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Broad support for prioritizing projects with a social function, ACM calls on system operators to start making preparations

The Netherlands Authority for Consumers and Markets (ACM) has received 78 responses to the draft code amendment decision on opportunities for prioritization of transport requests (in Dutch: ontwerpcodebesluit prioriteringsruimte transportverzoeken). These responses show that market participants are positive about the proposal to lay down in a statutory regulation the ability to prioritize projects that contribute to major social objectives. With this proposal, system operators will have the ability to deviate from the usual principle of ‘first come, first serve’ when granting access to the grid. ACM calls on the system operators to start working on applying the new rules, at least by making the necessary preparations. If system operators are able to justify why priority is already necessary in a specific case, ACM will not take enforcement action.

Opinions about the code amendment proposal regarding prioritizing projects with a social function

In the responses to the proposal regarding prioritizing projects with a social function, ACM has also received suggestions for improving the proposal itself. Multiple market participants want to expand the prioritization framework with additional social objectives. At the same time, several market participants believe that the proposed prioritization framework is too broad, and should actually be limited to cases that are absolutely necessary. ACM aims to publish the definitive code decision in March 2024.

Dealing with congestion problems

ACM wishes to accelerate the energy transition, and prioritizing projects with a social function is one of the activities with which ACM deals with the problem of grid congestion. With this ability to prioritize, system operators are able to prioritize projects that contribute to major social objectives, such as safety, health care, sustainability, and reducing grid congestion. As a result, the scarce transport capacity is allocated as efficiently as possible during the time that system operators need to expand the grids.

In addition, ACM is also working on other measures that deal with grid congestion. Congestion management entails producers and buyers of electricity helping in reducing the burden on the grid. They can do so by temporarily reducing the supply or consumption of electricity at times when there is too little capacity. For example, ACM, on 25 September 2023, published a draft code decision with which the ability to apply congestion management is expanded. Moreover, ACM will mandate participation in congestion management for private networks (also called closed distribution systems or CDSs). As a result, system operators will also be able to use the flexibility that is available to the users of these private networks.

Additionally, ACM wishes to make it possible for system operators to offer connection and transmission agreements (in Dutch: aansluit- en transportovereenkomsten or ATOs) without guaranteed contracted capacity. This means that the connection can only be used at times when sufficient capacity is available. ACM also recently published the draft code decision UIOLI (in Dutch: GOTORK). This allows system operators to make unnecessarily contracted transport capacity available to other grid users.

Tariff regulation

In order to accelerate the energy transition, system operators must also have sufficient financial leeway to make investments in the expansion of the grids. Through its regulation, ACM wishes to help them do so. ACM is currently conducting a broad exploration of finding a new method for tariff regulation.

Furthermore, ACM is working on changes to the tariff structure, as a result of which grid users will have more incentives to utilize the grid efficiently. In that context, ACM soon expects to receive two concrete proposals for code amendments of the system operators: one proposal in which the transport tariffs will vary between time slots in order to stimulate the utilization of the grid during slow periods, and another proposal for a lower tariff for storage and other flexibility sources, if they relieve the grid during certain periods. In addition, ACM is looking into a tariff for feeding into the grid and possible additional adjustments in the tariff structure that can further contribute to efficient utilization of the grid.
All of the abovementioned measures help utilize the grid more efficiently and deal with the problem of grid congestion.