System efficiency in “Fit for 55” package

Together with 16 European business organisations, we call on Frans Timmermans and Kadri Simson to increase system efficiency through the activation of the demand-side flexibility of end-users in the “Fit for 55” package. Indeed it is a must for cost-effective decarbonisation.

Demand-side flexibility is the bridging solution supporting greater electrification and smart sector integration. It helps stabilise an increasingly variable power system and contributes to reaching climate neutrality cost-effectively. Furthermore when implemented in all end-use sectors is a reliable, accessible and competitive resource. Making these benefits a reality requires the activation of all end-use sectors. Policymakers can do this through the development of an economically attractive business model. We believe that ‘Fit for 55’ package should provide incentives to realise the value of demand-side flexibility by:

• supporting prosumer business models, energy sharing and other cooperative models evolving,
• incentivising market participants to provide flexibility services and contribute to the security of supply,
• ensuring prosumers are rewarded for their voluntary contribution to the system.

The Commission’s Energy System Integration Strategy set the correct way forward to increase the EU’s 2030 climate target. It acknowledged the role of distributed flexibility sources to support a more efficient energy system and the cost-effective integration of renewable energy in all end-use sectors. We urge the Commission to ensure consistency with this Strategy. In particular through the revisions of the Renewable Energy, Energy Efficiency, Alternative Fuels Infrastructure and Energy Performance of Buildings Directives, as well as the upcoming Gas Markets Decarbonisation package.