In today’s evolving energy landscape, where variable renewable sources like wind and solar play an increasing role, flexibility helps by acting as a shock absorber that mitigates the effects of fluctuating power outputs, shifting demand patterns within the electricity grid and even reducing prices for consumers. Such capacity helps prevent grid overloads and maintain steady flows of electrons across the system.
Why does Europe need more flexibility?
Today, Europe’s energy system is transitioning from a centralised, fossil-fuel-based generation to a more decentralised, renewables-driven system. Traditionally, power plants delivered a consistent output. However, renewable energy sources are inherently variable (i.e. more difficult to forecast production) as they are dependent on changing weather conditions.
As of 2024, nearly two-thirds of the EU’s electricity now comes from clean sources, meaning that growing variability is demanding flexible assets and an adaptable grid to manage shortfalls and surpluses. Simultaneously, Europe is phasing out fossil fuel-based baseload generation such as coal, oil and natural gas. This transition, although necessary for decarbonisation, removes a once reliable source of dispatchable power. Consequently, the need to compensate for this loss has increased, reinforcing the need for systems that can swiftly adjust generation and consumption.
Moreover, the ongoing electrification of transport, heating and industry further complicates grid management. The growing adoption of EVs, heat pumps, and smart appliances introduces new and variable loads. Without sufficient flexibility measures—ranging from fast-responding energy storage to advanced demand-response systems—the grid risks experiencing congestion, negative price occurrences and even blackouts during peak demand periods.
To accommodate these changes, modern grids incorporate both supply-side flexibility and demand-side flexibility.
Beyond ensuring continuous energy supply, flexibility is also important for broader energy security and societal climate objectives. A flexible system is better prepared to integrate higher volumes of renewable energy, thereby reducing reliance on imported fossil fuels and cutting greenhouse gas emissions from the power sector. Therefore, such adaptability not only enhances resilience against both physical and cyber threats, but also underpins economic and environmental sustainability.
Let’s delve deeper into the different types of flexibility needed in our energy system.
Which types of flexibility are there?
Flexibility in the power system operates across multiple timeframes and sources, ensuring that electricity supply and demand remain balanced under varying conditions. This flexibility can be categorised based on both its duration and origin—whether it stems from consumption adjustments, generation changes or energy storage.
• Short-term daily flexibility
This is the ability to respond to power supply and demand fluctuations within a single day, such as shifting demand to off-peak hours – when cheap renewable production is abundant, and demand is low – or ramping up fast-acting generation to meet peak loads – when demand is highest, and supply is scarce. Battery storage and demand-side management through intelligent technologies, such as smart charging, also play key roles in this type of flexibility.
• Medium-term weekly flexibility
Managing variations over several days or weeks, often influenced by weather patterns affecting renewable generation. Hydropower reservoirs and industrial demand-response programs help balance supply and demand over this timeframe.
• Long-term seasonal flexibility
Adjusting for shifts in electricity demand and renewable generation across seasons, such as lower solar output in winter or higher electricity demand for cooling during the summer. Technologies like pumped hydro storage, nuclear, electricity generation through green molecules, and cross-border electricity transfers contribute to long-term flexibility.
Flexibility can also be categorised based on its source:
I. Consumption flexibility
This type of demand-side flexibility involves temporarily increasing or reducing electricity consumption based on grid conditions and market signals. Examples include:
– Industrial demand response, where big industrial consumers such as energy intensives, factories or electrolysers reduce power use during peak periods.
– Smart home appliances, such as smart thermostats or electric heat pumps, which adjust their energy consumption dynamically.
– Electric vehicles (EVs), which can delay charging or even discharge power back into the grid when needed through smart charging and vehicle-to-grid (V2G) technologies.
II. Production Flexibility
On the supply side, power plants are also able to increase or decrease generation in response to fluctuations in demand and renewable output. Key sources include:
– Conventional power plants, such as gas-fired plants and combined heat and power (CHP) units, which can ramp up quickly when needed.
– Hydropower plants, particularly those with reservoirs, which provide rapid-response generation.
– Renewable power plants, such as wind and solar farms equipped with curtailment controls and hybrid battery systems that allow flexible dispatch.
III. Storage Flexibility
Energy storage enables surplus electricity to be saved and used when demand rises. Different storage technologies serve varying timeframes:
– Short-term storage: Lithium-ion batteries and flywheels provide rapid, high-frequency balancing.
– Medium-term storage: Redox flow batteries and thermal storage systems help manage daily and weekly energy shifts.
– Long-term storage: Pumped hydro plants and hydrogen storage allow for seasonal energy management.
By leveraging both supply-side and demand-side flexibility across different timeframes, operators have a more resilient and adaptive electricity system, capable of integrating large shares of renewable energy while maintaining security of supply
Which technologies provide flexibility?
