Key technologies like battery storage, electrolysers, and electric mobility are essential to respond effectively to these fluctuations and support grid stability.
Germany serves as a prime example of this pressing need for flexibility. The country currently has battery storage projects with a combined rated capacity of 161 GW awaiting approval from transmission system operators. To put this into perspective, that is double Germany’s peak electricity demand.
Understanding how demand will evolve over the coming decades is crucial for accurate power price forecasting. The share of flexible demand is particularly significant due to its potential impact on price formation. Increased levels of flexible consumption can respond to volatile prices, thereby reducing overall price volatility. This, in turn, stabilises revenue streams for power generators and mitigates the occurrence of very low or even negative price periods.
Our analysis, which covers 18 European countries, indicates that by the middle of the century, approximately 50% of total electricity demand will come from flexible sources. This shift will play a pivotal role in shaping the future energy landscape, enhancing the reliability and efficiency of power markets.
