About
This report provides an overview of clean flexibility in the EU, focusing on battery storage and demand side flexibility as two key enablers in the transition towards a clean power system. The paper analyses the current state-of-play in the EU regarding these solutions, examines outlooks for future deployment and presents relevant policy options to help accelerate their roll-out.
Executive summary
Time for flex
Clean flexibility will unlock system-wide decarbonisation as more wind and solar is deployed across the EU.
As renewables grow rapidly in the EU, system flexibility needs are increasing. Flexibility is needed to balance the grid when weather dependent generation, such as wind and solar, exceeds or falls short of the amount of power being used. Making sure that flexibility is supplied by clean sources, rather than fossil fuels, is an essential part of keeping decarbonisation on track for EU targets.
Two clean sources in particular are often overlooked: battery storage and demand side flexibility. These are ready to deliver now and have the potential to make a significant difference to a clean power system, both immediately and longer term.
Senior Energy and Climate Analyst, Ember
A system based around wind and solar has to be flexible. Making sure that flexibility is supplied through clean solutions is absolutely critical to building a secure, cheap and decarbonised power system. Luckily, we already have tools at our disposal. Batteries, demand side flexibility and grids will be the connecting fabric of an agile and cost-effective clean power system.
What is clean flexibility?
No clean energy system without clean flexibility
Wind and solar are becoming the backbone of Europe’s power system. Storage, demand side flexibility and grid enhancements are crucial to put that renewable power to use.
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Achieving climate targets and mitigating system costs will need all the tools in the clean flexibility kit. In particular, battery storage and DSF are key for providing daily flexibility, which is where the largest increase in system flexibility needs will come from as variable wind and solar continue to grow. Given their high potential but relative lack of attention from policy makers and energy system planners, the remainder of this report will focus solely on DSF and battery storage.
Why do we need clean flexibility?
Unlocking the benefits of the clean transition
Batteries and demand side flexibility, along with cross-border interconnection, are the key to a faster and cheaper energy transition.
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Battery storage and DSF today in Europe
Battery storage and DSF already provide flexibility in the EU
Batteries and DSF are already deployed in the EU. Batteries have seen recent rapid growth, driven by a few key countries. DSF remains an under-utilised option, often held back by regulation. For both technologies, open and readily available data to track their development is lacking.
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Unlike supply-side generation, which is recorded as it is produced, DSF appears as a change in demand, making it harder to measure and correctly attribute to active demand-side management. DSF is not a physical generator with a name-plate capacity that can be recorded. Instead, consumers (or aggregators working on their behalf) bid the volume of flexibility they are able to provide into various markets.
Tracking the use of DSF is challenging for several reasons. Often, the markets that DSF are bidding into are technology-agnostic, and transmission system operators do not publish information on the types of winning capacity. When information is reported, it is often scattered amongst reports concerning the various markets and flexibility services that DSF partake in, such as capacity mechanisms and frequency response. In addition, the services in which DSF can participate are not consistent amongst countries as different rules and entry requirements exist across Member States.
Outlook for clean flexibility in Europe
Promising potential for further deployment of batteries and DSF
The key role battery storage will play in providing future flexibility is generally acknowledged, whilst DSF remains overlooked.
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Despite strong expected growth, even faster deployment might be needed to align with EU climate targets. In a study conducted prior to the EU’s response to the gas crisis and Russia’s war on Ukraine, EASE estimated that the EU-wide energy storage capacity needs to double for the EU to reach its climate objectives, and calls for 200 GW of storage by 2030 to replace 55 GW of gas turbine flexibility.
The optimal mix of clean flexibility sources will, however, vary across countries. While detailed flexibility assessment exercises have been conducted for some countries (such for the Pentalateral Forum countries) or for the EU, by 2026, each EU country will have to assess their flexibility needs and set indicative objectives for DSF and storage. This new flexibility target-setting exercise will be guided by a EU-wide methodology developed by ENTSO-E and EU DSO, which should be ready by early 2025. However, as renewable generation is evolving faster than expected, early planning and implementation of clean flexibility will be key to integrate increasing levels of wind and solar, and countries should aim to carry out these assessments as soon as possible.