To manage the variability of renewable energy sources and the dynamic nature of electricity demand, there exists a diverse array of technological solutions:
Hydropower
Hydro offers both short- and long-term flexibility. The Nordic and Alpine regions, with their favourable natural conditions, harness the dual benefits of reservoir and pumped hydro storage. This combination supports not only daily balancing of supply and demand but also seasonal management of energy fluctuations.
Storage solutions
Storage is at the forefront. Battery storage systems offer rapid, short-term response capabilities by absorbing excess generation during periods of low demand and discharging electricity when demand peaks occur. Pumped hydro storage also follows this same logic, albeit on a more long-term and larger scale.
Nuclear power
Nuclear power is another critical asset for flexibility. Many existing nuclear plants, especially in France, have proven their ability to adjust output quickly—up to 80% within mere minutes—thereby becoming another asset for grid reliability as renewable penetration increases.
Gas
Flexible gas-fired power plants have also been pivotal during periods of supply uncertainty. Although the EU is committed to decarbonisation, gas plants remain as a transitional solution, capable of rapid ramping during demand spikes. As we move towards net zero, natural gas will be gradually replaced by green molecules such as hydrogen and biomethane. Complementary to this role, strategic gas storage targets — especially for the winter when demand is high — helps ensure supply continuity and mitigate potential shortfalls.
Interconnectors
Interconnectors enables electricity to flow between electrical grids, connecting separate networks or linking synchronous grids. It may be formed of submarine power cables, underground power cables or overhead power lines. Interconnectors are a crucial source of both short-term and long-term flexibility for EU countries, including for their security of supply. During the energy price crisis, interconnectors allowed Germany to export electricity to France which was experiencing an energy shortage after several nuclear reactors were taken offline for maintenance.
In addition to these generation and storage technologies, demand response & electric vehicles are emerging as potential game-changers.
The untapped flexibility potential of electric vehicles
Electric vehicles (EVs) represent a largely untapped source of flexibility for Europe’s power system. As EV adoption increases, these vehicles evolve from mere transportation tools into mobile energy assets. Equipped with smart charging systems, EVs can strategically shift their charging to off-peak hours, absorbing surplus renewable energy and easing grid congestion during high-demand periods.
Eurelectric’s latest e-mobility study shows that by 2030 there will be an estimated 114 terawatt/hour (TWh) of battery capacity available for grid purposes based on current estimates of EV uptake. This is enough to power 30 million homes every year!
Furthermore, bidirectional charging—or vehicle-to-grid (V2G) technology—enables EVs to discharge stored energy back to the grid, effectively turning parked EVs into decentralised energy storage units. This capability is crucial for supporting the network during peak loads or unexpected supply shortfalls.
A prime example is the Renault project in Utrecht, Netherlands. In a collaboration with MyWheels and the City of Utrecht, Europe’s first V2G-enabled car-sharing service was launched in late 2024. The French auto manufacturer supplied 500 Renault E-Tech electrics equipped with V2G, resulting in a project that could serve as a template on how EV fleets can actively participate in grid balancing.
Harnessing the flexibility of EVs not only boosts energy system resilience but also delivers cost savings to consumers and environmental benefits. As flexibility providers, consumers can help relieve grid congestion, which lowers, in turn, the cost of electricity. At the same time, they can save money by charging during off-peak hours when electricity rates are lower and earn money by selling energy back through V2G.
Each year, a driver of a compact EV in the Netherlands saves on average 9% (about €515) on the vehicle’s total cost of ownership, going up to nearly 26% (€2,700) when looking at a large car or SUV. Similarly, Spanish drivers save between 13% (€780) to 25% (€2,500) each year.
As smart charging technologies advance and supportive policies take effect, EVs are poised to play a net positive role for Europe’s flexibility.
Challenges with boosting flexibility
That being said, there are some challenges regarding flexibility. The first pertains to regulatory fragmentation.
Regulatory fragmentation
With divergent rules and market designs across Member States, coordinated cross-border solutions remain elusive, slowing the integration of technologies that could otherwise provide seamless grid balancing.
Lack of investments
Investment gaps further compound this issue. High upfront costs for advanced storage systems, grid upgrades and smart charging technologies create financial hurdles. Uncertain returns, difficult business cases and a lack of standardised funding framework further deters private investors, delaying the rollout of projects.
Social acceptance
Public acceptance is sometimes another issue. Local resistance, and a ‘not in my backyard’ (i.e. NIMBY) mindset towards large-scale infrastructure projects can stall development. Concerns over potential environmental impacts has also affected consumer willingness to participate in some flexibility programs.
Addressing these challenges is however possible through harmonised policies, innovative financing models as well as robust stakeholder engagement and awareness raising campaigns.
