The question in European energy policy has shifted. It is no longer whether to transition, but how to design a system that can deliver reliability, affordability and decarbonisation at the same time. What we see across power markets today, rising curtailment, negative prices, and growing system stress, is not a failure of ambition. It is a system being asked to do more, faster, without being redesigned for the new reality.
Recent events, including the Iberian blackout last year, have brought these challenges into sharper focus. But these are not isolated incidents. They are signals - clear indications that the power system, as it is currently configured, is struggling to balance reliability, affordability, and decarbonisation at the same time.
The question Europe now faces is not whether to accelerate the transition, but how to do so without undermining system stability or driving costs beyond what consumers and industry can bear.
Beyond the either/or debate
For too long, the energy transition debate has been framed around individual technologies. Solar versus wind. Batteries versus generation. Electrons versus molecules. While these discussions are important, they risk missing the bigger picture.
The transition is not about individual technologies replacing one another. It is about how the entire energy system evolves together.
When decisions are made at a system level, considering how generation, storage, networks, heat and fuels interact, the results change sharply. Modelling consistently shows that system-level optimisation reduces emissions faster, and at materially lower cost, than technology-by-technology approaches.
This shift in perspective is no longer optional. It is essential.
Affordability is not a constraint - it is a requirement
Affordability has become awkward to discuss in the context of the green transition. It shouldn’t be. Affordability is not a distraction from decarbonisation; it is a prerequisite for its success.
The transition requires massive investment, and governments cannot fund everything, everywhere, all at once. There is no single “silver bullet” technology that can deliver a reliable, affordable, and net zero energy system on its own. Ultimately, the energy user - whether households or industry - must be able to afford the transition.
A system‑level approach makes this possible. It allows policymakers and planners to prioritise investments based on where they deliver the greatest overall value. In practical terms, it forces a simple but powerful question: If we can only invest a limited amount, where does that investment strengthen the system the most?
What system‑level thinking really means
System‑level thinking is often discussed in abstract terms, but in reality it comes down to three very concrete principles.
First, location matters. Power systems are not uniform. Different regions face different challenges - grid congestion, renewable mismatches, new demand from electrification and data centres, or limited balancing resources. Treating a country as a single homogeneous system leads to inefficiencies and unnecessary cost.
Second, energy must be co‑optimised. Electricity is only part of the picture. Heat, cooling, and fuels for industrial processes all interact with the power system. Optimising these elements together unlocks far greater flexibility and efficiency than addressing them in isolation.
Third, all system services must be properly valued. When markets and policies fail to recognise the full range of services required to keep the system stable - such as inertia, fast frequency response, and capacity - fragmentation follows. The result is higher costs and lower resilience.
We see the consequences of fragmented thinking today, where system needs are procured through separate mechanisms rather than integrated solutions. A joined‑up, system‑based approach consistently delivers better outcomes - for consumers, for governments, and for the climate.
Storage and flexible generation: different jobs, same system
Battery energy storage will play a critical role in Europe’s future energy system, and Wärtsilä is one of its leading providers. Storage excels at short-duration balancing and fast response within its energy window. Flexible generation does something different: sustained dispatch across multi-day low-renewable periods, black-start capability, and grid-forming services that the system cannot do without.
These are not competing technologies. They arehave different roles in the same system, and a well-designed system uses both. The question is not storage versus generation. It is how to size and operate each so the whole system works.
Flexible power plants carry several roles at once: fast response, grid stability services, and cover for extended periods of low wind or sun. When paired with storage rather than pitted against it, each plays to its strengths and the combined cost to the consumer falls.
The role of policy in enabling system flexibility
One of the biggest barriers to system‑level optimisation today is not technical - it is regulatory.
Flexible generation is still treated with suspicion in parts of Europe, and policy frameworks often fail to reward its long-term role in a decarbonising system. Without sustained flexibility, the system becomes more expensive and more fragile.
Some markets are beginning to recognise this reality. Extending capacity mechanisms and valuing flexibility over longer time horizons provides the stable foundation needed to integrate higher shares of renewables and storage affordably.
International experience reinforces this point. In markets with very short dispatch intervals, flexible assets are required to respond frequently and perform a wide range of services. This is not a sign of system weakness - it is a sign of a system designed to extract maximum value from every asset.
Designing the transition around the system
Europe’s energy transition will succeed or fail based on the decisions made in this decade. The challenge is no longer about setting targets. It is about designing a system that can deliver them reliably, affordably, and at scale.
By shifting the focus from individual technologies to system‑level outcomes, Europe can reduce costs, accelerate decarbonisation, and strengthen energy security at the same time.
The system is already telling us what it needs. The opportunity now is to respond - not with slogans or silos, but with solutions designed for the system as a whole. The next question is how policy catches up with that reality. That is where the real work of this decade lies, and where the next piece in this series will go.
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