Energy & Climate: Letter to Executive VP Frans Timmermans and Energy Commissioner Kadri Simson regarding Increasing System Efficiency in the ‘Fit for 55’ Package through the active participation of end-users

Orgalim has come together with other stakeholders supporting the cost-effective decarbonisation of Europe’s energy system to encourage the European Commission to put forward an ambitious ‘Fit for 55’ Package that fosters system efficiency through the empowerment and active participation of all European energy end-users, to unleash their demand-side flexibility from demand response, distributed energy storage, renewable and efficient generation.

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. Demand-side flexibility from all end-use sectors is a reliable, accessible and competitive resource to meet the new requirements of the decarbonisation challenge. Making these benefits a reality requires the activation of all end-use sectors through the development of an economically attractive business model.

Priority should be given to the implementation of the Electricity Market Design to set national regulatory frameworks enabling the activation of demand-side flexibility. This should be complemented by a dedicated network code, to be drafted in close cooperation with stakeholders, to fill the gaps of existing EU rules.

Additional EU policy measures are also needed to ramp up the activation and integration of distributed flexibility into the power system.

We believe that the ‘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 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, acknowledging 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 the upcoming legislative proposals for 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. 

To read our recommendations in full, please download the document above.