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When we talk about congestion, we mean an accumulation or blockage. But what does congestion mean in the power industry? In this case, we mean congestion on the power grid. Congestion occurs. We then speak of grid congestion. Either the supply or the demand for power is greater than the power grid can handle at that time.

This is because the grid can only transport a certain amount of electricity. If that amount is exceeded, the power grid becomes overloaded. In the worst case, this leads to power outages in certain areas. This is expected to happen more often in the future. To prevent this, many new businesses can be temporarily disconnected from the electricity grid.

Why now?

More and more reports of grid congestion are appearing in the news. This has to do with the increased generation of renewable energy. In sparsely populated areas of the Netherlands – such as Groningen – many solar and wind farms are being built. In itself a good trend, but the generated electricity must be fed into the electricity grid. This is difficult, because the very cables in these sparsely populated areas have a lower voltage than in other parts of the country. That once made sense: fewer people, fewer businesses, so less demand for electricity. The power grid did not need to transport a large amount of electricity. Anno 2023, the power grid needs to handle a large amount of electricity everywhere in the Netherlands. As a result, the grid capacity in many areas is used to its maximum.

Back of the line

New solar and wind farms often can no longer be connected to the grid. The maximum capacity has been reached. Initiators find themselves in a queue. That number is rising rapidly: in Groningen alone, hundreds of projects are in the queue.

Not only is the supply of energy rising, but so is demand. Businesses have a greater need than ever to switch to electricity. Furthermore, the number of data centers in our country is growing. These, too, are large consumers of electricity.

All grid operators are investing billions in additional grid capacity. Yet the question is whether the growth of new farms and the growing demand for electricity can be kept up.

Double feeling

The energy transition is in full swing. And that’s a good sign. Unfortunately, the very potential suppliers of renewable energy are having trouble getting a foothold. They have to wait until there is a free spot on the electricity grid.

You may be thinking now: why don’t we expand the power grid faster? Unfortunately, it’s not that simple. This is a real task, which will take even longer with the current staff shortage. From permit to working cables can take up to 7 years.

A middle ground must be chosen: not unnecessarily hindering the energy transition, but also not overloading our power grid.

The solution: congestion management

Ok. The problems are clear. But what can we do? Start congestion management. That means smartly anticipating expected supply and consumption. One way of congestion management for companies is to use less energy at peak times. And solar and wind farms will feed back less energy on sunny or windy days. That sounds crazy. A business that temporarily doesn’t buy the energy it needs is losing revenue. And the owner of a solar or wind farm also wants to supply back at times when there is a lot of generation. That is his revenue model. The solution: give companies compensation if they cooperate in congestion management.

How does that work?

Grid operators predict each day how much electricity will be transmitted on the grid. Is a peak, and thus possible congestion, expected? Then large consumers are asked to temporarily scale down their supply or consumption. They receive compensation for this.

The space freed up can be used in other areas. In places where the electricity grid is not full at that time. In this way, the electricity grid is not overloaded and parties cooperating in congestion management do not suffer negative consequences.

Is this solution ideal? No. The goal is to make the electricity network so heavy that congestion management is no longer necessary. It does cost the grid operator money. Until the electricity network is substantially expanded, congestion management is a smart method to fairly distribute the available energy at peak times.

Something for your business?

Congestion management can bring interesting savings to your business. COMCAM can take care of this for your company through our unique approach to Energy Portfolio Management. COMCAM is the specialist in all options for energy contracts for supply and feed-in. Learn more about the various congestion management options.

Would you like personalized advice? Then contact us.