Published: 20 October 2023 at 14:05
With the cabinet expressing its intention to spare the congested power grid during peak hours, wholesale consumers are advocating a rapid upgrade of the grid. They unanimously express a desire for a plan of attack to avoid outages or sky-high peak-hour tariffs.
It was not unexpected, but still caused unrest when outgoing energy minister Rob Jetten reported that our electricity grid in all provinces is “largely full, probably full or almost full”. Jetten therefore wants grid operators to make agreements with companies to use less electricity at peak times, say between 4pm and 8pm, for a fee.
A contract through which companies are assured of capacity to transport power 24 hours a day, seven days a week should become a luxury product with a higher price. The minister also wants to make it possible for large consumers to coordinate their power consumption among themselves.
Why do these plans now hang like a sword of Damocles over business, and perhaps in the future even over ordinary households? Billions have been poured into expanding the electricity grid for years, but the demand for space is growing faster than cables can be laid. The government is committed to making land available and shortening the permit process. But for the next five years, it seems to be mainly carrying water to the sea.
And that bothers the business community. VNO-NCW and MKB-Nederland think it is good in itself that the government is betting on various stopgap measures, but tackling the core problem – via expansion and reinforcement of the power grid and better use of the existing grid – must be given priority.
‘The overcrowded power grid everywhere calls for new creative solutions,’ the umbrella organisations call out in a press release, without really specifying those solutions. In particular, they mention ‘more flexible use of the grid’ as part of the temporary approach to which the business community can quickly contribute. VNO-NCW and MKB-Nederland also see ‘opportunities to better align energy generation and consumption and to share energy’.
Techniek Nederland, the trade association for the engineering sector, is more concrete. The problems on the electricity grid can largely be solved by controlling technical systems in buildings and homes more intelligently. Measures ‘behind the meter’ can reduce the peak load on the electricity grid by 25 per cent, the organisation claims.
Chairman Doekle Terpstra of Techniek Nederland said: ,,We can reduce grid congestion, for example, by sharing sustainably generated energy with homeowners or businesses in the immediate vicinity. Government and grid operators should make that legally possible.” Techniek Nederland does not see technical measures as the only solution either. ”Energy saving and grid expansion remain necessary.”
Terpstra emphasises that the business community, with for instance mini-plants at business parks that distribute power intelligently, and the government should use every opportunity to create more space on the electricity grid in the coming years. Minister Jetten writes in the parliamentary letter that she is happy to continue discussions with the technology sector about possible solutions. We accept that offer as a matter of course.”
According to the grid operators, there are now 105 gigawatts of applications in the queue. These are unprecedented volumes. In 2021, TenneT ‘only’ managed to connect for 9.9 Gigawatts. Business organisations have long been calling for entrepreneurs to have access to those queues so that they can determine when to make their investment decisions.
Energy-intensive bulk consumers include printers and laundries, metal and greenhouse horticulture companies, (industrial) bakers, brick makers, chemical companies and manufacturers of products such as plastics and paper, damage repair companies and butchers.
Not only are there economic disadvantages, but ABN Amro says the overloaded power grid is getting in the way of the energy transition. The sour thing is that the grid has become so overloaded in recent years precisely because of the replacement of fossil fuels with renewable energy. And expanding power grid capacity takes years.
In one report, bankers and economists literally wrote: ‘Grid congestion is an obstacle to further electrification of our energy consumption.’ For example, as new construction projects stall. ‘Until a few years ago, it was sporadic that a new construction project did not get off the ground due to a shortage of grid capacity, nowadays this is the rule rather than the exception, especially outside the Randstad.’
ABN Amro’s experts believe that first the scarce capacity of the grid must be used more intelligently. Watchdog ACM is already doing a lot to combat congestion and speed up the energy transition, they argue. For instance, grid operators are given opportunities to take back capacity that has been contracted by companies but is not used within a maximum of two years. This capacity can then be redistributed.
Eventually, a new energy law should also provide relief and “allow companies to share power with neighbouring companies, and make it easier for companies to unite in an energy collective and share all kinds of energy supplies”. Today, however, solutions such as saving energy and generating solar or wind energy yourself can already be worked on. In addition, also self-storage.
Yet it still seems to be years before companies all have their own battery in the premises, so they do not put pressure on the power grid at peak hours. And this really can be done faster, concludes Techniek Nederland. ”The government should also do more to encourage home batteries and community batteries.”