Infrastructure

Positions infrastructure

Position Electricity Infrastructure

1. Electricity Infrastructure
Electrical infrastructure allows for the transport of electricity from where it is generated to where it is used. The management of this infrastructure is of great importance, because it enables producers and providers to produce electricity, transport it, and supply it to end-users. In the Netherlands, the responsibility for making connections to the electricity grid possible lies with transmission system operators (TSOs) and distribution system operators (DSOs). Everyone has the right to be connected to the electricity grid within a certain time.

The electricity grid in the Netherlands is composed of three different voltage levels. Firstly, the high voltage transmission network is managed by TenneT (TSO). This network plays a crucial roll in the transport of a large part of the generated electricity throughout the Netherlands. This high voltage electricity is transformed a medium voltage by transformers in step-down substations. The medium voltage distribution network is managed by regional DSOs, which distribute the electricity to cities and towns. Lastly, the voltage is stepped down once more to a low voltage network by substations. The low voltage network, also managed by regional DSOs, allows for electricity to be delivered to homes, companies, and other end-users.

The electricity grid will be key in allowing the Netherlands to electrify in the coming years. It makes it possible for all generated electricity to be delivered to anyone who has a need for it.

1.1 Grid shortages

One of the most important tasks of our time is to realize the energy transition and achieve the climate goals. There is massive investment from energy companies into sustainable electricity generation. However, bottlenecks in the electricity grid make it difficult to get the produced electricity to the right place at the right time.

According to Energie-Nederland, the best solutions to overcome shortages on the power grid are:

Accelerated procedures for permits to reinforce the grid
Accelerated procedures should be introduced for permits needed to expand and reinforce the electricity grids.
Better investment plans
The grid operators’ investment plans should be based on relevant scenarios. In this regard, the scenarios chosen for the new investment plans were very appropriate. Next, the plans should clarify the gap between the investments required and those feasible in time. The choices made by grid operators should also be clearly explained.
Sufficient implementation capacity by grid operators
The Consumer & Market Authority (ACM) must review the investment plans. In the case of underinvestment, actions should be set up to ensure adequate resources in time, such as manpower, materials, and financing. For example, an impending staff shortage demands active recruitment.
Better collaboration between grid operators, government, and market

Governments can use zoning ordinances to place restrictions on site selection. This offers clarity to market participants.
Grid operators are required to work with market participants in looking at applying temporary reduced electricity transmission as soon as the electricity grid becomes too full. This is called congestion management. If research shows that the financial or technical limit for applying congestion management is reached, a system operator may defer a request for transmission. Market participants with new means of generation and storage units will always be able and willing to adjust their use of the grid. After all, they will receive compensation for participation in congestion management.

Market participants can invest in batteries or other solutions if the grid operator issues a targeted call for flexibility procurement. This is also called the ‘reinforce unless’ tender, and is not applied nearly enough.

1.2 National Grid Congestion Action Program (LAN)
The National Grid Congestion Action Program (LAN) was presented in late December 2022. Energie-Nederland and several other organizations participate in the LAN, under the leadership of the Ministry of Economic Affairs and Climate Policy. The LAN contains actions aimed at accelerating grid expansions and better utilization of the grid. Efforts are also being made to increase flexibility.

However, the measures from the action program are not a guarantee that there will be sufficient grid capacity to achieve the climate ambitions of the Cabinet and the businesses. The LAN announces good initiatives. However, there is a lack of outcome agreements about the required grid reinforcement. A serious plan of attack to make this possible requires unorthodox measures. This could include a radical overhaul of procedures and permit processes. Or the establishment of a crisis team. Nor does it begin to truly address the feasibility issue. This leaves an idea like the right-to-challenge approach underexposed. This approach is based on the idea that if parties other than the grid operator are given the opportunity to implement grid expansions, more transmission capacity may be added more quickly.

The Cabinet’s climate ambitions justifiably demand much from all parties in society. Sufficient grid capacity is an absolute prerequisite for market participants to be able to meet their requirements. To meet this condition, we would like to continue the conversation with the government and the grid operators.

1.3 Congestion management
Grid operators are required to work with market participants in looking at applying temporary reduced electricity transmission at times when the electricity grid becomes too full. In other words: congestion management. Facilitation of new transmission requests can only be deferred once congestion has been identified after publication of the congestion study, which will also show the technical and/or financial limit is reached. Until the congestion report is published, it has not been shown why a transmission request is not reasonably possible. As such, a transmission refusal is unjustified until publication.

1.4 Reinforce unless
Energie-Nederland believes that fully committed efforts should be made to roll out congestion management. In addition, grid operators can set up ‘reinforce unless’ tenders whereby the grid operator can purchase flexible capacity.

The aim is to better utilize the grid’s limited capacity.

It is crucial that there is acceleration in grid reinforcement and expansion. However, grid operators are not expected to be able to meet all demand for transmission capacity in the coming years either. That is why smarter utilization of the scarce grid capacity is important.

Position Gas Infrastructure

In the Netherlands, Gasunie Transport Services owns and operates the national gas network. This link shows the national network. In addition to the national network, there are the regional transmission pipeline networks. This is what all households and the vast majority of businesses are connected to.

Energie-Nederland members transport gas via this network of feed-in points (entry) to customers connected directly to the national network, regional networks, gas storage facilities and connections to other countries (exit). The companies that are gas-certified to transport gas (shippers) are responsible for balancing the feed-in and withdrawal of gas.

The Netherlands has seen investments worth billions into the gas network. Energie-Nederland is critical of costly network expansions as even now, there are parts of the network that are hardly used. The conversion of part of the gas pipelines to hydrogen pipelines is a great opportunity.

Position Hydrogen Infrastructure

If we start scaling up hydrogen only after 2030, it will probably be too late to meet Dutch and European ambitions. There should be significant scale-up until 2030 in order to take great strides thereafter.

For hydrogen infrastructure, the construction of the network and the required storage facilities should be started as soon as possible. Energie-Nederland argues that Gasunie (HNS) should be commissioned to do this. As for users of the transportation network, we argue that signed contracts should not be a prerequisite for providing the subsidy and starting construction. Users are currently waiting for infrastructure and the infrastructure is waiting for users. This is causing unnecessary delays and poses a coordination problem that the government should resolve.

Furthermore, Energie-Nederland argues that:

the transport costs for the network should be made affordable and stable for ‘launching customers’ – new customers/consumers – over the coming years. Certainty is a prerequisite for making timely investment decisions.

legal certainty should be given to parties wishing to connect to the hydrogen network by establishing the role of HNS in the Energy Act. For this, follow the template of the offshore wind policy, where developers are indemnified if the infrastructure is not completed on time.

Position Green Gas Infrastructure

Green gas can play a major role in making our gas consumption more sustainable. It could also make our built environment more sustainable in a low-threshold way (see 3.3 Green gas).

Having the infrastructure in place is a prerequisite for being able to achieve the ambitions related to green gas. The fact that the existing infrastructure for natural gas can be utilized for this is an advantage. Important decisions still need to be made on a number of issues:

It is likely that many new green gas production sites will emerge. For example, through manure fermentation. This includes many relatively small sites. All these new production sites must be connected to the existing gas infrastructure in a timely manner, so that they can feed in. At the very least, this requires collaboration with local governments, EBN and the Union of Waterboards.
Permits should be issues more quickly.

The capillaries of the gas infrastructure should be adapted to enable increased feed-in.

Sustainable energy system

Energy market

End consumers