Energy flexibility is increasingly critical, with requirements expected to soar in the EU, the US and elsewhere. Explore five key trends that will shape the future of flexible energy systems, providing substantial benefits for utilities and their customers.
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Energy flexibility requirements are set to double in the EU between now and 2030. In the following years, we will see a sevenfold increase. Across the Atlantic, EVs and heat pumps will contribute to rising electrification needs. By 2050, electric heating and transportation could increase demand by up to 3,000 terawatt-hours. That number is nearly double the total 2015 electric load.
With such figures in mind, it is little wonder that utilities and energy companies are turning to energy flexibility for solutions. The ability to adjust power generation and consumption in response to fluctuating supply and demand has already shown strong results.
The UK, for example, has utilised grid flexibility in trials to collectively save enough electricity to power the equivalent of almost 10 million homes. By 2030, flexibility from heat and transport alone could unlock 30 TWh of renewable generation, reducing the use of costlier fossil fuels. The savings could reach around £5bn a year by 2035 and almost £100bn over 2025-2050.
Energy flexibility savings come with added benefits. Done right, it supports integrating more renewable energy sources, increasing grid reliability, and using existing infrastructure optimally.
To make the most of the available opportunities, utilities and energy companies should pay close attention to five key trends defining the future of energy flexibility.
Artificial Intelligence (AI) is rapidly transforming how utilities manage and optimize energy systems. By leveraging vast amounts of data, AI enables predictive analytics for demand forecasting, grid optimization, and anomaly detection.
One example is the United Nations Development Programme (UNDP)’s collaboration with IBM on an AI-powered interactive model to forecast energy usage. Such tools help visualize complex energy scenarios, anticipate growth, and integrate innovations like electric vehicles (EVs) and smart grids.
AI also enhances the capacity to forecast, simulate, and manage grid dynamics and distributed energy resources (DERs). Another AI ability is to optimise the use of the energy produced. One example is during overproduction of renewable energy.
Optimising the lifetime performance of infrastructure is another area where AI algorithms can assist utilities. With data from IoT sensors, the algorithms can detect and prevent equipment failures.
Distributed energy resources are set for worldwide growth. Analysts expect that the US DER market will nearly double by 2027. Many other countries show similar trends. Much of the expansion will be driven by EVs, heat pumps, and investments in renewable energy systems.
As a result, the energy grid becomes more decentralized, making Distributed Energy Resource Management Systems (DERMS) essential.
DERMS help integrate and manage DERs, including rooftop solar panels, wind turbines, EVs, battery storage systems and more. Via DERMS, utilities gain enhanced visibility and control over distributed assets, optimizing their flexibility, performance, and contribution to overall grid stability.
DERMS are among the non-wire alternatives to building out energy infrastructure to handle the growth in DERs. In this way, they help utilities cut expenses and optimise the use of existing infrastructure.
Electric vehicles (EVs) and heat pumps are on steep growth trajectories. For energy companies, it is imperative to transform the energy-intensive units into assets in a flexible energy grid.
Emerging V2G and V2X technology are essential, considering that an EV charger can double a household’s peak power demand. However, a bidirectional charger and advanced smart charging enable EVs to discharge energy back to the grid or to the home during peak demand periods.
EVs can also be used as flexible assets to absorb otherwise wasted wind and solar energy when production is higher than consumption. True Energy is working with the Faroe Islands to supply such solutions. Heat pumps offer similar flexibility abilities, such as the ability to pre-heat our homes and office spaces when demand is low to avoid peaks and smoothe demand.
The transition to a flexible energy system is a collaborative effort involving utilities, regulators, consumers, and third-party service providers.
The speed of change – and the new opportunities constantly appearing – makes time-to-market a key contributor to success. In this context, collaboration with trusted third-party providers is a way to shorten said times while keeping development costs at a minimum.
This also applies to solutions aimed at the increasing number of consumers that are becoming “prosumers,” generating their own energy through rooftop solar panels and other DERs and feeding excess power back into the grid.
Another prosumer empowerment is digital platforms and smart technologies coupled with smart meters that enable consumers to monitor and optimize their energy usage in real time.
The underlying change in the energy sector driven by technologies like AI, DERMs and EVs cannot be overstated. The industry is, on a fundamental level, moving toward a distributed, renewable future.
In this context, digitisation is key, which means embracing a software-centric approach. Done right, it enables utilities to grasp the vast opportunities found in advanced data analytics, IoT connectivity, and real-time communication to manage complex, decentralized energy systems effectively.
This will increase the ability to meet future demands, run a cost-efficient business, and meet current and coming environmental standards. According to the World Economic Forum, digital solutions could reduce global emissions by 20%
In a digital future, cybersecurity and data privacy are critical considerations. Protecting the grid from cyber threats becomes paramount as more devices and systems become interconnected. Investments in secure communication protocols and data management practices are essential for maintaining trust and reliability.
The potential benefits for companies managing this correctly are substantial. In the EU alone, demand-side flexibility could reduce renewable energy curtailment by 15.5 terawatt-hours, saving €2.7 billion annually compared to installing additional generation capacity.
Based on such figures, the question becomes not if but how much your utility or energy company will benefit from prioritising energy flexibility.
