Flexibility capital and organisational demand-side flexibility: a conceptual framework illustrated by Norwegian organisations

Abstract

In recent years, decarbonisation, electrification, and the increasing integration of variable renewable energy sources have intensified the need for demand-side flexibility in low-carbon electricity systems. While industry and commerce are widely recognised as holding substantial flexibility potential, their ability to mobilise this potential varies considerably across organisational and sectoral contexts. Existing research has primarily approached this flexibility as a techno-economic optimisation problem, while less attention has been devoted to the organisational and institutional conditions required to translate technical flexibility into active participation in flexibility markets. This article develops a conceptual framework for understanding organisational demand-side flexibility through the concept of flexibility capital. Building on socio-technical perspectives and demand response research, the article conceptualises flexibility as an organisational capability shaped by technical possibilities, organisational routines, financial resources, digital infrastructures, and institutional conditions. The framework is illustrated through interview and survey material from Norwegian organisations across commercial, industrial, agricultural, and public sectors. The findings show that technical flexibility potential does not automatically translate into actionable flexibility capability. Organisations frequently identify flexibility opportunities such as storage, buffering, and energy management systems, but their ability to mobilise these opportunities is constrained by operational continuity, investment costs, fragmented responsibilities, and limited organisational capacity. The article argues that flexibility is socially and institutionally organised rather than solely technically determined. By extending the concept of flexibility capital from households to organisational contexts, the framework contributes to research on demand-side flexibility, organisational capability, and flexibility justice in future low-carbon electricity systems.