The energy transition is no longer a gradual evolution of existing infrastructure. It is a structural transformation of the energy system—redefining operational paradigms, regulatory frameworks, and value creation models across the sector. In this context, energy flexibility is emerging as a critical enabler, ensuring not only grid stability, but also enabling the rise of a decentralised, data-driven, and demand-responsive energy architecture.
Operationally, flexibility refers to the ability to dynamically adjust generation, consumption, and storage in real time based on system needs. In a power system increasingly shaped by non-dispatchable renewable generation, electrification of end uses, and distributed energy flows, this capability becomes essential. The ability to anticipate, detect, and respond to local constraints is no longer optional — it is foundational.
HEDGE-IoT, a project funded by Horizon Europe, addresses this challenge by embedding decentralised intelligence into the grid. It leverages:
- Edge computing for near real-time, localised decision-making;
- Advanced IoT systems to capture and process high-resolution field data;
- Machine learning algorithms to forecast and optimise grid behaviour dynamically;
- Orchestration frameworks to coordinate distributed resources into cohesive action.
This integrated approach enables energy systems that are not only automated, but also context-aware and capable of making autonomous decisions to support system balance, improve efficiency, and unlock new market value.
A shift in market logic: from capacity to responsiveness
Flexibility is rapidly becoming the defining metric of value in the energy market. Traditional volume-based remuneration models are giving way to performance-based mechanisms that reward actors capable of delivering timely, accurate, and location-specific services.
This transition is reshaping roles and business models:
- Utilities dependent on volumetric sales will face diminishing returns;
- Balance Service Providers (BSPs) using static forecasting models will encounter growing inaccuracy and inefficiency;
- Distribution System Operators (DSOs) relying on centralised control will struggle to prevent local congestions and grid stress.
In contrast, those equipped with flexible assets, digital infrastructure, and the ability to operate in real time will be well-positioned to capitalise on emerging flexibility markets—both at the local and national level.
Regulatory bodies across Europe are already piloting decentralised flexibility procurement schemes, built on transparent procurement, activation, and settlement processes. Investors are increasingly prioritising grid operators and energy players with digital readiness. Policymakers are updating grid codes to reflect the growing role of distributed energy resources and active system participation.
Flexibility as a systemic capability — not just a technical feature
The evolution towards a flexibility-centric energy system goes beyond technology. It calls for a fundamental transformation in how energy is governed and delivered. To succeed, organisations must develop new competencies across several key dimensions:
- Operational agility: Systems must process data and respond in real time—manual or centralised control is no longer adequate.
- Data governance: Actionable insights from granular grid data must become a strategic asset.
- Distributed intelligence: Control must shift from central dispatch to edge-level nodes.
- Collaborative coordination: As grid complexity increases, orchestration replaces command-and-control.
To meet these requirements, flexibility must be intentionally designed into grid infrastructure and market operations. HEDGE-IoT supports this vision by implementing:
- Local intelligence layers, enabling edge responsiveness;
- Interoperability standards, ensuring integration across heterogeneous systems and devices;
- Resilience-by-design, built on predictive modelling and digital twin simulations;
- Collaborative control mechanisms, empowering energy communities and prosumers to contribute to grid stability.
In this light, flexibility becomes more than an operational option. It is a prerequisite for participation in the energy markets of tomorrow.
As the transition accelerates, those who can deliver scalable, reliable, and intelligent flexibility services will shape the future energy landscape.
Those who cannot—regardless of size or legacy—risk being sidelined.
Flexibility provides a structural blueprint for enabling decentralised, resilient, and efficient grid architectures.
It empowers stakeholders across the energy value chain to move beyond adaptation—and towards meaningful participation.
Because in the next-generation energy system, success is not about reacting quickly. It’s about being ready before the system even asks you to act.
