Unlocking Flexibility in Europe
The EU energy system faces unprecedented challenges, driven by the energy prices crisis, originating from the Russian invasion of Ukraine, and the need to accelerate decarbonisation of energy production and consumption. In response, the EU launched the REPowerEU plan and, in 2024, adopted reforms of the Electricity Market Design, reinforcing the role of Distribution System Operators - DSOs- in enabling flexibility, resilience, and consumers’ central role in the future EU’s energy market. By June 2024, Russian gas imports had dropped from 45% (2021) to 18% (planned to be completely phased out by 2027), while renewables reached 50% of EU electricity generation. These shifts, alongside the EU Green Deal and Fit for 55 package, have increased pressure on DSOs to integrate RES, expand infrastructure, and adapt to more decentralised systems. Already, 247 GW of RES—mainly PV—are connected to networks of the DSOs participating in our analysis.
At the same time, regulatory experimentation is gaining momentum, enabling DSOs to test innovative solutions while managing the energy transition. According to the survey, 56% of DSOs participate in such schemes, with the great majority of them engaged in pilot smart grid projects. As the energy landscape continues to evolve, regulation must move beyond a narrow focus on cost efficiency and traditional grid reinforcement. It should actively support digitalisation, flexibility, and decentralised energy models. While incentives for continuity of supply and network operational efficiency are widespread, only 15% of EU countries currently offer incentives for flexibility—despite its rising importance.
Surveyed DSOs also highlighted key short- to mid-term challenges, including grid capacity constraints, rising connection requests for RES, the need for investments aligned with EU climate goals, and the absence of enabling regulatory frameworks and targeted incentives.
MELETIOU Alexis;
VASILJEVSKA Julija;
VITIELLO Silvia;
2025-06-18
Publications Office of the European Union
JRC141953
978-92-68-28475-9 (online),
1831-9424 (online),
EUR 40350,
OP KJ-01-25-326-EN-N (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC141953,
10.2760/7123923 (online),
