D7.1 - Regulatory background for smart grid-ready buildings and the energy network

This deliverable provides an EU-level regulatory analysis of the Electricity Market Design (EMD), the Renewable Energy Directive (RED III), the Energy Performance of Buildings Directive (EPBD recast) and the Energy Efficiency Directive (EED), with a focus on how these frameworks shape the role of buildings in the energy transition. Under their combined implementation, buildings are increasingly expected not only to reduce energy demand, but also to support the decarbonisation of heating, the electrification of end uses, the integration of renewable energy in the built environment, and the gradual phase-out of fossil fuels. In this context, buildings are becoming more important not only as energy consumers, but as active elements of a more flexible, efficient and resilient energy system. 

The report examines how the revised EMD, RED III, EPBD and EED together determine whether buildings can contribute to energy sharing, aggregation, smart control, storage, renewable self-consumption and other flexibility services at building and neighbourhood level. In this context, renewable energy generation in buildings and storage are not only relevant measures in their own right, but important enabling conditions for flexibility services, as they increase the ability of buildings to shift demand, optimise self-consumption, interact with dynamic price signals and support the wider integration of renewable electricity. The EMD provides the market framework for active customers, aggregation, dynamic pricing and energy sharing; RED III strengthens collective self-consumption, renewable energy communities and renewable deployment in buildings; the EPBD supports smart-ready, zero-emission and EV-ready buildings, with a particular role for the Smart Readiness Indicator; and the EED reinforces the Energy Efficiency First principle and the need to consider demand-side solutions in planning and investment decisions. Taken together, these provisions determine whether buildings can participate technically, legally and economically in flexibility services at building and neighbourhood level.

The deliverable also reviews implementation lessons from the six BlueBird demo contexts: Spain, Brussels and the Walloon Region in Belgium, Austria, Germany and Poland. The analysis is based on desk research of relevant EU and national legal and policy documents, complemented by structured input from project partners. Across the analysed countries, the report finds that important enabling elements already exist, but their implementation remains uneven and fragmented. In several cases, EU concepts are only partially transposed or not yet operationalised in a way that enables practical uptake. This affects, in particular, the functioning of energy communities, the role of aggregators, the coexistence of multiple contracts, and the ability of buildings to participate effectively in flexibility markets.

At the same time, the report identifies issue-specific enabling practices across the analysed countries rather than one single leading national model. Some countries provide more advanced examples for specific aspects, such as collective self-consumption and multiple-contract arrangements, energy community design, data access, aggregation-related governance, or planning integration. However, the overall picture remains one of partial progress rather than full regulatory readiness. Important barriers include unclear legal definitions, restrictive participation conditions, narrow geographical limits, burdensome administrative procedures, insufficient access to timely and granular metering data from DSOs, and the fact that buildings are still not systematically considered as alternatives to grid reinforcement in network and local planning, despite the direction set by the EED. 

Overall, the report shows that the key challenge is not only to introduce relevant legal provisions, but to ensure that they work together in practice. Unlocking the flexibility potential of buildings will require better alignment across directives and national implementation frameworks so that data access, market access, energy sharing, smart-building requirements and system planning function as mutually reinforcing elements. Only under these conditions can buildings support a more decarbonised, efficient, resilient and consumer-centred energy system by integrating distributed renewables, using storage and smart controls to unlock flexibility, reducing system costs and grid pressure, strengthening energy security and competitiveness, and enabling citizens and communities to participate more actively in the energy transition.