Flowering flexibility: Going Dutch on grid congestion

Financial incentives in the Netherlands are trying to bring consumer flexibility into the Dutch congestion management equation. But how effective are they? Yusuf Latief investigates.

With the explosive proliferation of distributed energy resources onto Europe’s distribution grids, questions abound as to their management.

The overloaded power grid is a frequently seen news headline, with the likes of the Netherlands and even Germany this year reporting numerous consumption bottlenecks.

In other words, there is simply too much electricity being generated. And in further words: something must give.

In the Netherlands specifically, the grid operators have for some time been aware of these issues and certain incentives have been tested – smart contracts and new types of tariffs have been developed to encourage consumers to shift their consumption at certain peak periods.

For example, in June 2024 regional grid operator Enexis signed a unique capacity-limiting contract with paper manufacturer Sappi. Through the contract, Sappi makes 24MW of flexible power available to the DSO in an attempt to create space on the grid.

Less than a month later, another announcement came from the likes of electricity and gas supplier Eneco, trialling dynamic contracts with residential customers to tap their batteries for data and control.

Indeed, such contracts have been on the rise in a bid by the country’s operators to add flexibility as a means of smart power management, but how effective has it been? And would these techniques work into the foreseeable future?

This is what Eindhoven University of Technology doctoral students Bart van der Holst and Gijs Verhoeven, alongside Koen Kok, Professor of Intelligent Energy Systems in the Electrical Engineering Department, set out to answer.

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The critical Dutch issue

“Over the last two to three years, these problems have grown massively,” says Verhoeven, referring to the critical capacity issues that have been plaguing the Dutch power grid.

“The Netherlands started the Go-E consortium consisting of regional grid operators, energy suppliers and knowledge institutes – where we come in – to see if it is possible for flexibility in the built environment to help mitigate these problems.

“We looked into the different incentives that are either newly introduced in the Dutch system, such as the more marketbased approaches, or tariff instruments that are currently debated or investigated to help solve this problem in the network.”

Van der Holst adds: “We simulated the effectiveness of various instruments, such as network tariffs and contracts between the grid operators and market parties, for example, for providing flexibility for congestion management.

“What we found is that these measures can mostly help alleviate grid congestion in the short term. But at the same time, we see that, because we’re in an energy transition, the system is quickly changing. Electricity markets are getting more volatile, and end users are getting more exposure to the markets and can participate more.”

According to the researchers, although a combination of these smart contracts may lead to a more even distribution of power use throughout the day, this is only the case in the short term.

Should more and more consumers take on these contracts, deciding for themselves when to use or store power based on price, these users would consume at the same time.

This system would, in the longer term, create its own new form of congestion.

Adding to this, customers tapping their clean tech to make money – alongside good intentions meant to ease supplydemand imbalances – would only add fuel to the fire.

“Ultimately,” says van der Holst, “these instruments need to be flexible, adaptable, and may need revision if such trends continue.”

Smart consumption vs grid buildout

Part of the rationale behind these smart measures has been mitigating the significant price tag placed on building out the power grid to be fit for purpose – a core issue industry has been grappling with.

Throughout the year, in the Netherlands specifically, record investments in grid expansion have been made by the grid operators. Take, for example, TSO TenneT, which in August announced a 30% increase in its grid spend this year compared to 2023.

But if managed smartly enough, would these flex instruments reduce the need for buildout and its investment requirements?

According to van der Holst, while such incentives would certainly help, the answer depends on their extent.

“In the future, it will probably be a combination of both grid reinforcements and smarter incentives.

“If we only apply reinforcements, we’re always building and have to continuously take care that the highest peak can always be covered. This means spending a lot of money and a lot of manpower for situations that might not occur often.

“We believe it’s good to do that to an extent, but if we can cover some of the more extreme cases with smarter incentives, that can be very efficient as well.

“But it is true that, to prepare the grid for a net-zero situation, more electricity will need to go through the grid and that extra investment will be necessary as well.”

Adds Professor Kok: “At the same time, when we look at the level of investments needed – if we are going to save a little bit of a huge amount of money, we still end up with that large sum. There are also more trades closer to real time in the intraday and balancing markets.

“Around ten years ago we didn’t have much of an intraday market and now there is a lot more uncertainty surrounding the generation coming from wind and solar.

“There are also all these loads coming from EVs and heat pumps, for example, that are synchronous with the load patterns. All of this will lead to more volatility in the load profiles and will result in higher peaks.

“It will be more efficient to have a system where we don’t see congestion as a problem that needs to be solved, but congestion as a part of the solution.

Then it becomes more a matter of capacity management to shave peaks and avoid these last bits of capacity that would need to be built or reinforced, and only use a few hours per year, or even decade.

“Needless to say, that would not be very efficient.”

Researcher profiles:

Gijs Verhoeven

Within my Bachelor’s in energy technology, I had an internship with one of the DSOs in the Netherlands, also touching a bit upon the congestion problems.

Then when I entered my Master’s in sustainable energy technologies, I really dove into the grid aspect as well.

Professor Kok’s course on smart grids and electricity markets was one of the first courses that I took, and that really inspired me to dive deeper into this topic.

On one side, it’s also very exciting to be able to work closely together with a lot of people now in the Netherlands and really try, or at least take some steps in the right direction, to solve one of the biggest challenges that we have in the sector.

The capacity limitations that we have in the Netherlands are really putting a strain on the energy transition, because we cannot move as fast as we want to.

So if we can help get some interesting insights and help out with shaping how the future should look – I think that’s one of the main drivers for me.”

Bart van der Holst

I’m from an applied physics and applied mathematics background. In essence, I had nothing to do with energy, beyond its conservation.

But during my Master’s, I had the opportunity to look around at some of the grid operators and learn about their very big challenges quite early on.

I personally think that if I have to spend my working hours some way, there aren’t many better ways than working on some of the biggest challenges that the country has to face.
And grid congestion is really one of those.

On every report on energy in the Netherlands, grid congestion is mentioned as one of the big challenges to tackle. I find that, if I want to contribute something from my own background, then this is a really cool problem to work on.”

Professor Koen Kok

I have a background in both electrical engineering and computer science. When I started my computer sciences Masters, I thought: ‘Well, I’m gonna leave the electrical engineering behind – that’s old technology, less interesting’.

But because of this combination, I was drawn into the smart grids realm. In the first decade of the century, if you knew something about electrical engineering and you were a computer scientist, then you were very interesting.

I worked at an Applied Research Institute with a group that was pioneering smart grids, before the term ‘smart grids’ was coined.

Having this position, sometimes I’m a bit frustrated, because at the time we worked on technology – for instance, the PowerMatcher technology – for which I wrote the first lines of code, and I wrote my PhD thesis on the theoretics behind it and the theoretical foundations.

That was basically 10-15 years ago.

We had the solutions on the shelf for the problems that we are now having, and somehow that wasn’t adopted in the sector. Part of this frustration also makes me push on and keep putting it on the agenda.

On the other side of the coin, these are very exciting times, because now the rest of the world also sees why we need these kinds of things. And hopefully we will make the right choices.

The decisions that we take in the next five years or so will determine how we look back in 2035. So it’s really important that we take the right decisions now.”