Flexibility

The ability to adjust electricity generation, consumption, or storage in response to grid needs — whether for balancing supply and demand, managing congestion, or maintaining power quality. Flexibility is the central concept of this wiki.

EU legal definition

Regulation (EU) 2024/1747, Art. 2(79) provides the first codified EU legal definition of flexibility:

“The ability of an electricity system to adjust to the variability of generation and consumption patterns and to grid availability, across relevant market timeframes.”

This definition was introduced by the Electricity Market Design Reform 2024 and entered into force 16 July 2024. It emphasises three dimensions: (1) system-level adjustment (not just individual assets), (2) variability in both generation and consumption, and (3) relevance across all market timeframes — from real-time balancing to seasonal planning. (Source - Electricity Market Design Reform Regulation (EU 2024-1747))

For comparison, Eurelectric (2025) defines flexibility as “the ability of an energy system to adjust both power generation and consumption in response to signals from the grid, or the market, to ensure security of supply and avoid blackouts” — closely aligned but from an industry/operational perspective. (Source - What is Flexibility in the Power Sector (Eurelectric 2025))

Why flexibility matters

The Electric Power Transmission system has a fundamental constraint: electricity must be generated at the same rate it is consumed. Historically, this balance was maintained by dispatching large centralized generators up and down. Two trends are breaking this model:

1. Variable renewables (wind, solar) produce when conditions allow, not when demand requires. Supply becomes less controllable.
2. Electrification (EVs, heat pumps) adds large new loads at the Electric Power Distribution level, creating local capacity constraints.

Flexibility is the set of mechanisms that maintain grid stability and efficiency despite these changes.

Four-category flexibility taxonomy

The FlexAbility research project (Power Circle et al., 2025) extends the Swedish government’s three-category framework (Ei R2023:18) to four categories, mapping directly onto the four components of “trygg elförsörjning” (secure electricity supply) from Elmarknadsutredningen (SOU 2025:47):

The fourth category — beredskap (emergency preparedness) — is a new addition reflecting growing total defence and security framing in Swedish energy policy. (Source - FlexAbility Delrapport 1 (2025))

Two dimensions of flexibility

Temporal (when)

• Real-time / seconds: frequency regulation (FCR) — maintaining 50 Hz
• Minutes: automatic reserves (aFRR, mFRR) — restoring frequency after disturbances
• Hours: day-ahead and intraday market optimization
• Seasonal: long-duration storage, cross-border trading

Spatial (where)

• System-level: TSO needs — frequency balance, system adequacy
• Local/distribution-level: DSO needs — Congestion Management, voltage quality
• Behind-the-meter: customer-level optimization

Flexibility mechanisms

Rules-based vs market-based

Two approaches to procuring flexibility, often complementary:

Rules-based (implicit): flexibility mandated or incentivized through regulation and tariff design. Examples: dynamic network tariffs, connection requirements, grid codes requiring DER to provide voltage support, Villkorade Avtal (conditional connection agreements where curtailment is a contractual obligation). Lower transaction costs, less granular.

Market-based (explicit): flexibility procured through competitive markets. Examples: local flexibility markets, ancillary service markets open to demand-side resources, aggregator-dispatched portfolios. More efficient price discovery, higher transaction costs.

The EU Clean Energy Package makes this explicit in law. The Electricity Market Directive Art. 32 requires DSOs to procure flexibility via transparent, non-discriminatory, market-based procedures — rules-based approaches are permitted only where market-based procurement is uneconomic or would cause distortions. The Electricity Market Regulation Art. 3(j) requires that generation, storage, and demand response participate on equal footing. DSOs are expected to become neutral market facilitators (Directive Art. 31(5)).

The DSO flexibility challenge

This is where the wiki’s focus lies. DSOs (elnätsföretag in Sweden) face a new challenge: managing an increasingly active distribution grid with bidirectional power flows, local congestion, and voltage quality issues — all while remaining a regulated neutral party.

Key questions:

• How should DSOs procure flexibility? (markets vs. contracts vs. tariffs)
• How do DSO flexibility needs interact with TSO flexibility needs? (coordination, priority)
• What digital infrastructure is needed? (platforms, data standards, APIs)
• What regulatory framework enables this? (Ei rules, EU transposition)

Quantified flexibility potentials (2030)

FlexAbility (2025) quantified realistic technical maximum potentials across 14 resource types at hourly timescale for 2030. Seasonal totals at hourly timescale:

Short timescales (seconds–hours): dominated by Demand Response and Energy Storage. Long timescales (days–seasons): dominated by hydro (and gas turbines as reserve).

