Europe’s energy independence must be powered by local, fossil-free flexibility 

Following the recent war in the Middle East, energy prices globally – and in Europe – are on the rise. In the 44 days since the start of the conflict, President of the European Commission Ursula Von der Leyen highlighted that “our bill for fossil fuel imports has increased by over EUR 22 billion”.  And even if the war was to end tomorrow, oil and gas prices are projected to stay high, impacting Europeans’ energy bills.

This is the price of our fossil fuel dependency. Once again, Europe finds itself grappling with the consequences of global conflicts on its energy supply – uncertain of what prices will look like from one day to the next.

This is not a new story. We saw it with the 2022 Russian invasion of Ukraine, and we’re seeing it again now. The EU is scrambling to respond to price volatility and protect its population from another price shock. 

The answer is there: homegrown renewables. And Europe knows it.   

Spain has shown that by steadily investing in renewables over the past decade, they are able to cushion price shocks. Right now, everyone agrees that homegrown renewables are the way. EU Commissioner for Energy Dan Jørgensen has made clear that the way forward is “more renewables, as fast as possible”. 

It seems that Europe is learning the lesson: beyond climate, renewables mean independence for Europe. And indeed, renewables in Europe are unequivocally on the rise. Electrification is high on the agenda.  

But Europe is hitting a snag: grids are at capacity, increasingly over-burdened by the amount of renewable energy produced. At least 120 GW of planned renewable projects in Europe are at risk due to grid constraints. Congestion is becoming a bigger issue by the day. More electric and more renewables in this context will not get Europe to where it needs to be if we don’t manage to balance the energy system.   

There is a response: increasing storage and fossil-free flexibility.  

What does this mean exactly?   

Fossil-free flexibility means being able to, in real time, adjust demand and supply of energy, only using clean technologies rather than gas power plants. This is possible thanks to, among other things: photovoltaic, storage, heat pumps, electric boilers or electric vehicles operated by smart appliance control, as well as energy management systems.  

Fossil-free flexibility not only helps balance the grid, but it also helps bring down prices of energy even more. Using electricity when it’s cheap and storing it when it’s expensive and altogether avoiding using gas that drives electricity prices up and makes them volatile. 

A flexible system enables the continued roll-out of renewables, avoids wasted renewable electricity, prevents grid issues while spreading out or avoiding expensive intervention on the grid – keeping bills low and under control. 

Fossil-free flexibility and storage are essential in Europe’s quest for homegrown independence.  

And guess what? These solutions are often local.  

Local stakeholders – municipalities, citizens, communities, businesses – play an essential role in implementing such solutions.  

Not only are they energy consumers, but they also play an active role, producing, storing, and managing energy locally. Local, smaller-scale deployment of renewables carries a big potential in renewable and flexibility production. 

Local stakeholders also manage key flexibility assets, such as heat pumps, electric boilers, and storage. They are essential providers for small and medium-scale storage, with commercial and residential storage representing 65% of the EU’s total storage capacity. 

Buildings, which are managed at the local level, are also a major field for flexibility. According to Solar Power Europe, they could cover 40% of the flexibility needs by 2030.  They also cover 61% of total solar capacity and could reach 40% of the EU’s electricity demand by 2050. 

Local governments and energy communities also can engage citizens and SMEs in fossil-free flexibility. Local authorities know what their areas need, and the options available, and can coordinate people and space to enable flexible energy solutions. 

A few examples. 

Local energy communities can be vehicles of this demand-driven flexibility, as shown by the community energy project Romaflex in Italy, developed by Enostra. It connects households, small businesses, and public buildings that produce or use renewable electricity, often with solar panels or batteries.  

A digital system monitors energy use and production in real time and shifts electricity consumption to times when renewable energy is available. The local grid operator can also buy this flexibility to help manage the electricity network in the area. 

The way a neighbourhood is planned, and buildings are designed also can enable flexibility. In Utrecht for instance, a new neighbourhood with about 4,000 homes is being designed to work more efficiently with the electricity grid and require less grid capacity, through a collaboration between the municipality and the local DSO  

The homes use a mix of energy efficiency, solar power, batteries, and smart appliances that can adjust when electricity is used. By spreading electricity use more evenly throughout the day, the neighbourhood reduces pressure on the grid and makes it easier to connect new homes. 

In the UK, the electricity system operator NESO launched a new marketplace in 2023 to help manage grid congestion in Scotland. The system allows local energy users and producers to adjust their electricity use or generation when the grid is under stress. For example, electric vehicle chargers, homes that can shift their electricity use, or small energy producers can temporarily change their consumption or production to help keep the grid balanced. 

All these examples show us: these solutions are being managed at local level. 

In the way they are used, designed and implemented. 

The EU needs to focus on accelerating fossil-free flexibility solutions. And there are no better actors for that than local governments working with the local ecosystem. This means that if the EU is serious about homegrown energy independence, it urgently needs to invest into decentralised systems and local solutions – making sure it’s fully supporting local actors in their transitions. 

This is the only way it can maintain stability in an instable world, reduce dependencies and stand strong in an increasingly tense geopolitical climate.  

Dive into our latest Policy Paper to find out more!