Increase System Efficiency Through Demand-Side Flexibility of End-Users

EASE, together with 16 European business organisations supporting the cost-effective decarbonisation of Europe’s energy system, have come together  to encourage the European Commission to put forward an ambitious ‘Fit for 55’ Package that fosters system efficiency through the empowerment and active participation of all European energy end-users, to unleash their demand-side flexibility from demand response, distributed energy storage, renewable and efficient generation.

Demand-side flexibility is the bridging solution supporting greater electrification and smart sector integration, it helps stabilise an increasingly variable power system and contributes to reaching climate neutrality cost-effectively.

Demand-side flexibility from all end-use sectors is a reliable, accessible and competitive resource to meet the new requirements of the decarbonisation challenge. Making these benefits a reality requires the activation of all end-use sectors through the development of an economically attractive business model.

The 16 European business organisations ask the Commission to:

• Give the deserved political relevance and visibility to demand-side flexibility, both at European and national level, notably by setting clear milestones for its activation to reduce peak demand.
• Ensure that a comprehensive assessment of the demand-side flexibility potential of all end-use sectors – buildings, industries and transport – is carried out at Member State level and national plans are developed to activate it in order to ensure system adequacy and support a cost-effective decarbonisation. Such assessment should be reported in future updates of the National Energy and Climate Plans.
• Evolve from a static to a dynamic approach to energy efficiency to help the cost-effective uptake of variable renewable energy. A modern understanding of energy efficiency should incorporate flexible, time-dependent, dynamic and data-driven consumption and self-generation patterns. This does imply that savings obtained during peak-demand and savings from avoided CO2 emissions would be valorised, recognising their contribution to system efficiency.
• Ensure all end-use sectors have the right to interact with the power system, including through local peer-to-peer trading, and are fairly rewarded to contribute to increase system efficiency by flexibly adapting their energy consumption, storage operation as well as on-site renewable and efficient generation. In this light, smart charging for electric vehicles and building renovations aiming to activate and smarten buildings should be promoted in the forthcoming revisions of the Alternative Fuels Infrastructure and Energy Performance of Buildings Directives.
• Guide Member States and regulated entities to valorise demand-side flexibility and prioritise non-wires alternatives in their electricity networks development plans, when more cost-effective. This would require developing smart grids, and the establishment of harmonised “smart grids indicators” by National Regulatory Agencies would be beneficial.