Investment slowdown risk: during the FlexAbility project period (2023–2025), wind, hydrogen, and industrial electrification forecasts were all revised downward — the 2024 preliminary potentials were higher. The 2030 numbers carry meaningful uncertainty, with the risk on the downside. (Source - FlexAbility Delrapport 1 (2025))

TSO flexibility needs

It’s not only DSOs that need flexibility. Svenska kraftnät faces a structural north-south transmission bottleneck across the four Bidding Areas (SE1–SE4), with the connection queue (>175 GW applied) far outpacing grid expansion (SEK 225 billion over 2025–2035). The NordSyd initiative will increase physical capacity over 10–15 years, but flexibility is essential in the interim. Svk explored conditional connection agreements at TSO level (analogous to Villkorade Avtal at DSO level) but found “managing full-scale implementation proved to be impossible with the systems and tools available today” — underscoring that the digital infrastructure gap exists at both TSO and DSO levels. (Source - Svk Network Development Plan 2026-2035)

The Network Code on Demand Response

The Clean Energy Package sets the principles; the Network Code on Demand Response (NC DR) will operationalize them into binding rules. The forthcoming regulation will establish: a standardized pathway from resource registration to market participation (CU → SP → SPU/SPG → prequalification), mandatory national flexibility registers, harmonized product attributes for local services, and detailed TSO-DSO coordination frameworks. ACER’s recommendation (March 2025) substantially revised the original ENTSO-E/EU DSO Entity proposal, redistributing provisions across four legal instruments. Key unresolved issues include minimum bid size (0.1–1 MW), the pace of EU harmonisation vs national flexibility, and the practical burden on small DSOs.

The CAPEX bias problem

A structural barrier to flexibility in Sweden: the intäktsramsreglering (revenue cap regulation) creates a CAPEX bias that incentivizes DSOs to invest in grid expansion over purchasing flexibility services, even when flexibility would be more cost-effective:

• Capital investments earn regulated return on the capital base — attractive for DSOs
• Flexibility procurement is classified as operating expenditure (löpande påverkbara kostnader) subject to efficiency requirements and historical-period lag
• Result: DSOs prefer building infrastructure over buying services, distorting the choice between grid expansion and flexibility

(Source - Ei Flexibility in Distribution Grids (2023))

The reform: TOTEX and lösningsneutralitet (from RP5, 2028)

Ei’s methodology for the 2028–2031 supervisory period (RP5) introduces a TOTEX (Total Expenditure) approach to the cost efficiency incentive, directly addressing this bias:

• TOTEX benchmarking includes both capital costs (CAPEX) and operating costs (OPEX) in a single efficiency framework
• A company that achieves congestion management through flexibility procurement (opex) scores identically to one that achieves it through grid investment (capex) — this is lösningsneutralitet (solution neutrality)
• Result: the regulatory incentive no longer systematically favors building over buying

Parallel changes reinforce this: switching from kapacitetsbevarande (market-valued assets) to förmögenhetsbevarande (acquisition-cost-valued assets) removes the upward drift in the capital base that made CAPEX returns especially attractive; and a new connection fee deduction ensures customer-funded investments don’t earn a double return.

Ei confirmed enstegsmetoden as the chosen TOTEX application method (December 2025). In May 2026, three further design decisions were announced: (1) no general efficiency requirement — actual cost outturns already embed industry-level productivity improvement; (2) full cost coverage at the third quartile (Q3) — companies at Q3 efficiency get 100% cost coverage, better performers get a revenue frame increase, below-Q3 companies get a deduction; the Q3 threshold is relative (moves as the sector improves), following UK practice; (3) 8-year realiseringstid (realization time) retained. Two parameters remain under investigation in spring 2026: adjustment for heterogeneous company conditions (electricity prices across bidding areas, ground conditions) and the maximum cap on the incentive’s revenue impact. Regulations enter into force H1 2027; revenue frame decisions by October 2027. (Source - Ei Inriktning intäktsramar 2028-2031 (2025), Source - Ei Effektiviseringsincitament Webb (2026-05-12))

