In the rapidly evolving energy landscape, flexibility in energy—defined as any mechanism helping balance supply and demand—is no longer optional: It is a strategic lever that needs to be prioritized as more renewables come online. As McKinsey’s B2B energy research highlights, energy is no longer treated as a back-office commodity but as a core lever for resilience, cost control, and decarbonization.1
Commercial and industrial (C&I) companies are starting to view energy as a strategic priority. They are increasingly acting as “prosumers,” investing in on-site energy assets and flexibility solutions to manage volatility and accelerate sustainability goals. Flexibility, particularly on the demand side, is now regarded as more than just an energy management tool—C&I companies recognize its potential as a pathway to resilience, competitiveness, and direct value creation.
Our analysis suggests that C&I energy consumers could capture up to €8 billion of the emerging flexibility value pool in Europe by 2030—if they act decisively.
Flexibility matters—and is becoming urgent
Europe’s energy system is undergoing a fundamental transformation. To meet decarbonization goals, countries are rapidly integrating renewable energy sources, such as wind and solar photovoltaic (PV), into their energy supplies.2 While this shift is essential, it introduces greater volatility into the system as wind and solar energy are inherently nondispatchable—their output depends on weather and cannot be ramped up or down on demand.
At the same time, electrification is accelerating across industries and the transport and building sectors, driving a sharp increase in electricity demand.3 This growth could create a potential mismatch between supply and demand at any given time, threatening both grid stability and energy affordability.
To close this gap and keep the system balanced, Europe may need 75 percent more flexibility by 2030 than it has today (Exhibit 1), opening up significant opportunities in this region. And not only in Europe—companies can consider emerging markets, too (see sidebar “Flexibility in emerging markets”).
Flexibility comes from three main sources—flexible generation, storage, and demand-side response (DSR). However, not all are equally cost-effective, scalable, or aligned with decarbonization targets (see sidebar “Three fundamental sources of flexibility can address energy fluctuations”).
Why demand-side response separates itself from the rest
DSR, specifically, stands out as an excellent option for flexibility (see sidebar “Six macrotrends reshaping the role of DSR”). It is an affordable and reliable approach that can be embedded directly into production and consumption decisions. It is one of the only CO2-neutral sources of flexibility, enabling greater use of renewable energy and accelerating C&I decarbonization, without compromising operations.
DSR also shields against price volatility by reducing exposure to energy price spikes and supply shocks—a growing concern, given Europe’s evolving geopolitical and energy landscape.4 By reducing reliance on imported fuels, it supports local energy balancing and contributes to the broader goals of European energy independence.5 DSR also has the unique ability to scale quickly with minimal disruption to existing operations and does not need capital-intensive infrastructure, unlike storage and flexible generation.
Today, DSR accounts for around 10 percent of advanced economies’ flexibility supply.6 That share is expected to double by 2030, highlighting DSR’s growing role in balancing a decarbonizing grid (Exhibit 2).
However, after 2030, the value of the overall flexibility market may decline as the market could become oversupplied, driven in part by the significant investment currently being made in battery storage.7 This potential oversupply could favor DSR over more capital-intensive sources of flexibility, such as batteries, due to DSR’s low up-front costs and operational scalability.
C&I companies can capture significant value by 2030
Mature energy markets already offer several mechanisms to turn flexible capacity into financial returns.
Unlocking value: Two main routes to monetizing flexibility
Industrials can tap into two primary channels: grid services and wholesale market arbitrages.
Grid services
As power generation grows more volatile, grid operators are trying to keep supply stable and are increasingly relying on flexible demand to balance nondispatchable renewable energy. To achieve this, they can use ancillary services or capacity remuneration mechanisms.
Ancillary services are programs that companies are incentivized to join to keep frequency and voltage stable, enabling near-real-time balancing of the grid. Businesses with flexible operations or behind-the-meter assets can join these programs. In return, they receive two forms of compensation from grid operators: one for reserving capacity (measured in megawatts [MW]) and the second for energy they deliver or curtail when needed (measured in megawatt-hours [MWh]). Companies need to be able to respond quickly, sometimes within seconds or minutes, depending on the market product. By joining programs, companies, including C&I players, can not only gain an additional revenue stream but also improve their return on capital invested in energy infrastructure.
Capital remuneration mechanisms are structured tools available in some European counties which incentivize companies to reduce or shift their electricity use during periods of system stress. C&I energy consumers are incentivized to reduce or shift demand during these critical periods, often committing to this through annual or multiyear auctions.
Wholesale market arbitrages
Flexibility allows players to capitalize on shifts in electricity prices throughout the day or week. C&I companies can shift their demand to off-peak hours when renewables are abundant and prices drop and then sell back unused or locally generated power during peak demand, when fossil-based production pushes prices up. They can also participate in intraday and real-time markets, where volatility often creates opportunities to buy low and sell high.
