Companies can get a discount if they don’t always buy electricity

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  Rob Koster

  Economic reporter

The operator of the high voltage grid, Tennet, today concluded the first energy contract where a major user cannot always buy or supply electricity. This is about Giga Storage, which will build a large battery in Delfzijl.

The contract states that the company can use the high voltage connection 85 percent of the time. By settling for limited supply security, the company’s transportation costs are cut in half and it is not put on the waiting list.

Around 9,500 companies in the Netherlands are currently on the waiting list for a new or more powerful electricity connection. Another 10,000 companies are waiting to be provided with an electricity connection. The capacity problems on the power grid do not exist throughout the day, but are limited to peak times.

By attracting companies to move with stable electricity supply and demand, Tennet tries to solve the problems of these peak times. The waiting lists for companies to be connected to the grid can then be reduced. As compensation, companies that terminate such a contract pay half as much to use the high-voltage grid. This can save millions of euros every year for large customers.

Do you want to know more about the problems on the power grid? In the video we explain what’s going on:

The contract with Giga Storage also means that Tennet will quickly get an additional buffer for problems on the high-voltage grid. A large battery operator stores excess electricity from the sun and wind and returns it to the grid when there is a shortage.

In a few years, more than 70 percent of the electricity in the Netherlands will come from sun and wind. Energy companies and grid operators have to make sure that the lights don’t go out everywhere when there is no sun or wind.

The Netherlands is used to very high security of supply for electricity. Due to the increase in (sustainable) electricity use, it is becoming very expensive to maintain a supply guarantee of close to 100 percent at peak times. Grid operators would then have to build a sort of ‘six-lane electric highway’ everywhere to prevent ‘rush hour traffic jams’.

The ACM Regulator has made Tennet’s new contract format possible by allowing grid operators to terminate fixed term contracts. Grid operators may also look at the social need for electricity connection. This should prevent schools and hospitals, for example, from being on the waiting list for electricity connections.

The question is whether Tennet’s new contract form will solve the problems on the electricity grid. It is a good solution for the battery operator who is responsible for mobility with constant electricity supply and demand. But for factories that deliver continuous production it will be much more complicated. So far, efforts to get companies to do less at peak times have not been very successful.