The joy of flex: Embracing household demand-side flexibility as a power system resource for Europe
To meet its 2050 climate goals, Europe will need to purge its power sector of carbon emissions by the mid-2030s. This means integrating renewable energy resources such as wind and solar at an unprecedented scale and pace. Only one path allows for rapid decarbonisation while maintaining a reliable energy system, minimising system costs and increasing energy democracy. We must ensure that customers have the incentives and tools they need to adjust the flexible portion of their electricity use in ways that are beneficial for the system.
Flexible resources are essential to balance supply and demand and make best use of renewable generation.
In addition to climate impacts, the most recent energy price crisis has underscored the urgent need to release Europe from gas dependency — and therefore from exposure to gas price volatility — by progressing swiftly to a clean, efficient and electrified energy system.
This paper focuses on the greatest untapped source of flexible demand across Europe: household flexibility. Households can increasingly shift how and when they use electricity, without compromising utility or comfort, thanks to new digital technologies and storage. Yet, as the users with the lowest individual electricity use, they often face the greatest barriers. If enabled effectively, through inclusive access to flexible assets, markets and retail offers, there is an opportunity to improve energy services and reduce costs, which is particularly important for low-income and vulnerable households.
For household demand-side flexibility to take its rightful place in the energy transition, swift and concurrent effort is needed on multiple levels of policy and regulation. Underpinning this process is the principle that demand-side flexibility is more than an individual customer right; it’s a vital, cost-effective power system resource that should be valued as such.
Europe needs a cohesive regulatory strategy to create the infrastructure that will enable large-scale, aggregated customer flexibility. As a starting point, this paper presents a five-point action plan for scaling up household flexibility in Europe, with specific recommendations for carrying out each action.
- Action 1: Create robust tools for measuring and valuing customer flexibility.
- Action 2: Incentivise flexibility through energy market price signals.
- Action 3: Ensure a level playing field for demand-side resources.
- Action 4: Accelerate installation of flexible assets in homes.
- Action 5: Make flexible actions easy and safe for customers.
By investing now in strategies that wholeheartedly embrace household demand-side flexibility as a power system resource, Europe can avoid paying a much higher price later.