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Glossary · Energy industry & energy transition

Flexibility potential

flexibility potential flexibility load management Demand response storage heat pump Electromobility

Flexibility potential is the fundamentally existing ability of installations, consumers, storage units or generators to change their electrical power over time without unacceptably impairing the actual benefit of the application. It therefore does not mean every conceivable technical switchability. It means the amount of power, energy and time shift that could be made usable for the power system under certain conditions. The term is not a firmly defined legal concept. Studies therefore delimit it differently, for example as technical, economic or practically accessible potential.

The term combines several quantities. Power is usually stated in kilowatts or megawatts. It indicates how strongly a consumer, storage unit or generator can change its consumption or output at a given moment. Energy is stated in kilowatt-hours or megawatt-hours. It describes how much consumption or feed-in can be shifted, increased, reduced or stored over a period of time. In addition there are the duration of activation and the direction: an installation may be able to respond for ten minutes, for two hours or for several days. It can also either reduce its load (positive flexibility from the system's perspective) or increase it (negative flexibility). Lead time, the frequency of possible calls and any rebound effect also belong here. Without these time-related details, a figure for flexibility potential is hardly reliable.

A simple example is the charging of an electric car. The charging power can amount to several kilowatts, the battery can take up many kilowatt-hours, and the car is often not needed until the next morning. This creates a potential to shift charging in time. However, this potential exists only if the vehicle is connected, if the desired state of charge is reached in time, if the charging equipment is controllable and if a price signal or a control command actually arrives. Usable flexibility potential can therefore not be derived from battery capacity alone.

Distinction from flexibility, available flexibility and load control

Flexibility potential must be distinguished from flexibility. Flexibility describes the actual ability to adjust feed-in or consumption in a specific situation. Flexibility potential, by contrast, describes a possible resource. It is only unlocked through technical equipment, contractual rules, available data and economic incentives.

The concept of available flexibility is narrower still. Flexibility is available only if it can actually be called upon at a specific point in time. A heat pump can be operated flexibly as long as the building can store heat and comfort does not suffer. If the buffer tank is already empty or the building has cooled down, the room for switching off is small. In industrial processes, availability depends on production schedules, quality requirements, delivery deadlines and staff planning. For battery storage, it depends on the state of charge, the connection capacity, ageing costs and market commitments already entered into.

Load management is also more narrowly defined. It refers to actively influencing electricity consumption. Flexibility potential, by contrast, also includes storage, flexible generation and combinations of consumption, generation and storage. Demand response, in German EU legislation termed „Laststeuerung“, is defined in the Electricity Market Directive (EU) 2019/944. It means that final customers let their load deviate from their usual or current consumption pattern. This occurs in response to market signals such as time-varying prices or incentive payments, or through offers on an organised market. Flexibility potential is the upstream space of possibilities from which such responses can arise.

Technical potential is not a system resource

In debates about the power system, flexibility potentials are often described by simply adding up technical nominal values: number of electric cars times battery capacity, number of heat pumps times electrical power, number of home storage units times storage size. Such calculations show orders of magnitude. However, they say nothing about how much flexibility is actually usable. Simultaneity, availability, user behaviour and rebound effects are missing from them.

A heat pump has flexibility potential because buildings and hot water tanks retain heat for a certain time. In technical terms this is called thermal inertia. The installation can temporarily draw more electricity when a lot of wind and solar power is available, and run less later. This potential is limited by outdoor temperature, building standard, storage size, heating system, comfort limits and control technology. In winter, when heat pumps need particularly large amounts of electricity, their room for shifting is often smaller than in the transitional seasons. Stating the installed capacity across the board therefore easily overestimates the potential.

In electromobility, the potential lies above all in the charging time. Many vehicles stand for a long time but charge only during part of that standing time. Flexible charging can avoid load peaks, exploit low electricity prices and ease local grid bottlenecks. Feeding power back from the vehicle battery, bidirectional charging, extends the potential technically. Whether it pays off depends on battery wear, remuneration, grid charges, metering concepts, warranty conditions and user acceptance. A vehicle fleet is therefore not automatically a power plant just because its batteries are large on paper.

For industrial consumers, the potential is often valuable but less freely available than the connection capacity suggests. Cold stores, electrolysers, pumps, mills, compressed-air systems or certain heat processes can shift load. Other processes run continuously because interruptions cause high costs, scrap or safety risks. Flexibility there has opportunity costs: anyone who shifts production changes work processes, inventory, delivery commitments or plant utilisation. For the power system, this flexibility can be very valuable. However, it arises only with reliable remuneration and clear call conditions.

Why flexibility potential matters in the power system

As the share of weather-dependent electricity generation from wind and photovoltaics grows, the source of balancing changes. In the past, generation mainly followed load. In a power system with a lot of renewable feed-in, a larger part of demand, storage and dispatchable generation must respond to the electricity supply. Flexibility potential describes where this adaptability can arise.

The residual load is important here, that is, electricity demand after deducting feed-in from wind and sun. When residual load is high, dispatchable generation, storage discharge or lower consumption are needed. When it is low or negative, flexible consumers can absorb electricity, storage units can charge or generation plants can be curtailed. Flexibility potential helps determine how often such situations become expensive, how heavily the grids are loaded and how much renewable electricity has to be curtailed.

