Harder choices needed with regard to grid expansions in order to meet objectives of the energy transition

System operators go to great lengths to solve the problem of capacity scarcity (also called congestion) on grids. Nevertheless, they will not be able to complete all of their planned projects on time because of, among other reasons, staff shortages, protracted license-application procedures, and equipment shortages. These are some of the conclusions of the Netherlands Authority for Consumers and Markets (ACM) following an assessment of the system operators’ investment plans.

The grids of system operators TenneT, Liander, Enexis, and Stedin, are currently already unable to meet demand for transmission capacity. That is why ACM is in favor of a joint strategy, together with the Minister for Climate and Energy Policy, local governments, system operators, and other market participants.

Manon Leijten, Member of the Board of ACM, explains: “Our assessment of the investment plans shows that, over the next ten years, system operators will not and cannot completely solve transmission capacity scarcity. That is why, in the coming years, harder choices must be made when it comes to grid expansions. In that context, ACM finds it important that system operators are able to prioritize projects that contribute to the energy transition.”

That is why ACM calls on the Minister for Climate and Energy Policy to draw up a general prioritization framework that system operators can use to prioritize projects related to the energy transition. The system operators (through their trade association Netbeheer Nederland), too, recently called on the Minister to come up with a framework as soon as possible. ACM obviously would like to help in that process. If the Minister does not come up with a framework, the system operators will have to continue to decide themselves (within the statutory boundaries) which grid expansions and grid upgrades they carry out first, and which they carry out later, on the basis of their public duty.

ACM has sent a letter to the Minister for Climate and Energy Policy, informing him about the outcomes of ACM’s assessment of the system operators’ investment plans. In that letter, ACM says that, in its estimation, the problem of congestion will increase over the next few years, and that security of the grids may be at risk. The fact that system operators Liander and Stedin have chosen to prioritize expansion of their networks means that they accept that the necessary replacement investments cannot always be done on time. ACM understands this choice, given the enormous investments that need to be made. At the same time, it is important that quality does not decrease to such an extent that security of supply comes under pressure. ACM will pay extra attention to that balance in the next assessment of the quality safeguarding system.

ACM did not find any non-necessary investments in the system operators’ investment plans. In addition, all plans but one are considered to be sufficiently transparent, which means that the system operators can now finalize them. System operator TenneT still needs to adjust several points in the investment plan for the land-based grids that it operates. In its plans, TenneT, for example, failed to include information about the choices it makes for the projects it will build first and for those it will build later.

28-03-2022 Source: ACM