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Demand flexibility: a key challenge for EU electricity market reform

(5 Sep 2023) The massive development of intermittent renewable energies is set to dramatically increase the need for flexibility in the electricity grid, and market players want increased focus on demand management as a source of grid optimisation.

The war in Ukraine sent EU electricity prices soaring last year, particularly for nuclear and renewable energies, whose cost structure remained unaffected by rising gas prices.

In response, the European Commission proposed reforming the EU electricity market to accelerate the deployment of renewables and proposed measures to make power supply and demand more flexible.

According to EU Energy Commissioner Kadri Simson, the EU’s daily flexibility needs will increase by 133% between 2021 and 2030 and a further 250% between 2030 and 2050 because of the increasing share of intermittent renewable energies injected into the grid, she said in April.

Making demand more flexible

The market’s supply side can be flexible mainly by reserving gas or coal power capacity during peak demand.

However, these resources are expensive to maintain and are insufficient to meet growing demand resulting from the increased use of variable renewables in Europe, such as solar and wind power.

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, 5 Sep 2023: Demand flexibility: a key challenge for EU electricity market reform