Policy Recommendations
Enabling a clean power system
Clean flexibility is an essential enabler of a clean power system, and it is now its time to shine.
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Empower participation through incentives
Consumers will be a crucial part of the energy transition. As the potential for demand-side flexibility increases, it is important that citizens and SMEs are empowered to participate. Households and businesses must be incentivised and rewarded for providing flexibility, for example through time-of-use tariffs that lower their bills for electricity used at off-peak times.
Take a people-first approach
Measures to ensure participation must cause minimal disruption to people’s daily lives. Steps must be taken to ensure low-income households, who often have the lowest access to technologies which allow consumer flexibility, such as EVs and heat pumps, are not left behind or adversely affected.
Energy communities can help enable households to take part in the energy transition, whilst also acting as intermediaries, with aggregators providing flexibility services for the grid.
Align enabling infrastructure with clean flexibility needs
As more devices are electrified, it is crucial the surrounding infrastructure and wider environment, particularly lower-voltage distribution grids, enables them to be used flexibly. Ensuring that heat management and electric vehicle charging infrastructure are ‘smart’ as standard ensures that customers can benefit from the possible savings that these technologies provide.
Supporting Material
Methodology
Battery storage - historical data sources
Data on large-scale batteries are scattered in reports on planning, permitting, grid connection requests, which might not always be consistent across each other and overtime. Ability to track deployment varies a lot by country, might be partial (e.g. reporting only power capacity and not energy capacity or duration of a facility) or challenging in the case of behind-the-meter systems due to their distributed nature, as reckoned in the EnTEC review of storage facilities in the EU.
Industry associations gather data on battery storage facilities, but full data access is normally restricted to their members, and updates are normally released on an annual basis.The European Association for Energy Storage (EASE) and LCPDelta curate a proprietary dataset on battery storage capacity in Europe, including operating capacity and projections (STOREtrack), and disclose a snapshot in their annual monitoring and outlook report on the European storage market. SolarPower Europe produces an annual outlook on European residential battery storage installations, which offers a good proxy for country-level behind-the-meter battery storage.
Data on grid-scale and behind-the-meter battery capacity by country are taken from STOREtrack and, in the case of Germany, from www.battery-charts.de.
Pumped hydro storage — historical data sources
Data on pumped hydro storage capacity by country are taken from Global Energy Monitor’s Global Hydropower Tracker (May 2023 release). The Global Hydropower Tracker is a worldwide dataset of hydropower facilities. The tracker catalogues hydroelectric power plants with capacities of 75 megawatts (MW) or more. It includes all facilities at this capacity threshold for operating, announced, pre-construction, under construction, and shelved units.
Capacity market results
Data retrieved from Terna , Forum Energii, ACER.
Battery and DSF scenarios
Every year, ENTSO-E carries out an adequacy assessment of the European grid to model possible events which can adversely impact the balance between supply and demand: the European Resource Adequacy Assessment (ERAA). ERAA 2024 input assumptions on battery storage and DSF are national grid operators’ best estimates at the time of data collection (November 2023-February 2024) and are available in the ENTSO-E Pan-European Market Modelling Database (PEMMDB). PEMMDB is one of the most comprehensive scenarios for clean flexibility resources. It includes projections for grid-scale battery storage, small scale battery storage, DSF and electrolyser power capacity projections (GW) by European country for 2026, 2028, 2030, 2035; battery storage energy capacity (GWh) by European country for 2026, 2028, 2030, 2035. Only capacity participating in the day ahead or intraday power market are included in the PEMMDB, capacity reserves are not included.
The preliminary updated version of the PEMMDB was published and consulted on in March 2024.
Acknowledgements
Alison Candlin, Reynaldo Dizon, Sarah Brown, Dave Jones, Kostantsa Rangelova, Chris Rosslowe.
Peer reviewersJacopo Tosoni (EASE), Martin Roach (EASE), Bram Claeys (RAP), Vilislava Ivanova (E3G), Simon Skillings (E3G).