Scope

The evolving landscape of Europe’s electricity system is increasingly shaped by two interacting phenomena: grid congestion and the rising need for flexibility. On the one hand, grid congestion arises as more renewables, storage and electrified loads are connected—placing pressure on network capacity, especially in distribution and medium‐voltage systems. On the other hand, flexibility—both on the demand side (e.g., adjustable consumption) and supply side (e.g., storage, variable generation)—offers a key tool to address congestion, enabling more efficient use of existing assets.

Against this backdrop, the new Electricity Market Design 5 (EMD5) directive introduces regulatory provisions that explicitly integrate flexible connection agreements and non-firm access arrangements for areas with limited network capacity. By allowing network users to accept temporary curtailment or modulated capacity in exchange for connection ahead of full reinforcement, EMD5 transforms the role of flexibility from mere balancing service to a structural instrument for congestion mitigation. Thus, congestion and flexibility are no longer separate disciplines, but intertwined components of a modern market design: flexibility mitigates congestion, and the regulatory framework of EMD5 enables and rewards that mitigation.

In practice, this means that system operators must shift from purely reinforcing networks to procuring or contracting flexibility, while network users gain new choices—flexible connections, modulated usage, and participation in local flexibility markets. The directive thereby realigns incentives and aligns technical and market measures: congestion zones become arenas for flexibility contracts, and flexibility becomes a recognized asset to unlock grid access. Taken together, the meeting point of congestion and flexibility under EMD5 represents a fundamental paradigm shift in grid planning, market participation and regulation—one that promises to accelerate the energy transition while preserving system reliability and efficiency.