The elmarknadshubb

A central electricity market hub (Elmarknadshubb) is widely identified as critical missing infrastructure for flexibility: it would give all market actors equal access to customer metering data, enable data portability, and lower entry barriers for aggregators. The original 2015 Svk mandate was paused in 2020 and formally cancelled in September 2025; the concept has been reframed as a centralt datahanteringsverktyg, now coordinated by Ei jointly with Svk toward a September 2026 proposal. The Network Code on Demand Response‘s FIS requirement is a direct driver. See Elmarknadshubb for full history and current status. (Source - Uppdrag Centralt Datahanteringsverktyg (2025))

A partial solution within the existing infrastructure is the Berättigad part mechanism, operational from 1 June 2025. It gives aggregators and energy service companies a standardized right to access consumer metering data at 15-minute resolution via PRODAT messages through each DSO — replacing the prior case-by-case power-of-attorney model. The limitation is that bilateral agreements with each of Sweden’s ~170 DSOs remain necessary, keeping the transaction cost high for entrants with geographically scattered customers. DHV/FIS is intended to reduce this friction. (Source - Svensk Elmarknadshandbok 26A (2026))

Flexibility for preparedness (beredskapsflexibilitet)

Energimyndigheten ER 2025:35 formally introduces beredskapsflexibilitet as a concept: flexibility resources that are activated only under crisis conditions, where activation costs or disruption would be unacceptable in normal commercial operation. This is the practical content of the fourth category (flexibilitet för beredskap) identified by FlexAbility. (Source - Energimyndigheten ER 2025-35 Förbättra Flexibiliteten (2025))

The four system operating states

The report maps beredskapsflexibilitet onto the formal operational state hierarchy used by Svenska kraftnät:

Specific beredskapsflexibilitet capabilities

Ö-drift (island operation): DERs — solar, batteries, EVs — can enable parts of the distribution grid to operate as microgrids independently from the transmission system during major outages. Requires coordinated inverter control but no physical hardware change.

Dödnätsstart (black start): batteries combined with renewables can restart the grid from a completely dead state. Traditionally this required specific hydro plants with black start capability; distributed DER-based black start is technically feasible.

Synthetic inertia (syntetisk rotationsenergi / syntetisk svängmassa): batteries with special inverter control settings can continuously emulate the frequency-stabilising inertia of rotating machines. This is distinct from FCR/FFR (which respond reactively to frequency deviations) — synthetic inertia acts preventively and continuously. Svk explicitly identifies a growing need for this capability as synchronous generator capacity is displaced by inverter-based resources. See also Energy Storage › Grid resilience capabilities.

Distributed redundancy: geographically spread DERs create resilience through redundancy — no single point of failure. Contrast with the Berlin incident (September 2025): arson on two 220 kV lines caused a 60-hour outage for 50,000 customers, illustrating the systemic risk of centralized critical infrastructure.

Cybersecurity risk from connected DERs

RISE simulations on the Nordic32 test system (documented in ER 2025:35) establish that Sweden’s installed base of connected DERs has reached a critical mass for systemic cybersecurity risk:

• ~300,000 internet-connected heat pumps (vätskeburna värmepumpar)
• ~1 GW / 1.6 GWh battery storage (end 2024)

A coordinated cyberattack — devices infected silently, then activated simultaneously on command — could cause grid frequency deviations outside normal operating limits. The threat is not individual device damage but system-level destabilisation. This is a generic risk across all internet-connected DERs.

Open communication protocols reduce this risk by distributing security responsibility across vendors rather than concentrating it in one proprietary codebase. See Flexibility Communication Protocols for the full protocol landscape.

The full treatment of the cyber-physical attack surface, the concentration-vs-decentralization tension, the NIS2 regulatory response, and the total-defence dimension is in Security and Resilience of the Digitalized Flexible Grid.

Data gaps

• Nordic TSO-DSO coordination models
• Flexibility product standardization (USEF, GOPACS, etc.)
• Art. 31.3 implementing regulation — quarterly DSO capacity publication requirement (Directive 2024/1711 transposed in Prop. 2025/26:16); implementing föreskrifter not yet issued by Ei or government as of May 2026
• Beredskapsflexibilitet regulatory framework — how are crisis-mode resources procured, compensated, and mandated?
• Synthetic inertia market design — what service product, prequalification, and compensation framework does Svk envisage?