For grid operation, the location of the potential is just as important as its amount. A load reduction in southern Germany does not, as a rule, resolve a bottleneck in a northern German distribution grid. A battery storage unit behind a house connection can reduce local load peaks if it is controlled in a grid-serving way. However, the same storage unit can also amplify a local peak if it charges at low exchange prices while the local grid is already heavily loaded. Flexibility potential must therefore be described by location, grid level, time and callability.

The term is also central for markets. Exchange prices indicate scarcity or surplus across the entire market area. Grid charges, connection rules and technical requirements, by contrast, reflect local grid limits only in part. A flexible consumer can respond sensibly for the market and at the same time aggravate a local grid problem. The conflict arises where technical possibility, market rule and responsibility diverge. A technical flexibility potential becomes a reliable resource only when these levels fit together.

Legal framework in the EU and Germany (as of November 2026)

At EU level, Directive (EU) 2019/944 obliges Member States to enable and promote participation in demand response through aggregation. Final customers are to be able to participate in all electricity markets on an equal footing alongside generators. Market participants that pool flexibility bear financial responsibility for imbalances they cause in the grid. They are therefore either balance responsible themselves or transfer this responsibility. This makes part of the potential of small installations marketable.

With the electricity market design reform, Regulation (EU) 2024/1747, a regular national assessment of flexibility needs was introduced into the Electricity Market Regulation (EU) 2019/943 (Article 19e). It follows a European methodology approved by ACER. On this basis, Member States set an indicative national objective for non-fossil flexibility. The contributions of demand response and energy storage are shown separately in it (Article 19f). The Regulation provides for unlocking the identified potential by removing market barriers or through support schemes. Here the difference between potential and unlocked flexibility also becomes apparent in legal terms.

In Germany, Section 14a of the Energy Industry Act (Energiewirtschaftsgesetz) governs the grid-oriented control of controllable consumption devices in distribution grids in return for reduced grid charges. The Act names in particular heat pumps, non-publicly accessible charging points, cooling generation systems, electricity storage units and night storage heaters. The details are set by the Federal Network Agency (Bundesnetzagentur). Under these rules, devices in the low-voltage grid with more than 4.2 kW of power that went into operation from 1 January 2024 are mandatorily included. The grid operator may temporarily limit their grid consumption in the event of imminent overload, but not switch them off completely. This rule unlocks part of the potential for local grid purposes. At the same time, it shows that the same installation can be addressed by grid and market signals simultaneously.

Typical misinterpretations

A common mistake is to treat flexibility potential as a freely available reserve. Reserve in the narrower sense, such as balancing energy, must meet defined requirements: the installation must be prequalified, respond within specified times, be measurable and deliver reliably when called. Flexibility potential can become reserve if these conditions are met. Without this institutional embedding, it remains a possibility.

A second misunderstanding equates shiftable consumption with saved energy. If a heat pump runs later or an electric car charges at night instead of in the evening, electricity consumption does not necessarily fall. Usually the timing changes, not the amount of energy. Through storage losses or preheating, consumption can even rise slightly. Flexibility can nevertheless reduce system costs, relieve grids or integrate renewable electricity better without reducing annual consumption.

A third problem is double counting. The same battery can participate in the balancing energy market, optimise self-consumption, reduce grid charges, exploit price fluctuations on the exchange and ease local grid problems. However, it cannot be fully available for all purposes at the same time. Every use ties up power, energy, cycles and control priority. Reliable potential figures must therefore clarify for what purpose, at what time and under what constraints the flexibility is counted.

The reference line, often called the baseline, is also a source of error. To assess a load reduction or load shift, one must know how the installation would have run without a call. For households, commercial businesses and many industrial processes, this is hard to determine. If the baseline is set incorrectly, the flexibility provided is over- or undervalued. This affects remuneration, the settlement between aggregator and supplier, balance responsibility and the question of whether a measure actually helped the power system.

Unlocking through technology, rules and incentives

Technically, flexibility potential arises through controllable devices, storage capability and suitable metering. It becomes economically usable when price signals or remuneration cover the costs of adjustment. It becomes institutionally reliable when it is clear who is responsible for metering, control, balancing, data protection, grid security and liability.

For small decentralised installations, aggregation plays an important role. A single electric car or a single heat pump is too small and too uncertain for many markets. An aggregator can pool many installations, produce forecasts, coordinate calls and market the output. To do so, it needs data access, control interfaces and rules that clearly define its role towards suppliers, grid operators and balance responsible parties. EU law requires, among other things, non-discriminatory rules on data exchange for this purpose.

The digitalisation of metering and control technology is a prerequisite for this, but does not explain everything. An smart metering system makes consumption and feed-in visible over time. Control boxes can address installations. However, sensible use does not follow from this alone. It remains open which signal takes priority when the exchange price, a local grid bottleneck, self-consumption optimisation and user preference suggest different actions. Only priorities and rules turn flexibility potential into a plannable quantity.

The term therefore shows an important limit: the power system does not automatically have too little or enough flexibility just because certain devices are installed. It has as much usable flexibility as can be reliably activated under real technical, economic and institutional conditions. Flexibility potential describes the stock of possibilities. For security of supply, grid operation and market design, what counts is which part of this stock actually becomes available at the right time, in the right place and with clear responsibility.

Sources

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Edited by eCMS on 12.11.2026 05:05

© 2026 Erik Schmidt. All rights reserved. Quotations with a link to the source are welcome.