New review finds Europe’s 2024 electricity market reform opens the door for ordinary consumers, but national differences still block the way
Europe is rewriting the rulebook for its electricity market, and ordinary households are moving to the centre of it. A regulatory review carried out within REEFLEX, an EU-funded research and innovation project, concludes that recent EU laws create real opportunities for families, small businesses and local energy communities to earn money by using electricity more flexibly. It also warns that uneven national rules, missing technical standards and outdated grid fees still stand in the way.
What is “flexibility”, and why should anyone care?
As more of Europe’s electricity comes from the wind and the sun, supply rises and falls with the weather. In the past, large power plants were turned up or down to keep the grid in balance. Today there is a cleaner option: changing when we use electricity. A heat pump that pauses for twenty minutes, an electric car that charges at two in the morning instead of six in the evening, or a home battery that releases stored solar power during the evening peak can all help keep the system stable. Added up across thousands of homes, these small adjustments, known as demand-side flexibility, can do the job of a power plant and reduce the need for expensive new power lines.
REEFLEX, funded under the EU’s Horizon Europe programme, is building the digital tools to make this work in practice. At its heart is an open platform that connects household appliances, electric vehicles, batteries and buildings to energy markets, with software that forecasts how much flexibility each device can offer and bundles many small contributions for sale. The project is testing its solutions at demonstration sites in several European countries, including Spain, Greece, Bulgaria and Switzerland, with further replication planned in Turkey and Denmark.
A strong fit with Europe’s new market rules
To check whether these tools can be used legally and profitably after the project ends, the team examined the main EU laws governing the electricity market, including the 2024 Electricity Market Design reform (Regulation (EU) 2024/1747 and Directive (EU) 2024/1711), the revised Renewable Energy Directive (RED III), the EU balancing and cross-border trading guidelines, the revised rules against market manipulation (REMIT II), and the EU Network Code on Demand Response proposed by the EU energy regulators’ agency ACER in March 2025.
The headline finding is positive. For the first time, EU law gives “flexibility” a legal definition and places demand response and energy storage at the core of the electricity system. Every Member State must now assess how much flexibility its grid needs and set a national target for clean flexibility.
Several of the new rules match REEFLEX’s approach almost exactly. Electricity markets must now accept offers as small as 100 kilowatts, including offers made up of many small devices pooled together. This is precisely what the project’s aggregation tools do. Households, small companies and public bodies also gain a new legal right to share renewable electricity, for example when solar power from one roof is used by the neighbours in the same apartment block. REEFLEX’s peer-to-peer trading tools are built for exactly this kind of local energy community.
The reform also helps buildings without modern smart meters. Where no smart meter is installed, grid operators must accept readings from dedicated measuring devices, such as a meter built into an electric-car charger, as long as the customer agrees. Finally, since the start of 2026, cross-border intraday electricity trading must close no more than 30 minutes before the power is delivered, which rewards fast, automated responses of the kind REEFLEX’s algorithms provide.
Where the rules still pinch
The review is equally clear about the obstacles. The biggest is fragmentation. EU law sets the direction, but many practical details are left to each country: the minimum size of a bid, how a company must qualify to sell flexibility, how network fees are charged and how shared energy is counted. An arrangement that is fully legal in Spain may fail in countries where electricity markets have opened up more slowly. Some grid operators still apply entry requirements, such as one-megawatt minimum bids, designed for large gas-fired plants rather than thousands of homes.
A second challenge is proving that flexibility was actually delivered. To be paid, a household or its service provider must show that it used less electricity than it otherwise would have. This requires an agreed “baseline”, a reference point for normal consumption. There is still no single EU method for calculating it. If national regulators choose simple statistical formulas, the advanced artificial intelligence and appliance-recognition techniques that REEFLEX uses may not be accepted for payment. The review therefore recommends that the project develop a dedicated method for measuring and verifying the flexibility it delivers.
Other hurdles are more specific. The new “peak-shaving” product, which pays consumers for cutting demand at the busiest times, may only be used during officially declared price crises, so it cannot yet provide a steady income. In several countries, stored electricity can still be charged grid fees twice, going into a battery and coming out, and power moved between neighbouring buildings can be billed at full grid rates. Electric cars that feed power back into the grid face further barriers, as carmakers often restrict access to live battery data despite EU law now requiring it.
Automation also brings new duties. Under REMIT II, companies using algorithms to trade electricity must notify regulators and test their systems, whose logic must be open to inspection rather than a “black box”. Local peer-to-peer marketplaces must also be designed so that they do not duplicate products traded on official power exchanges. Finally, locations in Switzerland and Turkey are outside the EU’s legal framework, so solutions tested there need adapting.
Funded by the European Union. Views and opinions expressed are those of the author(s) only and do not necessarily reflect those of the European Union or the granting authority. Neither the European Union nor the granting authority can be held responsible for them.
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