While the concept of “buy low, sell high” applies, the reality of executing this strategy requires C&I companies to navigate wholesale markets through real-time data, price signal responsiveness, and operational agility.
The value at stake: An €8 billion opportunity for C&I players in Europe
The European demand-side flexibility gross value pool could triple from €4 billion in 2024 to €12 billion by 2030 (Exhibit 3). McKinsey analysis shows that this growth is expected to be driven by an increase in overall flexibility demand of approximately 10 percent per year as variable renewables scale and the mix of flexibility sources shift as DSR roughly doubles its share from 10 percent today to 21 percent by 2030.8
This value pool includes both grid services and wholesale market arbitrages, where demand-side actors can participate through more flexible operations and the integration of behind-the-meter assets such as batteries.
Of the €12 billion, a gross opportunity of €8 billion is accessible to C&I players (Exhibit 4). The remaining €4 billion corresponds to the residential segment and service fees from specialized aggregators.9
Yet only a small share of this potential value is currently captured by C&I companies. This is because of limited flexibility penetration and operational maturity across C&I sites—there is significant room for improvement. C&I companies can capture additional value by adjusting their industrial processes within a day or a week (or both), combined with energy or thermal buffers (for example, heat management or on-site batteries) to minimize operational disruption.
Not all industries are equally positioned to capture this opportunity, however. Heavy industries, such as cement, equipment, metals, and paper, tend to exhibit higher inherent flexibility, given the scale of their energy consumption and the nature of their processes. Sectors such as chemicals or automotive often face tighter process constraints and more complex production flows, making it harder to unlock flexibility without significant operational adjustments. It is essential for a company to tailor its approach to its own sector’s characteristics.
Flexibility must be integrated into daily decision-making and system control. This demands digital readiness, automation, and a mindset shift: from energy as a mere cost center to energy as a profit lever.
How industrials can capture the value at stake
Translating flexibility into bottom-line impact requires more than technical upgrades. It calls for a coordinated, cross-functional transformation spanning long-term capital planning, midterm operational strategy, and day-to-day execution. Companies that take a holistic, phased approach to this are best positioned to capture the underlying value of flexibility (see sidebar “Flexibility in action: Real-world C&I use cases across Europe”).
Building flexibility into capital and electrification decisions
Decisions made today about electrification, asset configuration, and energy infrastructure will define a site’s ability to participate in future flexibility markets and how much value it can unlock. Embedding flexibility into capital planning is no longer a niche consideration; it is becoming a baseline expectation in energy- and asset-intensive sectors.
To align demand with the evolving grid dynamics, C&I companies can consider how to electrify their core processes so that they are able to participate in flexibility mechanisms, by leveraging flex potential to reduce costs associated with energy or generate more revenue streams (or both).
They can invest in flexible, modular production lines that ramp up or down in response to price signals without compromising output quality or stability. To ensure they are not solely reliant on an unstable energy system, companies can evaluate their own on-site energy storage options, such as batteries or thermal buffers, which would guarantee access to backup power and allow them to participate in ancillary services and wholesale markets, such as supplying power back to the grid.
Adapting sales and operations planning cycles
C&I companies can begin managing production not just for throughput and cost, but also for energy responsiveness, on a yearly to monthly basis. This involves integrating flexibility considerations directly into sales and operations planning (S&OP) and bringing together commercial, operational, and procurement functions around a shared view of energy opportunity.
To do this, companies can align production schedules with projected market dynamics, such as renewable energy availability, grid congestion, or peak pricing periods. They can also embed load-shifting potential into planning systems, allowing them to postpone or advance certain energy-intensive operations based on market signals. In addition, they can coordinate closely with procurement and logistics functions to ensure that flexibility does not cause constraints in the value chain.
Adopting these actions can create “interruptibility”: the ability to shift operations deliberately by increasing or decreasing load, with minimal commercial or technical disruption.
Responding to price signals and grid needs in real time
To consistently and effectively enable value capture, flexibility must be integrated into daily decision-making and system control. This demands digital readiness, automation, and a mindset shift from viewing energy as a mere cost center to energy as a profit lever.
Organizations could automate their shared interfaces with grid operators and aggregators, allowing for seamless participation in frequency regulation, reserve markets, and other grid services. Monitoring and forecasting price signals in real time with AI can also help them to anticipate grid needs and optimize bidding strategies.
To identify optimization opportunities in real time, plant managers and control room operators can be equipped with AI-driven decision support tools and the authority to flex operations based on market conditions.
Flexibility is quickly becoming a priority for C&I companies in Europe. It offers a rare alignment of strategic value, operational resilience, and environmental impact. Companies that build these capabilities can move from theoretical flexibility to a reliable, monetizable asset, one that contributes not just to sustainability goals, but to earnings too.
