Demand side flexibility in Europe: 130-164GW by 2030

New modelling from smartEN (Smart Energy Europe) and DNV suggests huge scale potential from flexibility for consumers and the clean energy transition.

The study, aimed to provide a comprehensive assessment of demand side flexibility in the EU, finds benefits at the wholesale level, for security of supply, for the distribution grids and for consumers in general, both those with flexible assets as well as those without, in 2030.

In this context demand side flexibility encompasses flexibility from buildings, electric vehicles and industry.

At the wholesale level, the activation of 397TWh of upward flexibility (i.e. increase of generation or decrease of demand) and 340.5TWh of downward flexibility (i.e. decrease of generation or increase of demand) is estimated to lead to €4.6 billion (US$4.5 billion) or 5% in savings due to the resultant lower generation costs.

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Moreover, the power system could serve all demand all year long, saving €9 billion on ‘lost load’ not served by the available generation, while renewable energy curtailment would be 15.5TWh or 61% less, improving the economics of renewables and the availability of decarbonised electricity.

This would then result in 37.5Mt savings in greenhouse gas emissions, which would exceed the ‘55% by 2030’ target.

On the security of supply, the modelling suggests that the energy system in 2030 would lack at least 60GW of generation capacity during the highest demand peaks. Enabling 60GW of demand side flexibility would save €2.7 billion annually compared to installing 60GW of peak generation capacity.

Activating these technologies in European balancing markets in 2030 could save a total of €262–690 million across the EU27 – a balancing energy cost saving of up to two-thirds.

For the distribution grid the benefits are estimated at €11.1–29.1 billion through savings in investment needs annually between 2023 and 2030. This corresponds to between one quarter and three quarters of the current forecast investment needs (between €253.1 billion and €282.5 billion) for the low and medium voltage distribution grids to integrate new loads and renewables capacity.

Finally, for consumers, those with flexible assets could see a potential cost reduction of more than €71 billion, almost two-thirds, per year on electricity consumption, while the indirect benefits could reach over €300 billion resulting from reductions in energy prices as a whole, generation capacity costs, investment needs for grid infrastructure, system balancing costs and carbon emissions.

Commenting, Michael Villa smartEn Executive Director, referred to the peak electricity demand reduction target introduced in the recent emergency market design interventions.

“As pointed out in the study, the active role of consumers makes enormous sense both now, for this emergency situation, and in 2030, to help integrate renewable electricity and achieve our 55% greenhouse gas reduction in a cost-effective way.”

The study is intended to fill what is a gap in research on demand side flexibility in Europe but presents some limitations, partly due to data unavailability at the European level, it states.

Moreover, some questions are worth analysing and among the recommendations is to Improve transparency on the current deployment of demand side flexibility in wholesale and balancing markets and to assess and mitigate any regulatory, economic and/or business challenges that may cause bottlenecks to further deployment.

A common methodology for states to quantify the potential infrastructure savings resulting from a full deployment of demand side flexibility should be developed and there should be investigations on the energy efficiency potential resulting from flexibility deployment and the impact of more large-scale flexibility deployment on the investment climate for renewables generators