Flexibility is not a single technology or asset class. It is a portfolio of capabilities that operate across timescales, fuels, and infrastructures. Batteries, hydro reservoirs, gas storage, linepack, demand response, and even industrial load adjustments each provide a different form of temporal and operational elasticity. Understanding how these forms of flexibility interact is essential for managing an integrated energy system.
Batteries represent the most visible symbol of the new flexibility paradigm. They respond within seconds, smoothing short-term fluctuations in electricity supply and demand. Their strength lies in speed and precision, making them ideal for frequency control, intraday balancing, and managing renewable variability over hours rather than days. However, batteries are energy-limited. They cannot sustain output over extended periods, nor can they address seasonal imbalances.
Gas storage occupies the opposite end of the flexibility spectrum. It operates on longer timescales, absorbing seasonal demand swings and providing security during prolonged stress. Storage facilities allow gas markets to buffer shocks from weather, supply disruptions, or LNG diversion. Through gas-fired generation, this flexibility is translated into electricity market stability. When gas storage is ample and accessible, power markets can absorb renewable variability and demand spikes more smoothly.
Between these extremes lie a range of intermediate solutions. Pumped hydro offers multi-hour to multi-day balancing, but its availability is geographically constrained. Linepack provides short-term gas flexibility, allowing pipelines themselves to act as storage, but its capacity is limited and sensitive to pressure management. Demand response enables consumption to adjust to system conditions, but requires regulatory frameworks and consumer participation that are still developing.
South-East Europe’s flexibility portfolio is uneven. The region benefits from significant hydro capacity in certain areas, providing valuable medium-term balancing. However, battery deployment remains limited, and gas storage capacity is concentrated in a few locations. Demand response is underutilised, and market incentives for flexibility are often weak or inconsistent. This imbalance increases reliance on a narrow set of tools, particularly gas-fired generation, heightening exposure to gas-market volatility.
Interactions between flexibility types can either stabilise or destabilise the system. Effective coordination allows short-term tools, such as batteries, to manage immediate fluctuations, while longer-term resources, such as gas storage, address sustained imbalances. When coordination is lacking, assets may work at cross purposes. For example, aggressive battery discharge during peak prices can reduce incentives for longer-term storage investment, undermining seasonal resilience.
Financial and regulatory frameworks play a critical role in shaping these interactions. Markets that reward speed but not endurance may encourage overinvestment in short-term solutions at the expense of long-term security. Conversely, mechanisms focused solely on capacity may undervalue fast response, increasing short-term volatility. Achieving balance requires recognising that flexibility has multiple dimensions, each with distinct economic value.
In South-East Europe, aligning these incentives is particularly challenging due to cross-border dependencies. Flexibility assets in one country often serve neighbouring markets, but investment signals remain national. This misalignment can lead to underprovision of regional public goods, such as storage or interconnection capacity, exacerbating volatility during stress events.
The evolution of flexibility portfolios will shape the region’s energy trajectory. As renewable penetration increases, the relative value of different flexibility forms will shift. Batteries may become more prominent for intraday balancing, while gas storage remains critical for seasonal security. Demand response could play a larger role if regulatory barriers are addressed.
Elevated by clarion.energy
