The Iberian blackout: why activating flexibility is now critical infrastructure

On April 28, 2025, the unthinkable happened. In less than a minute, much of Spain and Portugal went dark.

Nearly 55 million people lost power. Flights were grounded, and rail networks stopped mid-journey. For hours (and in some cases, days), energy became visible again – through its absence.

This was Europe’s most significant blackout in decades. And while the immediate crisis has passed, the bigger picture tells a deeper story.

This wasn’t just a failure of infrastructure. It was a signal about the fragility of today’s clean energy systems — and a wake-up call that flexibility is no longer optional. It’s critical infrastructure.

For energy retailers and grid operators, the implications are clear. Keeping the grid balanced in a renewable-first world is no longer a side task — flexibility has become central to ensuring stability, resilience and security of supply.

Why clean grids are fragile without flexibility

The Iberian blackout wasn’t caused by renewables failing.

It happened because the grid couldn’t react fast enough to stay balanced when something went wrong.

Here’s what happened:

Two sudden disconnections at solar generation sites in southwestern Spain triggered a rapid frequency drop. Historically, fossil fuel plants would have provided inertia to dampen the swing and limit disruption. But that day, renewables made up nearly 80% of supply. The energy feeding the grid was clean, but inflexible.

The grid couldn’t absorb the shock. Limited cross-border interconnections between the Iberian grid and the broader European network made matters worse. The frequency drop triggered automated protection systems, which cut demand to stabilize the wider network. The result: widespread, cascading outages.

The lights went out across Spain and Portugal – not because electricity wasn’t being generated, but because flexibility wasn’t available when it was needed most.

This wasn’t about generation capacity. It was about the grid’s ability to react. In a renewable-first world, balancing — not generation — has become the main challenge.

As more countries push toward high renewable share systems, the risk of similar instability grows.

It’s no longer about whether we can produce enough electricity. It’s about whether we can balance it — instantly, seamlessly, and without disrupting consumers.

Flexibility is no longer optional – it’s the backbone of the grid

Many energy retailers and grid operators already understand this. But the Iberian blackout made the consequences of inaction strikingly clear.

Flexibility has moved from a nice-to-have buffer to essential infrastructure.

McKinsey estimates that flexible demand could reduce grid costs in Europe by €100 billion by 2040. But only if it's dispatchable, reliable, and orchestrated.

To protect consumers in a renewable-first reality, flexibility needs to extend beyond backup generators. It requires the real-time mobilization of millions of distributed energy resources (DERs) to provide rapid response capabilities and stabilize the grid during disturbances.

In practice, that means:

• Home batteries discharging instantly to support frequency and voltage stability
• EVs charging and discharging based on grid needs
• Smart appliances and flexible loads shifting consumption to help balance supply and demand across the day

These assets already exist at scale. By 2030, Europe will have over 65 million EVs and 50 million heat pumps connected to the grid, as well as a rapidly growing number of home batteries, smart meters and more.

But having flexible assets is only the start.

To make flexibility useful, these assets must be connected and controllable — at the right moment, and across many different systems and providers.

Connecting flexibility at scale is the real challenge

The Iberian blackout showed that flexibility is only valuable if it can be activated when it matters.

Today’s grid is increasingly decentralized. Millions of assets — EV chargers, batteries, heat pumps and more — have flexibility potential. But turning them into grid resources is not simple.

Different devices use different standards. Integrating and controlling them reliably, securely and in real time is one of the biggest operational challenges energy retailers and grid operators now face.

And it’s no longer optional:

• Regulatory requirements are tightening across Europe
• Grid operators need faster, cleaner ancillary services
• Customers expect seamless, intelligent energy experiences

If you can’t connect and control your flexible assets across OEMs, asset types and customer bases, you can’t activate them — and flexibility remains stuck on the sidelines.

Enterprise leaders are already moving – and the gap is widening

Some of Europe’s most ambitious energy companies have already understood this shift. They’re embedding interoperability platforms to turn millions of devices into virtual power plants, reduce reliance on fossil peakers and costly grid upgrades, and launch smart energy propositions for increasingly digital customers.

Flexibility is moving out of the experimental and into the mainstream. Retailers who delay face rising commercial risks, including regulatory penalties, limited grid access, and declining relevance in fast-moving energy markets.

The leaders won’t be those with the biggest fleets of DERs.

They’ll be the ones who can activate those assets when it matters most — reliably, instantly, and without slowing down operations.

The path forward: making flexibility real

The Iberian blackout was not caused by renewables. It was caused by a system that wasn’t yet ready to manage them at scale.

Avoiding the next blackout will require more than adding renewables. It means being able to activate distributed assets in real time — to balance the grid when clean generation alone isn’t enough.

In our work with leading energy companies, we see this shift happening every day.

Retailers and grid operators are moving from flexibility pilots to full-scale programs — turning EVs, batteries and other assets into reliable, controllable grid resources.

For energy companies, the challenge is clear: It’s not about whether you have flexible assets. It’s whether you can activate them — at scale, across fragmented ecosystems, and without operational drag.

That’s where leaders are focusing now.