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This report has been prepared by the Expert Group 3 (EG3, 'Regulatory Recommendations for Smart Grids Deployment') of the Smart Grids Task Force and it aims at providing concrete recommendations for removing regulatory barriers and incentivising the uptake of flexibility from distributed resources. The report seeks to identify flexibility services, relevant value chains, but also the necessary commercial and market arrangements, while it answers the question on how different actors can be incentivised to provide and use flexibility.

The IndustRE project is pursuing similar objectives for maximising the potential of demand flexibility from large industrial consumers.

Demand Side Response (DSR) is a key component in the successful evolution of the power system from a conventional based generation system to one that has significant contributions from intermittent sources of generation and power intensive loads. To achieve the EU’s 2030 and 2050 energy policy and decarbonisation targets, DSR uptake must therefore be broad and deep.

This report addresses the issue of negative electricity prices and identifies their cause as the lack of flexibility in the electricity system. It recognises that lack of flexibility burdens consumers in the form of an increased renewables surcharge and proposes that regulators must also act in order to insist on more flexibility.

One of the main conclusions it that without a significant increase in the flexibility of power plants and large consumers, the hours with negative electricity prices will increase drastically. This is of valuable input to the IndustRE project at the moment we shape the business models and market barriers for system flexibility.

This advice paper is designed as input to advance the ongoing discussion about the scope, players and benefits of demand-side flexibility from both a network and market perspective. This work is part of an ongoing process that should contribute to assistance for National Regulatory Authorities (NRAs) and EU Member States (MS) on how to encourage the participation of demand-side resources in their markets and networks. It also sets out regulators’ views on the high-level principles which should govern demand-side flexibility and allow it to be facilitated at the wholesale, network and retail levels.

EURELECTRIC welcomes the opportunity to respond to the CEER consultation “Regulatory and Market Aspects of Demand-Side Flexibility”. Demand-side flexibility and the broader concept of demand response (DR) are stepping stones towards empowering end-customers to become active deal-seekers and reap the benefits of competitive markets. Incidentally, engaged customers are crucial to help solve the new challenges emerging on the way to tomorrow’s energy system with increased renewable energy penetration and decentralisation. "We understand the importance of solving the technical, behind the scenes aspects of DSF but we think CEER should have devote more attention to the customers themselves, their needs, the potential impacts and benefits of DSR for them as nothing will be possible without engaged customers."

This Public Consultation document draws on an initial literature review, inputs from CEER members and an internal survey among national regulatory authorities (NRAs) to establish a view on how demand-side flexibility arrangements (both market-led and network-led) operate in different Member States.

The scope of this document is to give an overview about marketing strategies for smart energy networks. It intends to present concrete yet universal business cases that are applicable in most countries of the North Sea Region.