Area of Expertise

Flexibility Needs Assessments

The Electricity Market Design, adopted in 2024, foresees the obligation for Member States to assess their flexibility needs, using a common methodology – the very first step to ensure the proper deployment of energy storage solutions for the years to come.

This methodology is being designed by ENTSO-E & EU DSO, and will be handed to ACER in April 2025 for final publication in June 2025. The timeframe is short for something that will tremendously influence the successful deployment of energy storage solutions and thus also renewable energy. Indeed, more renewable energy means higher needs in energy storage & demand response. In fact, flexibility requirements are expected to double by 2030 and grow 7 times by 2050 compared to today!

In September 2024, the Energy Storage Coalition organised a workshop to gather stakeholders’ perspectives. At the time of the workshop, the Coalition advised that the methodology should ensure a series key features including a fair economic valuation of flexibility sources without disregarding revenue streams; a technology-neutral approach; and a scenario-based flexibility needs analysis.

On 8 November, EU DSO and ENTSO-E opened a public consultation on the draft version of the methodology. While the draft methodology offers a valuable opportunity to improve flexibility needs assessments, several areas need refinement.

The Coalition noted the following shortcomings to be addressed in the current draft methodology:

Without clear guidance on relevant data and methods, it is unclear if flexibility needs are fully captured and whether ERAA results are simply duplicated;
The methodology leaves room for interpretation, lacks detailed computations, and allows broad “fine-tuning” discretion;
Additionally, a governance framework for TSOs-DSOs to consult national entities or stakeholders is absent;
Key methodological requirements from EMD Article 19e(4,b) – such as accounting for all flexibility sources cost-efficiently and planned investments – are not fully respected;
ERAA’s simplifications, while suitable for resource adequacy, become oversimplifications in the flexibility needs and replicate the same drawbacks as ERAA;
Resource adequacy and flexibility are deeply interconnected and must be addressed together for robust results.

Accordingly, the Coalition proposes the following improvements:

An ‘authorship statement’ clarifying modelling limitations for policymakers, as all stakeholders should be aware – including policymakers who receive the Flexibility Needs Assessments report – of the modelling limitations and what can or cannot be inferred by the analysis;
Significant improvements in the European Resource Adequacy Assessment would enhance the economic viability analysis;
A phased implementation of the methodology could be considered to avoid limiting its ambition and usefulness.

Given the importance of this work and the challenging deadline behind it, we invite ENTSO-E, EU DSO and ACER to consider the Coalitions’ input and remain at their disposal for further collaboration.

Useful links

Reply to EU DSO and ENTSO-E Public Consultation

Worskhop on Methodology for Flexibility Needs Assessments