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How a ‘flexibility gap’ could derail the European energy transition – and how we can fix it

As coal and gas generation are phased out, national grids face the challenge of balancing the intermittency of variable renewable generation with their country’s energy demands. A new report called The Energy Transition Readiness Index (ETRI) by the Renewable Energy Association (REA) and sponsored by Eaton, sheds light on the progress and challenges faced by European nations in embracing renewable energy.

The report ranks European countries based on socio-political support for the energy transition, ability to exploit new technologies and business models, and open market access for low carbon flexibility services. It looks at what it means to be ‘ready’ for the energy transition from the perspective of investors and developers of renewable energy projects.

The findings show that business enthusiasm for the energy transition is growing, with Germany and the UK showing vast improvements in their ‘investor attractiveness’. This indicates untapped investment opportunities in the energy transition and flexibility resources if the right policy environments are created.

Nordic countries like Norway, Denmark, Finland, and Sweden are leading in transition readiness, with well-developed flexibility markets. On the other hand, countries like Greece, Switzerland, and Poland have complex flexibility markets and weak commitments to regulatory reform.

The report recommends steps that European countries should take to address the challenge, including identifying future low carbon flexibility needs, accelerating flexibility market reforms, addressing technology and process barriers, setting clear flexibility targets, making coordinated plans to meet these targets, and devising policy interventions to incentivize flexibility.

As Europe faces the crossroads in its decarbonization journey, minimizing flexibility gaps will help countries pull ahead in their transition efforts. By creating fair, transparent, and accessible markets for private investment in demand-side flexibility, governments can drive the transition towards renewable energy.

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