Flexible Energy Options Key To Energy Transition, Claims BNEF

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Flexible energy options such as energy storage, smart-charging electric vehicles, demand response, and interconnectors are a necessary part of an optimal energy transition, without which electricity grids will be forced to rely on fossil fuels for backup and excess generating capacity, according to new research from Bloomberg New Energy Finance.

Bloomberg New Energy Finance (BNEF) published a new pair of reports this week entitled Flexibility Solutions for High-Renewable Energy Systems which were written in partnership with Norwegian hydropower company Statkraft and power management company Eaton. The reports study the possibilities of solving power system flexibility challenges in the UK and Germany. Specifically, the reports look at how energy storage, smart-charging electric vehicles, demand response, and interconnectors can help accelerate the transition to a cleaner power system and help contribute to the integration of at least 80% more renewable energy by 2040.

Specifically, according to BloombergNEF, flexible technologies such as those mentioned above serve to help integrate large volumes of renewable electricity generation by shifting excess demand to periods of high renewable generation, or by storing excess generation for such periods of high demand.

“There is now little doubt that renewable energy will be the dominant force in the power sector for decades to come,” said Albert Cheung, head of global analysis at BloombergNEF. “The next challenge is to make sure these sources are complemented by clean forms of flexibility – storage, demand and interconnection – to deliver cheaper, deeper decarbonization.”

The two reports each focused on a separate country — the UK and Germany — and highlighted the fact that policies and regulations which accelerate the adoption of flexible technologies serve to make possible a cleaner, cheaper, and more energy efficient power system.

According to Bloomberg, key findings from each of the report include:


  • None of the scenarios halt the transition to a low-carbon power system. In all scenarios, the renewable share of generation exceeds 70% by 2030 as wind and solar become dominant, thanks to their dramatic and ongoing cost improvements. However, without new sources of clean flexibility, the system will be oversized and wasteful, making it 13% more expensive by 2040 and with 36% higher emissions.
  • Greater electrification of transport yields major emissions savings with little risk to the power generation system. Avoided fuel emissions far outstrip added power sector emissions in the U.K. The power generation system will comfortably integrate all these electric vehicles, and the system benefits are even greater if most EVs charge flexibly. However, local distribution networks are likely to face challenges.
  • Accelerated energy storage development can hasten the transition to a renewable power system in the U.K., with significant benefits by 2030 including a 13% emissions reduction and 12% less fossil backup capacity needed.


  • In Germany, adding flexibility supports coal through 2030, even as renewables grow to dominate the market. This counterintuitive finding is not due to a problem with batteries, EVs, demand response or interconnectors – cheap coal is the culprit. Flexible technologies are important because they can integrate inflexible generation – and in Germany’s case, its inexpensive lignite plants also benefit. To decarbonize, Germany needs to address existing coal generation while investing in renewables, flexibility and interconnection.
  • Still, by 2040, adding more batteries, flexible electric vehicles and interconnections with the Nordics all enable greater renewable penetration and emissions savings. More flexible demand, on the other hand, reduces the need for battery investment.
  • Even with Germany’s coal-heavy power, adding EVs reduces transport emissions.

“For Statkraft, as the largest generator of renewable energy in Europe, it is interesting to see that Nordic hydropower reservoirs can play an important role for decarbonization of the European power systems, together with other flexibility solutions,” said Henrik Sætness, SVP strategy and analyses at Statkraft. “This is consistent with our own analyses – confirming that a global renewables share of 70% is possible by 2040 if we let modern solutions for flexibility and market design allow cheap renewables to replace more expensive fossil solutions.”

“The relentless advance of solar and wind energy technologies are driving us inexorably towards an electricity system dominated by variable renewable power generation,” added Cyrille Brisson, Eaton EMEA vice president of sales and marketing. “Combined with the expected growth in electric mobility, we are now in the midst of an energy transition which will massively lower carbon emissions and improve air quality. However, this opportunity will be limited unless energy markets are designed and regulated in a way that unlocks the full value of flexibility in the electric system. The time is already upon us to prepare and start investing in the technologies, services, and modifications that can enable our energy system to cope with the dramatic shift in how we generate and use electricity.”

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Joshua S Hill

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