Is succeeding in today’s energy market starting to look like an Olympic competition to you? We can see why. Finding the perfect energy market for your VPP is about strength, agility, and knowing when to make your move. Qualities a top athlete must have. After all, the gold medal isn’t given to those who stick to one routine. The top spot goes to the one who adapts fastest to changing conditions, switches lanes when opportunity arises, and optimizes every watt of flexibility.
Throughout our VPP Agility series, we’ve explored how VPP operators can stay ahead in this rapidly changing arena. We started with multi-market strategies to maximize revenues, introduced a modular approach to optimization, looked at how evolving grid rules impact operations, and recently turned our focus to the software behind it all.
Now, in this fifth installment, we’re exploring the important question of where your VPP should compete. The field of play is constantly being redrawn, so the strategy that earned you the gold last year might not even qualify today. That’s why we won’t just hand you a list of “winning” markets. Instead, we’ll show you how to spot the most promising opportunities. That way, your VPP can stay in the lead, no matter how the rules shift.
Not all markets are created equal
An agile VPP can only thrive in the right environment. Even the most flexible VPP will hit a wall if the market conditions are hostile, whether due to rigid regulations, entrenched incumbents, or slow-moving grid operators. However, some regions are opening up fast, which will reward early movers who can read the signs.
So what kind of market would be fertile ground for a VPP? Below we’ve broken down the main signs to help you see where to scale next:
What to look for
Emerging flexibility markets
An important question to ask yourself first is, is this market actively creating new opportunities for flexibility? The most promising ones don’t just rely on existing markets. They're launching new products and local mechanisms to tap into distributed assets. Whether it’s congestion platforms like GOPACS in the Netherlands or updated ancillary services designed for smaller, agile participants, these emerging flexibility markets are built to attract VPPs. They signal that flexibility isn’t just accepted but is becoming essential.
Accessible market design
No matter how much a market values flexibility, your VPP can only succeed if it’s allowed to participate. That’s why you must look for markets where distributed assets like EVs, home batteries, and rooftop solar can be aggregated and bid into balancing, day-ahead, or intraday markets, without excessive licensing or technical barriers. In many EU countries, a lack of clear VPP definition or fragmented rules still limits access. But more open markets actively encourage small-scale flexibility, creating better conditions for agile VPPs to scale.
Intraday volatility from renewables
As more solar and wind energy comes online, electricity prices fluctuate and when there’s too much supply, the prices will even go negative. This is a perfect opportunity for VPPs to earn revenue by reacting quickly: charging storage or running flexible loads when prices are low and discharging storage or reducing loads when prices spike. This kind of flexibility is becoming more and more critical. The European Environment Agency has stated that flexibility must almost double by 2030 to keep pace with variable renewables. And, according to the European Market Monitor on Energy Storage (EMMES 9.0) from EASE - The European Association for Storage of Energy, by the end of 2024, Europe had 89 GW of energy storage, including 53 GW pumped hydro and 35 GW electrochemical storage. This highlights just how critical storage is for managing the volatility caused by renewables. Still, other technologies matter too. Pumped hydro can dampen swings but is season- and water-dependent, while run-of-river hydro is sensitive to snowmelt and rainfall. Nuclear provides stable output, but droughts can force reactors to scale back due to cooling limits. The bottom line is: if the market allows for real-time participation, then volatility will create opportunity for VPPs, but understanding the local energy mix is essential to spotting it.
Fragmented market
You don’t want to end up in a crowded market, whether it’s Camden Market in London, Naschmarkt in Vienna or the energy market in a country that is already full of well-established players. But here’s the paradox according to the 2025 Monitoring Report on unlocking flexibility from the EU Agency for the Cooperation of Energy Regulators (ACER): while less VPP competition can mean better margins and easier grid access, highly concentrated markets dominated by a few large incumbents are often hard for any newcomer to break into, whether you're a VPP, generator, or retailer. The sweet spot? A fragmented market that’s open to new entrants but not yet saturated with agile flexibility providers.
Geopolitical motivation for energy Independence
Countries that are facing energy insecurity, due to factors like dependency on imported gas or other energy resources from neighbors perceived as hostile, are pushing harder and faster toward renewables and flexible energy solutions. These countries are more likely to invest in supporting technologies like VPPs that make renewables more reliable. This creates strong political and economic support for agile, decentralized solutions.
What to be wary of
Now you know what to keep an eye out for when entering your VPP in a new market. But some factors should sound the alarm bells for you. So to help you steer clear of costly missteps, read through our list of market entry risks that you should undoubtedly be aware of:
Excessive regulatory barriers
The ACER-CEER 2024 Market Monitoring Report emphasizes that the clean energy transition requires the active participation of energy consumers and the removal of regulatory barriers that hinder demand response and distributed energy resources. Unfortunately, not all countries have caught up with the idea of VPPs. In many countries, the rules are still written for old-school centralized power plants, not for flexible networks. If there is no legal framework for VPPs to participate in energy or grid services markets, then it won’t matter how agile your VPP is, it simply won’t make it.
