutions, along with the generalised energy-efficiency and savings 
efforts demanded by the recently updated EU energy efficiency policy framework.

Increasing electrification provides opportunities (on the demand side) for us all to play 
our part but also challenges. Already there are signs of not having sufficient demand-side 
flexibility as evidenced by more days with massively negative electricity prices across 
certain parts of the EU. Negative power prices are a sign of very high supply (e.g. lots of 
wind and solar) at the same time as low demand. It is not always easy for generators to 
switch off or (industrial) consumers to ramp up demand. Hence, even more flexibility (of 
different types) and interconnections to enable that flexibility to cross borders is key.

4.2 

Flexibility needs point to the role of interconnectors as enablers of cross-
border	flexibility	

Deploying and sharing the right mix of variable solar and wind resources within a Member 
State and moreover across the EU also helps to reduce the system flexibility needs 
through the identified technological and geographical complementarity. Interconnectors 
will also play a key role by enabling flexibility resources to be shared across borders on 
all timeframes, but particularly beyond the daily time frame, where one-third of the annual 
flexibility need could be provided from across borders by 2030 (JRC, 2023).

Despite the availability of these various climate-compatible flexibility options, there is 
no single easy answer to meet the flexibility needs at speed within the 2030 time-frame: 
network developments, demand response, storage technologies and system integration 
all need to be used in combination to guarantee that the future energy system always 
meets the needs of consumers. Delivering the clean energy transition will take unparalleled 
efforts from all stakeholders in all economic sectors, encompassing innovative solutions, 

32

Flexibility solutions to support a decarbonised and secure EU electricity systemAll‑hands‑on‑deck and leverage complementarity across borders 

coordinated planning, adaptations in network operation, changes in consumer behaviour 
and an array of complementary measures. Ultimately, it also includes enabling electricity to 
flow cross-border. As the energy crisis taught the EU, cross-border trade has a tremendous 
potential to dampen volatility and enhance much needed resilience (ACER, 2023a).

4.3 

Strong political commitment and coordination is key

Undoubtedly, this clean energy transition will allow the EU to reduce its dependence 
on fossil fuels and on energy imports. Achieving a secure energy system 
and decarbonisation at the same time, however, necessitates strong political 
commitment, coordination and an in-depth understanding of the trade-offs. Most of 
all, the European electricity grid needs to be equipped with a well-calibrated range 
of flexibility resources during this decade to ensure that the system can cope with 
short-, medium- and long-term fluctuations in supply and demand. To enable that, this 
paper highlights two essential focus areas and action points.

Use	coordinated	planning	and	operation	of	the	energy	system	to	manage	decarbonisation	and	security	of	supply	at	the	same	time.

Assess flexibility needs 
thoroughly

Given the strong role of distributed resources and interconnectors, flexibility needs and potential 
ways to fill those needs should be carefully assessed in a forward-looking manner at the 
European and national levels.

Check consequences to 
flexible resources

When considering energy policy options (e.g. consumer protection), always check the 
possible unintended consequences on the availability and development of flexibility resources 
(e.g. demand responsiveness). Being aware of the trade-offs will help to calibrate the measures.

Tap into synergies across 
borders

Member States' NECPs and biennial greenhouse gas projections in progress reports can facilitate 
regional cooperation. Sharing information on renewables and flexibility policy choices and 
projections across borders fosters an integrated system view, which, in turn, helps to address 
domestic electricity needs. Best practices for cooperation and coordination should be identified 
and promoted within the NECP and the biennial national greenhouse gas projections and energy 
parameters alongside existing mechanisms, such as the joint development and procurement of 
renewable energy sources and statistical transfers.

Maximise interconnection 
availability

Having a well-managed national and cross-border infrastructure and the close cooperation of 
transmission system operators through the regional coordination centres are prerequisites for 
regional renewable energy hubs to reap the full benefits of sharing clean energy and flexibility 
resources. Freeing up at least 70% of grid capacity to make it available for cross-border trade is 
a key step in maximising regional benefits and meeting national and regional flexibility needs.

Create	incentives	for	consumers	to	be	actively	adapting	their	consumption	when	needed	and	for	storage	to	be	operated	dynamically.

Provide price signals

Provide trusted, targeted 
information

Take all resources on 
board

Energy bills and smart meters (including carbon pricing and time-of-use tariffs) inform consumers 
of the actual electricity cost, which can trigger behavioural change and the adoption of new business 
models in response to periods of scarcity and surplus. Households' exposure to the prices should be 
tailored to their risk preferences. The deployment of smart meters should be sped up.

Consumers should be able to make informed choices according to their needs and circumstances, 
starting from their metered consumption. Competent authorities (e.g. regulators, consumer bodies 
and distribution system operators) should provide enhanced guidance to households to assess the 
suitability of flexible supply contracts and the potential financial benefits they may attain. Additional 
measures such as public advisory tools and guides (for instance about access to funding for 
vulnerable households) should complement economic incentives, to help households in particular to 
judge the benefits of becoming active and flexible consumers of electricity.

Small-scale active consumers, prosumers, storage units and other small system users are as 
essential as large consumers and generators. All resources, big and small, should be able to 
participate in all electricity markets on an equal footing. Dismantle barriers to entry, such as 
prohibitive prequalification criteria, and facilitate new actors such as aggregators to access a joint 
potential of distributed energy resources.

Think in broad terms about 
energy storage

Various energy storage technologies make it possible to choose solutions that are fit for purpose. 
Depending on the location, needs and available options, VRE generation surplus can be stored 
as electricity, heat (e.g. in energy-efficient buildings) electrofuels (e.g. green hydrogen) and in 
pumped hydropower water reservoirs.

33

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38

Flexibility solutions to support a decarbonised and secure EU electricity systemEuropean Environment Agency

Flexibility solutions to support a decarbonised and secure EU electricity system
2023 — 38 pp. — 21 x 29.7 cm

ISBN 978-92-9480-603-1
DOI: 10.2800/104041

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