Frequently Asked Questions - Congestionmanagement

The congestion management system will be introduced according to a tight schedule. Up-to-date information on the current state of affairs can be found on the TenneT website . Here you will find a detailed timetable, an overview of key decision moments, information on the introduction of new working methods and modifications to the IT system, and information on when requests to amend the existing Codes will be submitted.

A congestion area is an area where insufficient electricity transmission capacity is available in relation to the installed production capacity. A congestion area is a clearly defined region in which the problem occurs, but not necessarily a geographically contiguous area. Usually, a congestion area comprises several interrelated electricity connections within a single grid section. The Groningen-Zwolle line, for instance, is vulnerable to long-term congestion. This potential problem can be avoided by lowering the production levels and the total capacity in the north of the Netherlands.

Yes, the congestion management system is a uniform method. However, the moment when congestion management is activated can differ from area to area, because the times when congestion occurs also differ from area to area. For instance, it is known that congestion in the Westland region occurs mainly in the afternoon from 4 to 5 p.m. In other areas, congestion may occur at other times during the day. Where and when exactly congestion management is to be activated is currently being investigated further. Ultimately, this depends on the number of megawatts produced by suppliers, the time when they produce this capacity and consumption patterns in the relevant congestion area. The objective of the congestion management system is to avoid any exceedance of safe transmission capacity levels.

It is inevitable that the introduction of congestion management will have some legal consequences, but it is not yet exactly clear what those will be. When it is clear which exact solution has been selected and when that solution has been elaborated in full, the legal consequences will become more apparent. In any case, the introduction of congestion management will not affect electricity supply contracts in any way. However, it may have consequences for parties that have entered into imbalance adjustment contracts.

A special project group has been set up to develop possible solutions to the pressing problems in the Westland region. The project group’s aim is to develop a temporary solution that will bear as much similarity as possible to the final proposal for tackling congestion. Such a temporary solution will then be introduced as quickly and simply as possible. The project group’s members include representatives of Westland Infra, Westland Energie Services, LTO Glaskracht, TenneT and several Programme-Responsible Parties.

TenneT and the regional grid operators are required by law to invest in the quality of the (high-voltage) grid. However, it is not TenneT’s responsibility to monitor whether such investments are actually being made; that is a matter for the Netherlands Competition Authority. If all else fails, the Minister may compel grid operators to invest in the grids under their management.

In any case, a system will be introduced whereby producers can make money from not producing electricity. The exact consequences of the congestion management system for electricity producers will depend on the solution selected to tackle congestion and how that solution is elaborated

What will happen to previous commitments will not be known until the relevant amendments to the Codes have been finalised. This will happen in October 2008 at the earliest. Imbalance adjustment contracts may need to be renegotiated as a result of changes to existing Codes and legislation.

BritNed is a submarine electricity cable between the United Kingdom and the Netherlands in which TenneT participates. These activities are separate from TenneT’s grid-operation activities. TenneT’s independence is monitored by the Dutch government, which oversees TenneT’s performance of its activities.

Yes, various alternative solutions have been investigated. They have all been assessed on the basis of the following seven aspects: 

In the end, the congestion management system as it is now being introduced turned out to be the best option. Some alternative options that were looked into were: 

1. Doing nothing and leaving everything as it is. This would result in a ban on the connection of new capacity. This would not be a realistic option, because the Minister of Economic Affairs wants all connection and transmission capacity requests to be granted. 
2. Implementing a runback scenario. This solution is possible under current policy, but even under runback conditions the transmission capacity will still only be available to a limited extent. Therefore, the runback option does not conform to the Minister of Economic Affairs’ policy statement that in principle all requests for connection and allocation of transmission capacity must be granted. Consequently, runback is not a suitable alternative for the national high-voltage grid. 
3. Removal of transmission restrictions. This is not possible because grid operators cannot guarantee grid safety in the case of unrestricted transmissions. Congestion management has become necessary because of the time required to upgrade the grid. This upgrading may take longer than the construction of new production facilities.
4. Buying out parties who wish to produce additional capacity. This is probably only possible at very high costs, particularly if it concerns large production units. Moreover, buying out is a measure that may cause market speculation. Therefore, it is not a market-oriented solution.   