How to unlock flexibility to ensure Europe’s energy security
There is no one size fits all solution for unlocking flexibility across EU Member States. Different solutions will support different energy mixes, but all sources will require clear signals for what is needed, when and where.
I. Strengthening policy and market design
A well-functioning flexibility market can ensure fair compensation for flexible assets and encourage investment in grid-balancing solutions. This includes:
– Enhancing capacity mechanisms: Current capacity remuneration mechanisms could be enhanced to value flexible resources such as energy storage. This would ensure these assets are fairly remunerated to keep their operations running but only activate their power generation or storage when needed for the system.
– Developing flexibility markets: Establishing dedicated markets for flexibility services — such as demand response and storage — can help create clearer price signals for investment and consumers’ active participation in the system. Cross-border harmonisation of market rules can further facilitate efficient trading and resource optimisation.
– Reforming tariff structures: Static Time of Use (ToU) network tariffs could be expanded to encourage grid users to adjust their consumption to periods of high-RES penetration in the system.
II. Deploying technological innovations
Leveraging digital tools and new technologies can also help unlock the full potential of flexibility:
– Data-driven grid management: Artificial intelligence and other algorithmic tools can help optimise real-time grid operations by more accurately predicting demand and renewable generation patterns. This could allow for a more granular understanding of the local infrastructure’s flexibility needs and enable proactive balancing measures.
– Blockchain for decentralised trading: Smart contracts and blockchain-based energy trading can also improve transparency and efficiency in markets, enabling direct transactions between grid operators and flexibility providers.
EU Initiatives for enhancing flexibility
Recognising the critical role of flexibility in securing a resilient and decarbonised electricity system, the European Union has launched several initiatives to support its development.
Electricity market design reform
The Electricity Market Design (EMD) reform, adopted in 2024, aims to create a more stable, flexible and consumer-centric electricity market. Key provisions include:
• Strengthening flexibility support schemes to ensure the availability of flexible resources, including demand response, storage and dispatchable low-carbon generation.
• Expanding long-term contracts such as Power Purchase Agreements (PPAs) and Contracts for Difference (CfDs) to reduce exposure to price volatility and encourage investment in renewables and flexibility solutions.
These measures are expected to accelerate the integration of flexibility services into electricity markets, ensuring renewables’ smooth integration, a stable grid and a more resilient system to external shocks.
The Affordable Energy Action Plan
The EU newly released Affordable Energy Action Plan emphasises the need to boost flexible capacity and demand by addressing remaining barriers to demand -side response and storage as well as remunerating flexibility in retail contracts.
In particular, the European Commission is expected to issue non-binding guidance by the end of the year to advise member states on how to best remunerate flexibility providers in retail contracts.
Funding for Storage and Vehicle-to-Grid (V2G) Technologies
In March 2025, the European Commission released its Action Plan for the Automotive industry, a comprehensive strategy to strengthen the competitiveness of the European automotive sector against more aggressive foreign competition. Part of the plan concerns facilitating a competitive e-mobility ecosystem in Europe, including deploying EV-related flexibility solutions such as the aforementioned V2G systems.
This plan includes:
• Dedicated funding for EV smart charging infrastructure to enable bidirectional charging at scale.
• Incentives for fleet electrification, ensuring that commercial vehicles contribute to flexibility markets.
• Regulatory support for interoperability standards, allowing better integration of EVs into the power grid.
Alongside existing funds from the Innovation Fund and Connecting Europe Facility (CEF), these initiatives will help scale up both stationary and mobile storage solutions, reinforcing Europe’s flexibility potential.
By integrating these policy and funding mechanisms, the EU is positioning itself at the forefront of energy flexibility, ensuring a more adaptive and secure electricity system for the future.
The road ahead: a flexible, decarbonised grid
As Europe drives toward a net-zero power sector, flexibility will become an indispensable component of a resilient and secure energy system. This will require a mix of technological innovation, regulatory alignment and cross-border cooperation to fully integrate variable renewables while ensuring security of supply.
The EU should play a central role in shaping this transformation. Harmonising flexibility regulations across Member States will enable a more integrated electricity market, while increased research and development funding can accelerate the commercialisation of emerging flexibility technologies.
Moreover, enhanced cross-border cooperation will strengthen Europe’s interconnected grid, ensuring efficient electricity flow between regions with different renewable generation profiles.
Without scaling flexibility, Europe risks undermining its security of supply at a time when it’s trying to wean itself off Russia’s oil and gas imports. However, with the right investments and policies, flexibility can transform the power system into a network capable of supporting deep electrification.
Eurelectric remains committed to advancing innovative flexibility solutions, as well as advocating for policies that enable a secure, affordable and sustainable electricity future.
Disclaimer: This article is for informative purposes only and may not entirely reflect Eurelectric official positions. For formal positions, please consult our position papers here.