Energy Transition Readiness Index
An REA report commissioned by Eaton and Drax
The global climate is changing due to growing emissions of greenhouse gases, largely caused by our demand for energy. Public and political support for action is increasing. Consequently, the global energy sector is undergoing a fundamental transition, driven by decarbonisation, decentralisation and digitisation. The rapid growth of renewable electricity, allied with smart distributed energy technologies and new business models, together with greater political commitment and customer engagement, is driving changes to energy markets to facilitate this transition.
Importantly, the rapid growth in variable renewable electricity generation has meant that power systems and markets must be more flexible to compensate for the greater volatility in this generation and keep the balance with customer demand. The need for this flexibility, especially from distributed energy resources, is essential to facilitate the energy transition. Such flexibility resources are forecast to grow significantly in the future – electricity markets are key to enabling this investment and growth.
The energy transition, enabled by flexibility market reform, is already well underway in many European countries, enabled by public policy, regulation, power markets, and technology, but the pace of progress varies. We have engaged with experts across nine Northern European countries to assess and compare the current status of electricity flexibility markets in each country.
We scored each country’s electricity market in the assessment according to its progress against:
- Open market access for flexibility services
- Socio-political support for the energy transition
- Ability to exploit new technologies and business models