During Get Enspired! 2024 in Vienna, Austria on September 9 and 10, our CCO Dominique Becker Hoff was invited to share his thoughts on the Dutch energy storage landscape.
Dutch energy storage landscape: full of opportunities or facing major challenges?
The Dutch energy landscape, at first glance, presents the perfect conditions for large-scale energy storage solutions. With a healthy mix of ancillary services and energy markets, and a significant increase in renewable energy, the demand for flexible energy storage is clear. In fact, TSO Tennet has projected a need for 9GW of battery storage by 2030, with the country expecting to connect 23GW of offshore wind power within the next decade. Add to that strong interconnection capacity, allowing excess energy to be distributed to neighbouring countries, and you seem to have all the right ingredients for a thriving storage market.
Despite this potential, the actual implementation of energy storage has been slow. While 70GW of grid connection applications have been submitted, only 210MW of battery storage is currently operational - none of which is connected to the high-voltage grid.
The roadblock: high grid fees
One of the primary barriers to the development of battery storage in the Netherlands is found in the grid fees. Unlike neighbouring countries like Belgium and Germany, where energy storage is recognized as key infrastructure and exempted from grid fees, Dutch grid operators still classify storage as an energy consumer. This means storage systems are subject to the same grid fees as any other energy user, making operational costs high and reducing the economic viability of many projects.
In addition, Dutch grid fees are substantially higher than those in neighbouring countries. A recent report from Aurora highlighted that cost projections from Tennet show that this will not change in the near future. This pricing disparity leaves the Netherlands at a competitive disadvantage for large-scale energy storage projects.
A step forward: alternative transport rights (ATR)
Recently, the Dutch energy market regulator introduced alternative transport rights (ATR), which offer some relief for energy storage operators. These include time-dependent tariffs, TDTR and TBTR, which allow users to operate more flexibly with reduced grid fees. Tennet TSO's TDTR offers up to 55% discount on grid fees, which limits the grid fee impact on storage operator revenues. This demonstrates Tennet's clear support for the need for flexibility in the system.
On the other hand, DSOs have introduced TBTR, which offers smaller discounts on grid fees and restricts storage operators from utilizing their systems during certain time blocks to avoid potential congestion. This move indicates a more cautious approach from DSOs, as they fear that storage assets responding to national market signals could exacerbate local congestion. The negative impact of TBTR is detrimental on energy storage business cases.
Conclusion: moving in the right direction, but challenges remain
While these alternative transport rights are a step in the right direction, they mostly benefit high-voltage (HV) projects, which are now closer to becoming economically viable. Unfortunately, medium-voltage (MV) project feasibility remains limited by the current structure, missing a key opportunity to increase flexibility and grid stability at the local level.
S4 energy believes that to unlock the full potential of energy storage in the Netherlands, there needs to be a greater focus on solutions like TDTR and utilizing market instruments like GOPACS to alleviate congestion. By taking these steps, the Dutch energy market can fully embrace battery storage as an integral part of the energy transition, creating a more flexible, resilient, and sustainable energy system - both on a national and a regional level.
During Get Enspired! 2024 in Vienna, Austria on September 9 and 10, our CCO Dominique Becker Hoff was invited to share his thoughts on the Dutch energy storage landscape.
Dutch energy storage landscape: full of opportunities or facing major challenges?
The Dutch energy landscape, at first glance, presents the perfect conditions for large-scale energy storage solutions. With a healthy mix of ancillary services and energy markets, and a significant increase in renewable energy, the demand for flexible energy storage is clear. In fact, TSO Tennet has projected a need for 9GW of battery storage by 2030, with the country expecting to connect 23GW of offshore wind power within the next decade. Add to that strong interconnection capacity, allowing excess energy to be distributed to neighbouring countries, and you seem to have all the right ingredients for a thriving storage market.
Despite this potential, the actual implementation of energy storage has been slow. While 70GW of grid connection applications have been submitted, only 210MW of battery storage is currently operational - none of which is connected to the high-voltage grid.
The roadblock: high grid fees
One of the primary barriers to the development of battery storage in the Netherlands is found in the grid fees. Unlike neighbouring countries like Belgium and Germany, where energy storage is recognized as key infrastructure and exempted from grid fees, Dutch grid operators still classify storage as an energy consumer. This means storage systems are subject to the same grid fees as any other energy user, making operational costs high and reducing the economic viability of many projects.
In addition, Dutch grid fees are substantially higher than those in neighbouring countries. A recent report from Aurora highlighted that cost projections from Tennet show that this will not change in the near future. This pricing disparity leaves the Netherlands at a competitive disadvantage for large-scale energy storage projects.
A step forward: alternative transport rights (ATR)
Recently, the Dutch energy market regulator introduced alternative transport rights (ATR), which offer some relief for energy storage operators. These include time-dependent tariffs, TDTR and TBTR, which allow users to operate more flexibly with reduced grid fees. Tennet TSO's TDTR offers up to 55% discount on grid fees, which limits the grid fee impact on storage operator revenues. This demonstrates Tennet's clear support for the need for flexibility in the system.
On the other hand, DSOs have introduced TBTR, which offers smaller discounts on grid fees and restricts storage operators from utilizing their systems during certain time blocks to avoid potential congestion. This move indicates a more cautious approach from DSOs, as they fear that storage assets responding to national market signals could exacerbate local congestion. The negative impact of TBTR is detrimental on energy storage business cases.
Conclusion: moving in the right direction, but challenges remain
While these alternative transport rights are a step in the right direction, they mostly benefit high-voltage (HV) projects, which are now closer to becoming economically viable. Unfortunately, medium-voltage (MV) project feasibility remains limited by the current structure, missing a key opportunity to increase flexibility and grid stability at the local level.
S4 energy believes that to unlock the full potential of energy storage in the Netherlands, there needs to be a greater focus on solutions like TDTR and utilizing market instruments like GOPACS to alleviate congestion. By taking these steps, the Dutch energy market can fully embrace battery storage as an integral part of the energy transition, creating a more flexible, resilient, and sustainable energy system - both on a national and a regional level.
