Our offices felt pretty light last week as we executed a split operation across Europe and 2600km apart: one team travelled south to Bilbao to man our booth for the global reach of Enlit Europe, while the other was up north in Tallinn for the vital regional conference at the Baltic Nordic Energy Summit (BNES), put on by EEL Events. This dual presence gave us a unique, panoramic view of the energy transition.
The message we picked up from both events was unanimous: There is no more waiting on integrating flexibility.
This is a fact and it is rooted in the sheer numbers of growth: In 2024, Europe's total renewable capacity reached over 848 GW, with clean power surging to a historic 72% of the EU's mix. This rapid expansion - including the 66 GW of solar installed in 2024 alone - is relentlessly pushing the grid to its limits.
However, the reasons driving this flexibility mandate - and the corresponding investment strategies - could not have been more distinct.
Many Markets, One Mandate
The discussions showed that European flexibility is now being pushed by two contrasting forces:
🇪🇸 Bilbao: Resilience
Europe races toward net-zero, and the grid often seems to be out of breath, trying to catch up. This became painfully clear at Enlit Europe, as the Iberian blackout earlier this year left most of the peninsula in the dark for hours.
At the smartEn quiz show, our own Christoph Malzer was asked the question: “Won’t all flexibility be provided by batteries?” His response was a resounding No. Flexibility isn’t only about batteries, it’s about which assets can ramp up or down for the lowest price. If marginal costs are close to zero, it all boils down to connection costs. Demand side flexibility is another big potential source; if you can ramp up or down your C&I asset, your solar or wind park, that might be cheaper.
Our core lesson in Bilbao could be boiled down to one sentence: Every GWh of new renewable energy requires equal resilience. Our focus was on smart risk management and how to prevent the next grid failure, addressing the volatility that leads to prices turning negative or the risk of price spikes during scarcity.
Participants agreed that the massive influx of renewables - such as the projected 20% year-on-year increase in solar power generation in 2025 - highlights the weaknesses of our current system. The collective focus was on accelerating the use of smart technology to safeguard the grid.
This is what we also wanted to convey with our stand's theme: Smart flex keeps the lights on.
🇪🇪 Tallinn: Investment
Meanwhile, in Estonia, it was hard to stay cool, when talking about the massive commercial opportunity created by a €1.6 billion geopolitical pivot: The Baltic states’ synchronization with CESA in February 2025 created the Baltic Balancing Capacity Market (BBCM) at unheard-of speed. This market has become a "green engine" that has turned grid stability into a massive financial incentive.
The market signal for battery storage is so strong that first-movers are seeing potential 20-30% IRRs. The BBCM is directly supporting the region's green ambitions, acting as a vital mechanism to eliminate the duck curve and boost renewables integration.
While some parts of Europe are struggling to get moving, the Baltic region is "walking the walk," actively building out fleets to meet a regional flexibility target of 1,600 MW by 2030.
Enabling European Flex with VPPs
Despite the contrasting regional drivers - fear of a blackout versus the lure of a gold rush - the technical solution that dominated discussions at both events was the same: Aggregation and smart digitalization via Virtual Power Plants (VPPs).
VPPs have already become a vital technology for integrating renewables and stabilizing the grid. In markets all across Europe, VPPs proved their worth by solving core business problems:
- For Stability: VPPs aggregate generation, storage, and demand-side power into one resilient, stabilizing force, helping to avoid incidents like the Iberian blackout. The EU needs at least 60 GW of BESS by 2030 to reach sufficient storage capacity, and VPPs are key to integrating that scale.
For Investment: In the Baltics, VPPs solve the key funding gap. They bundle smaller projects, overcoming the BBCM's 1 MW minimum bid threshold and presenting a single, bankable entity to nervous lenders.
The Future-Proof Mandate
Hyper-agile, future-proof energy platforms must be set into place to manage these VPPs. For both grid operators and asset owners, it means that their business models must be resilient to market saturation.
They must be able to handle multi-market optimization to shift revenue stacking as one business model (like ancillary services in the BBCM) saturates and another (like energy arbitrage) develops. But they also need to be adaptable to changing regulations, and be able to expand economically, managing scale across new geographic areas.
Whether you are motivated by the need to keep the lights on or by the chance to capture 20-30% IRRs, the path forward is the same: smart digitalization and a robust VPP strategy.