Hesitant investors
When looking at emerging or expanding markets, investors may be hesitant to fund a VPP because they can’t predict regulatory changes, market prices or ROI. With little price history and unclear regulations, it’s hard to prove the bankability of the asset. Even a bankability feasibility study from a high-cost consultancy is often little more than a guess - and so securing financing becomes a challenge. That makes building a solid business case for yourself much harder and could be a sign for you to reconsider entering the market. What is needed is stable rules, long-term contracts, or capacity payments to reduce the risk for investors. Clear de-risking mechanisms like these are essential to ensure the timely development of flexibility. On the other hand, a risk-tolerant investor, or one with local ties, may well grasp the potential for high rewards that accompany the higher risk of an untested market.
Grid connection issues
You can’t get your VPP online if the grid isn’t ready. In some countries, even when projects are approved, connecting to the grid is often delayed. And every delay costs time and money, shrinking your opportunity in volatile markets. So what causes these delays? Watch out for grid congestion, slow permitting processes, or a lack of clarity from TSOs. No grid access often means no business, but it might still be worth it if it’s just a matter of cost or time. That is, if you factor it in from the start.
A crowded market
Even in markets that seem favorable on paper, high saturation can quickly erode your chances of success, especially in regions where large utilities already dominate. These players often have more resources, political presence, and existing infrastructure, making it hard for your VPP to compete. That doesn’t mean you shouldn’t enter, but it does mean you’ll need a smart strategy, including multiple revenue streams, to stay resilient when it gets crowded.
VPP markets to watch
Europe is moving full speed ahead with renewables, but some countries are more promising for VPPs than others. These regions have supportive rules, less crowded markets, and real flexibility needs to combine to create big opportunities for you.
So what countries do we think are the next VPP hotspots? Keep on reading to find out.
The Baltics: Ready for energy independence
The Baltic states (Estonia, Latvia and Lithuania) may be small but they are hungry for solutions. After relying on Russia for decades, they are serious about becoming energy independent. After disconnecting from BRELL earlier this year, they're investing fast in renewables and building smarter, more flexible systems. Yet there are still some hiccups: at the 2025 Energy Forum, Litgrid’s CEO, Rokas Masiulis, noted that while Lithuania offers subsidies covering up to 30% of BESS costs, complex paperwork is holding projects back. Offshore wind is also on the horizon, with tenders underway and the first farms expected by 2030. The European Parliament's study on increasing flexibility in the EU Energy system underscores the Baltic states' commitment to energy independence through investments in renewables and grid flexibility. What does this mean for VPPs?
New rules are opening the market to distributed energy (like rooftop solar and batteries).
High shares of renewables are causing price swings, which is where VPPs shine. They can shift loads, absorb excess energy, or sell power when prices spike.
EU agencies say flexibility needs to double, and the Baltics are trying to lead that charge.
Hungary: Moving on up
The market in Hungary is gaining traction, and we’re not just saying that because we’re located in Budapest, the loveliest city in Central Europe. The country is upgrading its infrastructure and moving toward more open energy markets. The 2024 Market Monitor for Demand Side Flexibility from smartEn and LCP Delta notes that Hungary is progressing in integrating demand-side flexibility, with ongoing grid modernization efforts enhancing the potential for VPP integration. So, while Hungary is not wide open yet, this could be a place for early movers to check out. Here’s what to consider for your VPP:
New entrants like VPPs are starting to get access, though some regulatory hurdles remain.
The grid is getting smarter, meaning less downtime and better signals for flexible power use.
Hungary will need ways to balance those ups and downs as solar and wind grow.
Romania, Croatia, and Slovenia: The quiet opportunity?
Romania, Croatia, and Slovenia are catching up with the EU’s energy rules, creating space for innovation! These Southeastern European countries are still under the radar, but with the right timing, your VPP could gain a strong foothold. With national policies being updated to fit EU standards and rising renewable targets, your next stop may have to be further south than expected. Why could your VPP fit here?
Not many VPPs are active here, so there’s little competition.
Governments are starting to welcome distributed energy solutions like batteries, EVs, and flexible demand.
However, the grid infrastructure may lag behind, so timelines could be slower.
The twist: It might already be completely different
Unfortunately, we can only tell you as much as we know at the very moment this article is being typed. It’s easy for us to point to which markets look promising right now. But in this space, things change fast. Sometimes faster than your business case can adapt. A market that is wide open today might be saturated within a year.
Regulations evolve.
Infrastructure catches up or lags behind.
Competitors flood in.
That’s why you can’t really rely on just one static business model. You (and your VPP) must stay agile, otherwise what looks like a solid opportunity can dissolve quickly. In the energy sector there are no medals awarded, and you may even struggle to find a market that is perfect for your VPP, but we hope you can take this statement to heart from our Business Development Manager Christoph Malzer:
“Agility is the real edge. It’s not about predicting the perfect market. It’s about being ready to move when the ground shifts.”