According to forecasts, in 2035, 60 percent of power generation capacity will be weather dependent – and therefore variable. This means that flexibility is becoming an increasingly important factor in the energy market. Flexible electricity producers and consumers stand to benefit from numerous opportunities to cut costs and generate revenue. Exciting examples of this were presented at The smarter E Forum during EM-Power Europe 2025.
Where can the necessary flexibility come from? Building management plays a key role: “Buildings are the sleeping giant of flexibility,” said Romain Serres, Managing Director of French company Tilt Energy. Buildings account for 40 percent of the final energy consumption. The flexibility capacity in the building sector in France alone is equivalent to the output of six nuclear power plants, explained Serres.
This, however, requires sophisticated algorithms, as the number of connected electric devices for heating, cooling and charging electric vehicles is expected to increase fivefold in Europe between 2023 and 2030. As the electricity markets in different European countries vary in structure from one to the next, there is no one-size-fits-all model for flexibility. Nevertheless, the core principle remains the same: Millions of consumers must be orchestrated to use electricity at exactly the right moment. Achieving this requires a combination of connected devices, rooftop solar installations, charging stations for electric vehicles and battery storage systems.
The market is clearly signaling the need for new approaches, said Kai Becker, Head of Development at marketing company Energy2market: “The negative electricity prices on the spot market are a clear call for flexibility.” For industrial battery storage systems, he explained, different use cases are attractive depending on the season: In winter, peak shaving proves the most useful for preventing expensive peak loads in electricity consumption. One aluminum plant, a customer of Energy2market, for example, saves 200,000 euros each year through this measure alone. During the summer months, trading on the short-term electricity market is particularly worthwhile, due to significant daily fluctuations in spot market prices.
Because market situations vary throughout the year, storage systems are used as part of a multi-market model, Becker explained. Although all new flexibility providers will tend to smooth out fluctuations over time, current revenue models are expected to remain relevant – due to the continued expansion of power generation from renewable sources of energy. “We expect spot market spreads to continue to grow over the next five to six years,” predicted the electricity marketer.
Finn Neugebauer, Head of Sales at battery management company be.storage, identified four specific use cases for electricity storage systems for industrial customers. One attractive option is peak shaving, which helps reduce grid charges, since, for companies with registered power measurement, their annual peak load determines their base rate for the entire year. Other revenue models, he says, include optimizing self-consumption from photovoltaics and procurement, which is often based on spot market prices. If feeding electricity back into the grid is a possibility – subject to approval from the grid operator – sales revenues can also be generated on the power exchange.
Lennard Wilkening, Managing Director of energy marketing company Suena, gave his assessment of the various markets where battery storage systems can operate: “The importance of the continuous intraday market is growing.” This is the most short-term of the spot markets, which also include the day-ahead trading and intraday auctions held at several fixed times each day. In principle, trading on short-term markets is becoming increasingly interesting. The markets for balancing power are also being utilized, including primary control reserve as well as negative secondary balancing power.
Battery storage systems connected to power plants, such as those using wind or solar power, operate according to their own distinct logics – depending on whether they are co-location storage systems, hybrid storage systems or projects developed under the innovation tenders of the Renewable Energy Sources Act (EEG). Each concept follows its own rules, stated Wilkening. What all these models have in common, however, is that they need large volumes of background data for optimization – ranging from fundamental market data and weather forecasts to real time system data, including the batteries' state of charge. The challenge lies in optimizing this data in line with price forecasts. Accordingly, Wilkening explains, trading must be automated: “It has to happen within milliseconds.”
Even when designing the plants, commercial optimization must be based on prior experience. One critical factor is “overbuilding” – the extent to which the total capacity of the storage system and power plant exceeds the capacity of the relevant grid connection point. Given the complexity of optimizing the load flows of power plants and storage systems, it is generally advantageous to have the same marketing company for storage and renewable power generation.
A specific approach to flexibilization in the context of sector coupling was presented by Markus Fleschutz, Business Development Manager at Entelios AG: generating process heat through power-to-heat technology. “The negative secondary balancing power is an attractive option for power-to-heat,” stated Fleschutz. If there is surplus electricity in the power grid, it can be diverted from the grid to heat up hot water tanks. If a hot water tank is already available, it can be upgraded for power-to-heat relatively inexpensively. Fleschutz cited the example of a 10 megawatt boiler conversion that paid for itself in just 1.7 years.
However, the current structure of grid charges still hampers these kinds of flexible electricity use models in many places, as the system rewards steady grid utilization. In Germany, companies that draw disproportionately high amounts of power from the grid at short notice – in the interest of the overall system – are put at a disadvantage. The main culprit: Germany’s 7,000-hour rule. Under this regulation, companies only qualify for reduced grid charges if their plants operate at least 7,000 full-load hours per year. This practice has long proven a stumbling block on the path to flexibilization. “We’re waiting for the 7,000-hour rule to be abolished,” said Fleschutz. For energy-intensive operations, he added, it has so far been “a handbrake on flexibility.”
The energy transition makes flexibility a valuable commodity. Whether through battery storage systems, power-to-heat or intelligent building management – those who market their capacities intelligently can cut costs, unlock new revenue models and contribute to grid stability at the same time. With the much-anticipated reform of grid charges on the horizon, companies will soon have even more opportunities to profitably leverage their flexibility in the future.
Our trend papers provide you with background information and current developments in selected areas of the new energy world. Here you can find the overview of all Trend Papers.
You were unable to attend the event or missed a session? No problem! Most of the presentations are available for you on The smarter E Digital.
