Less network congestion, more energy transition

Sijmen Verveer & Jasper van Hijfte | 28-10-2019

The current Dutch energy trade markets are too limited to enable the full energy transition and are unsuitable for eliminating the growing congestion effects. Together with KPN, ENECO, ETPA and TNO, Innofunding has designed a TSE DEI + pilot project, with which a new transaction platform is being developed for flex operators to record the origin of energy.

Energy transition causes network congestion
In the Netherlands there is the possibility for (sustainable) asset operators to trade their (surplus) energy on the energy trading markets. The capacity that becomes available for flexibility through these assets is growing rapidly with the energy transition, through greater volatility and supply of renewable energy, and through the multiple cycles that flex assets can go through in one day (intra-day). Network operators can no longer keep up with this growth rate.

LABELS for energy
The available information about the renewable energy is limited to the price per kilowatt hour (kWh), time and volume. Information about origin, such as how gray, blue or green the purchased energy is, is not available. The current market places are therefore intrinsically unsuitable for eliminating the congestion effects of the larger flex-offer, partly due to the high (cost) threshold for entry, collaterals, margining and IT of spot markets. Together with KPN, ENECO, ETPA and TNO, Innofunding has designed a DEI + pilot project with which a transaction platform is now being developed for flex operators. Mechanisms are developed that can be used to determine which label the energy has that is loaded into a flex asset and then delivered back.

By adding this information about the energy source, conscious choices can be made with energy sales and network congestion can be reduced by trading energy locally as much as possible.

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This project has been carried out with a subsidy from the Ministry of Economic Affairs, National schemes for EZ subsidies, Topsector Energy carried out by Rijksdienst voor Ondernemend Nederland.