In principle, there is no relationship between congestion management and energy balance maintenance. Congestion management can, however, cause additional upward adjustments outside the congestion area. If market parties in the congestion area have purchased too many megawatts and, as a result, congestion is imminent, the supply will need to be reduced. The same number of megawatts will then need to be generated in another area during the same period, because the capacity has already been promised to a customer.

A congestion area will continue to exist as long as the available transmission capacity is insufficient for the amount of capacity generated. This can be for a very short while, i.e. for a few months, but sometimes also for seven years or more, for instance when a new high-voltage line needs to be installed. Whether an area becomes a congestion area depends on the developments in that particular area. As long as the congestion remains, however, congestion management will be applied.

TenneT will publish all relevant information on its website.

Deployment of reactive power is outside the scope of the congestion management system.

All (market) parties which have an interest in congestion management are involved in the system’s development. These include TenneT, regional grid operators, interest groups – like the Netherlands Association of Agricultural Entrepreneurs and Employers, the Free Trade Organisation for Electricity and Gas, the Association for Energy, Environment and Water and the Association of Energy Producers, Traders and Retailers in the Netherlands  – the Ministry of Economic Affairs and the so-called Programme-Responsible Parties. The latter are commercial enterprises that trade in electricity, such as trade departments of electricity companies. In its capacity of independent supervisory body, the Office of Energy Regulation of the Netherlands Competition Authority (NMa) is informed about the development of the congestion management system. The Office of Energy Regulation will first assess whether amendments proposed for the Codes conform to the relevant statutory requirements before adopting the amended Codes.

We still have to decide what exactly is to happen to the existing runback contracts. In practice, under runback contracts an electricity producer is not paid for any power he supplies in excess when he has been asked to supply less. On the contrary, the producer himself has to pay for power that needs to be generated at a different location because it has already been ordered.

However, a solution based on runback has been offered to producers who wish to be connected to the high-voltage grid despite restrictions on supplying to the grid. TenneT has submitted exemption requests to the Office of Energy Regulation for runback in the Maasvlakte industrial zone and in the north of the Netherlands. 

A congestion area will be designated as such at the moment when congestion is going to occur. New congestion areas can be added, but it is difficult to predict where this will be. TenneT and the regional grid operators are trying to get a better idea of potential congestion areas by comparing the planned production capacity and the submitted requests for new production capacity with the available and required transmission capacity. In any case, it will become clear during the construction of new plants whether a new congestion area will arise. The outcome varies between regions. With regard to the Westland region, for instance, we already know exactly how much capacity will be supplied over the coming years. For the rest of the country, we are currently making an inventory of this capacity in consultation with the regional grid operators. For Eemshaven, for example, we do not even know at the moment when the new power plants will be built, let alone when they will be completed and taken into operation.

Ultimately, TenneT or the regional grid operators can only confirm that the required transmission capacity is available when the foundations for a new plant are laid. In order to know whether a congestion area may arise somewhere, TenneT and the regional grid operators need to be involved in new developments in a timely manner. If this does not happen, TenneT can only make plans for expansion of the grid at a later stage, and the risk of congestion will increase considerably. The inventory referred to above should be able to prevent such situations in the future.

Ultimately, end-consumers will bear the costs through the transmission tariffs or the electricity price. Our careful estimate is that the costs for end-consumers will rise by approx. € 4.00 in the period from 2010 to 2013. On the other hand, more producers will have access to the market, which will tend to reduce the price.

It is technically not possible to introduce congestion management on regional grids. Too much switching occurs on regional grids, while continuity is required for congestion management. Moreover, short-circuit capacity and reactive power management are often determining factors for the maximum number of producers to be connected to regional distribution grids. The congestion management system does not provide a solution for meeting these criteria. Grids with a transmission function are eligible for congestion management, on the other hand.

Yes, the Grid Code, the Metering Code and the System Code will be amended. These Codes contain rules stipulating how grid operators and connected parties are to deal with one another in the context of the production, transmission and consumption of electricity. Bids are needed for congestion management, for example, and the procedures for handling such bids have been laid down in the Codes.

No, congestion management is intended to solve temporary bottlenecks. Ultimately, the regional grids will also need sufficient transmission capacity. Congestion management is a temporary approach and all grid operators are required by law to keep investing in their grids and thus contribute to a permanent solution.