Flexibility markets — a new opportunity for utilities in a new era of energy

The electric grid is facing the most disruptive point in its history. As the rise of renewables and DERs continues, system operators must adjust to a future where controlling and predicting energy supply is a far more complex challenge.

A growing reliance on renewables will mean that, increasingly, grid stability is disrupted by sudden energy fluctuations. As a result, operators will need the ability to continually manage short-term power imbalances. A failure to do so could lead to rising energy costs and blackouts, eroding confidence in system reliability.

Yet supply volatility can also bring new opportunities — including the creation of ‘flexibility markets’. The subject of a recent Gartner report, flexibility markets have the potential to bring stability to the grid and accelerate the energy transition. 

Access the full Gartner report to learn more, and read on to find a summary of the discussion.

Capitalizing on the challenges of the energy transition

Historically, system operators have been able to generate and dispatch energy based on real-time demand. But the move from fossil fuels to renewables introduces unpredictability into the mix. To prevent constant disruption, operators will need new solutions to deal with intermittency.

This is where ‘flexibility markets’ can play a crucial role.

Already established in Europe, these markets allow additional balancing resources to be exchanged between participants across the electricity value chain, from generation asset owners right the way through to consumers.

System operators benefit by procuring resources (such as spinning reserve and storage) to solve congestion issues, and prepare for anticipated network constraints. Looking ahead, flexibility markets can also offer operators a way to manage renewable intermittency — by accessing load and generation resources from a wide network of aggregators.

Energy aggregators have a clear opportunity here too, with the potential to generate revenue by supplying resources to meet demand.

Taking the next step

The energy transition will fundamentally transform grid management. Yet alongside industry disruption, new opportunities are emerging. Flexibility markets are one such example, and promise multiple benefits — from ensuring grid stability to driving adoption of clean energy.

What’s the right next step for system operators? Gartner’s recent report offers several recommendations. In addition to monitoring industry policies and building partnerships with industry collaborators, utility CIOs are urged to consider important technical requirements, such as making use of existing APIs to operate in open energy markets

Ready to find out more? Gain access to Gartner’s full report and recommendations.