As the global solar market is on track to exceed 500 GW of new installed capacity in 2024 and is projected to cross the TW level before 2030, the effects of this strong acceleration are also visible in the European Union. Having reached an operating solar fleet of 269 GW in 2023, the EU is projected to control nearly 900 GW of solar capacity by the end of the decade, outpacing national and EU solar targets.

Meanwhile, current trends in the EU power system, coupled with climate and energy policy targets towards 2030 and 2040, indicate that variable renewable energy sources like solar PV and wind will provide the largest bulk of EU electricity supply in the coming decades. The REPowerEU plan, and more recently the EU Commission 2040 impact assessment scenario, outline pathways and targets for a large increase in variable renewable energy generation.

However, a deep integration of variable renewables, in particular solar energy, into the power system does not come without challenges. Already today, some Member States with comparatively high levels of solar PV penetration are starting to face issues related to the smooth integration of variable renewable generation in their power mixes. These issues include both challenges of technical nature (integration of solar projects into the grid, increasing level of curtailment) and financial nature (market structure, investment attractiveness and remuneration of renewable producers).

This study explores the interplay between the rollout of PV capacity, and the deployment and operation of flexibility solutions in the EU power system, looking at the 2030 and 2040 time horizons. Modelling simulations of investment and hourly EU power system operations over a full year, it analyses three scenarios with increasing levels of solar PV and flexibility solutions, namely flexible capacities and flexible demand from electrification.

The study results highlight the fundamental role of flexibility solutions in a power system characterised by a strong penetration of variable renewable generation. Tapping flexibility potential not only enables the deployment of more solar as the key to meet climate targets and security – it also allows to make better use of abundant, clean and cheap electricity.

The analysis shows that:

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