ACM: flexible utilization opens up more possibilities on congested grid, projects with social functions prioritized

Today, the Netherlands Authority for Consumers and Markets (ACM) presents a comprehensive package of measures aimed at reducing the problem of grid congestion. These measures are meant to make it more appealing to utilize the grid in a flexible manner. ACM thus ensures that large-scale users will be better off if they utilize the grid less during peak hours. In doing so, they free up capacity for other users and for producers of sustainable electricity. Thanks to a prioritization scheme for projects with a social function, system operators are able to use the freed-up capacity to connect, for example, schools or hospitals to the grid sooner.

The problem of grid congestion predominantly occurs during peak hours: peak hours are often between 6:00 and 9:00 hrs. and between 16:00 and 20:00 hrs. During those periods, there is too much demand for or too much supply of electricity. During non-peak hours, there is still sufficient capacity. Thanks to ACM’s measures, large-scale users can get compensations of up to 50% of their grid costs if they utilize the grid less during peak hours. In this way, capacity is freed up for other companies, which would otherwise have needed to wait a long time.

Manon Leijten, Member of the Board of ACM, adds: “With this package of measures, we offer ample opportunity to utilize the available capacity on the grid more efficiently. That is necessary and important because grid expansions will take a very long time, but also to keep the grid affordable.”

Congestion management

ACM has sharpened the rules for congestion management in order to ensure that, in areas with too much production, solar and wind farms can be connected anyway. Congestion management means that system operators are able to mandate larger companies to offer flexibility (in exchange for compensations). With the introduction of a participation obligation, more flexibility will become available, and more opportunities for new connections will be created.

Prioritizing projects with a social function

The waiting list for access to the grid keeps getting longer and longer. With the prioritization framework established by ACM, system operators are now able to prioritize projects with social value. So-called congestion softeners, such as battery systems, which create more capacity for other users, will be given precedence first. The second category is security, such as national defense, the police, and medical first responders. The third category covers numerous basic needs such as drinking water and education. ACM has drawn up the prioritization framework because the current system (where system operators grant projects access to the grid on the basis of ‘first come, first serve’) does not always work out well.

The prioritization framework is the result of extensive consultations with the Dutch trade association of system operators Netbeheer Nederland, the Association of Netherlands Municipalities (VNG), the Association of Provincial Authorities (IPO), the Ministry of Economic Affairs and Climate Policy (EZK), and other interested parties. The prioritization framework was drawn up based on objective and transparent criteria, which is in accordance with the European statutory requirement of non-discrimination. System operators are required to use the prioritization framework from 1 October 2024. Applicants will have to substantiate as to why they should be given precedence.

Connection deadlines

The package of measures additionally consists of arrangements between system operators and grid users regarding the connection deadlines for larger companies. In most cases, there is a deadline of up to 52 weeks to realize a connection for these users, depending on the circumstances.

Use it on time or lose it

In addition, system operators will check more strictly if companies actually utilize all of the capacity that they have contracted. If that is not the case or if companies no longer need that capacity, the system operator will be able to restrict the contract. In this way, capacity is freed up for others again.

Opportunities for experimentation

ACM gives system operators and businesses the opportunity to experiment with a more efficient utilization of the grid capacity. If rules stand in the way of experimentation, market participants can contact ACM. ACM will then decide either to condone the experimentation or issue an exemption.

National Action Program for Grid Congestion

ACM has created these measures in collaboration with system operators, interest groups, local governments, and other stakeholders. ACM also collaborates with all of these market participants in the National Action Program for Grid Congestion (LAN). As part of that action program, ACM, together with the system operators, assesses whether additional measures are possible, for example, the creation of a transmission tariff for businesses that feed into the grid, and the introduction of group contracts for transmission capacity for business parks, for example.