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Evaluation by ACM: congestion management can free up more grid capacity

The new rules for congestion management that the Netherlands Authority for Consumers and Markets (ACM) set in May 2022 enable system operators together with their larger users to free up more capacity on the grids for other users. As a result, sustainable projects such as wind and solar farms, electric boilers, heat pumps, and charging stations can be connected to the grid sooner. Although the use of congestion management has, by now, already been gathering steam, system operators, other market participants and ACM also see room for improvement in order to make sure that congestion management can be used sooner and more often. For example, mandatory participation may help in getting larger market participants that are already connected to participate in congestion management. That will free up capacity for new competitors. In addition, standardization of contracts and compensations are expected to accelerate the contracting of flexible capacity.

Congestion management means that electricity suppliers and buyers help avoid physical bottlenecks in the grid by temporarily reducing electricity consumption or injection into the grid when there is less capacity during peak periods. For providing these services, suppliers and buyers will receive compensations from the system operators. This will free up more capacity on the grid, and more sustainable projects can be connected. For example, a recent agreement between energy supplier Eneco and system operator Enexis freed up capacity for connecting 30,000 solar panels in the northern province of Groningen.

ACM together with the system operators and other market participants have evaluated the implementation of the new rules regarding congestion management. ACM sees that congestion management is starting to materialize, but that there is potential for a substantially larger procurement of congestion services. Improvements in several areas are needed in order to unlock the full potential. This requires further-reaching efforts from system operators and other market participants, as well as ACM taking on an active role. In a number of areas, ACM comes to the conclusion that, in the short term, the rules need to be clarified. That is why ACM publishes, together with the evaluation document, a draft decision regarding changes to congestion management.

With the proposed changes, ACM wishes to ensure that more flexible capacity becomes involved in congestion management. In addition, system operators must assess sooner how much additional capacity can be freed up thanks to congestion management. In addition, ACM also seeks to clarify the opportunities for groups of larger users, such as business parks, to offer their congestion services in a collective manner. Another measure for stimulating congestion management is the ability to mandate private networks (also called closed distribution systems) to participate in congestion management if so requested by the system operator. ACM today publishes a separate draft decision regarding that last point.

In order to free up capacity on the grid for new sustainable projects, it is important that existing projects that have already contracted sufficient transport capacity also participate in congestion management, and that they offer to utilize the grid in a more flexible manner. Considering the gravity of transport capacity scarcity, participation in congestion management can no longer be solely on a voluntary basis, especially for electricity producers.

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