Commentary on the Demand Side Flexibility Monitor 2024
European energy today does not need further proof that demand-side flexibility makes sense. We already have that. The technologies exist, customers and aggregators are gradually getting involved, and the need for flexibility grows with every new megawatt of renewable energy. The problem lies elsewhere: market rules are changing more slowly than the reality of the energy sector.
The latest Demand Side Flexibility Monitor 2024, published annually by the SmartEn organization, highlights exactly this discrepancy. Demand-side flexibility in Europe is moving forward, but still not at a pace that corresponds to the rapid growth of renewables, the electrification of consumption, or the ambitions of regulators.
The greatest progress is visible in three areas: access to wholesale markets, residential flexibility, and capacity mechanisms. This is good news. It means that flexibility is ceasing to be just a topic for pilot projects and is gradually becoming a real part of the energy market.
The most significant change has occurred in wholesale markets. Until now, for most flexible assets, the only practical path to the market was an agreement with a Balance Responsible Party (BRP) or obtaining one's own BRP status. This is often too high a barrier for smaller portfolios, households, or new aggregator models. Great Britain and France already allow independent aggregators to trade without BRP consent, Belgium has opened the market to low voltage, and Sweden is preparing legislative changes that could significantly expand the possibilities for residential portfolios.
This is the direction the rest of Europe must take. A formally open market is not enough if technical conditions prevent participation in practice. Flexibility does not need more declarations. It needs rules under which trading can actually take place.
Residential flexibility recorded the greatest progress in 2024. Dynamic tariffs linked to day-ahead market prices are becoming the standard in Nordic countries and are gradually penetrating other regions. Households are increasingly participating in ancillary services, particularly in Sweden, Great Britain, and France. Tariffs focused on specific technologies, such as heat pumps and electric vehicles, are also developing rapidly.
This is precisely where a fundamental change is visible: the household is no longer just a passive consumer of electricity. It is becoming an active element of the energy system. If it has an electric vehicle, a battery, a heat pump, or intelligent consumption management, it can help the system at times when it is needed most. But only if the market and regulation allow it.
Ancillary services remain a weaker point. Although they are formally open in many countries, real barriers have not disappeared. Minimum bid sizes, complex processes, differing rules between regions, and technical constraints still prevent broader market participation of flexibility. The result is a state where flexibility is often recognized on paper but not fully utilized in operation.
Distribution markets are an even greater disappointment. Following rapid development in Great Britain, the Netherlands, and partially in France, similar progress was expected in other countries. Instead, activity in Central and Eastern Europe has slowed down rather than accelerated after the conclusion of European projects. Without clear regulatory incentives, DSO markets will remain merely local experiments rather than a stable part of the energy market.
The conclusion is simple: demand-side flexibility is no longer a question of the future. It is ready. However, it lacks a consistent market environment that allows for its full utilization. Europe today does not need more pilot projects, but more practical implementation. It needs rules that allow aggregators, households, companies, and smaller portfolios to enter the market without unnecessary barriers.
If the energy transition is to function effectively, flexibility cannot remain a supplement to the system. It must become a standard and tradable part of it.
https://smarten.eu/reports/2024-market-monitor-for-demand-side-flexibility/
Comment
15. March
The utilization of flexibility is no longer a technological problem. It is a problem of rules.
Commentary on the Demand Side Flexibility Monitor 2024
European energy today does not need further proof that demand-side flexibility makes sense. We already have that. The technologies exist, customers and aggregators are gradually getting involved, and the need for flexibility grows with every new megawatt of renewable energy. The problem lies elsewhere: market rules are changing more slowly than the reality of the energy sector.
The latest Demand Side Flexibility Monitor 2024, published annually by the SmartEn organization, highlights exactly this discrepancy. Demand-side flexibility in Europe is moving forward, but still not at a pace that corresponds to the rapid growth of renewables, the electrification of consumption, or the ambitions of regulators.
The greatest progress is visible in three areas: access to wholesale markets, residential flexibility, and capacity mechanisms. This is good news. It means that flexibility is ceasing to be just a topic for pilot projects and is gradually becoming a real part of the energy market.
The most significant change has occurred in wholesale markets. Until now, for most flexible assets, the only practical path to the market was an agreement with a Balance Responsible Party (BRP) or obtaining one's own BRP status. This is often too high a barrier for smaller portfolios, households, or new aggregator models. Great Britain and France already allow independent aggregators to trade without BRP consent, Belgium has opened the market to low voltage, and Sweden is preparing legislative changes that could significantly expand the possibilities for residential portfolios.
This is the direction the rest of Europe must take. A formally open market is not enough if technical conditions prevent participation in practice. Flexibility does not need more declarations. It needs rules under which trading can actually take place.
Residential flexibility recorded the greatest progress in 2024. Dynamic tariffs linked to day-ahead market prices are becoming the standard in Nordic countries and are gradually penetrating other regions. Households are increasingly participating in ancillary services, particularly in Sweden, Great Britain, and France. Tariffs focused on specific technologies, such as heat pumps and electric vehicles, are also developing rapidly.
This is precisely where a fundamental change is visible: the household is no longer just a passive consumer of electricity. It is becoming an active element of the energy system. If it has an electric vehicle, a battery, a heat pump, or intelligent consumption management, it can help the system at times when it is needed most. But only if the market and regulation allow it.
Ancillary services remain a weaker point. Although they are formally open in many countries, real barriers have not disappeared. Minimum bid sizes, complex processes, differing rules between regions, and technical constraints still prevent broader market participation of flexibility. The result is a state where flexibility is often recognized on paper but not fully utilized in operation.
Distribution markets are an even greater disappointment. Following rapid development in Great Britain, the Netherlands, and partially in France, similar progress was expected in other countries. Instead, activity in Central and Eastern Europe has slowed down rather than accelerated after the conclusion of European projects. Without clear regulatory incentives, DSO markets will remain merely local experiments rather than a stable part of the energy market.
The conclusion is simple: demand-side flexibility is no longer a question of the future. It is ready. However, it lacks a consistent market environment that allows for its full utilization. Europe today does not need more pilot projects, but more practical implementation. It needs rules that allow aggregators, households, companies, and smaller portfolios to enter the market without unnecessary barriers.
If the energy transition is to function effectively, flexibility cannot remain a supplement to the system. It must become a standard and tradable part of it.
https://smarten.eu/reports/2024-market-monitor-for-demand-side-flexibility/
Author:
Daniel Szantai
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