ACM to explore the opportunities to prioritize sustainable projects
Over the next few months, the Netherlands Authority for Consumers and Markets (ACM) will examine the extent to which system operators, when offering transport capacity and with regard to new connections, are able to give priority to projects that contribute positively to the energy transition. Giving priority, for example on the basis of sustainability criteria, such as reduction of CO2 emissions, is also called prioritization.
ACM expects to publish a draft decision in July 2022 regarding the setting of the maximum deadline for new connections to the distribution grids. While preparing this draft decision, ACM will expressly explore the opportunities for system operators to prioritize connections that contribute to the energy transition. This topic will also be raised in the discussions that ACM will have with system operators and other market participants in the context of the new grid code.
The criteria for setting reasonable deadlines for connections must be objective, reasonable, verifiable, and transparent, and must comply with the European principle of non-discrimination. After all, system operators cannot unjustly differentiate between different types of users. That is why, over the next few months, ACM will further examine in what ways prioritization can be realized in practice.
Examples
If system operators are allowed to prioritize, they will be able to give priority to sustainable injection and sustainable energy consumption. With regard to injection, this could mean giving priority to the connection of wind farms or solar parks. With regard to sustainable consumption, this could, for example, concern charging stations for electric vehicles. System operators could also give priority to battery storage, which can be used to store locally generated renewable energy. This could also reduce the problem of transport scarcity (congestion).
Prioritization with regard to transport capacity and investments
In order to utilize available transport capacity better, system operators can use congestion management more often, according to ACM. In 2022, ACM will publish the new grid code, which will explain how, when, and under what conditions system operators must use congestion management. If the shortage of transport capacity cannot be solved (fully or temporarily) with congestion management, system operators may refuse the transport of electricity. As a follow-up to the new grid code, ACM will also examine the extent to which system operators, when refusing or allocating transport capacity, will be able to give priority on the basis of sustainability criteria.
Congestion management and transport prioritization are temporary measures for the period when system operators upgrade their grids. In regards to such grid upgrades, system operators must make substantial investments over the next few years. The investment plans submitted by system operators to ACM in 2020 revealed that investments lagged behind projected demand for transport capacity. ACM is currently assessing the new investment plans for the period of 2022-2031. As the problem of lagging investments is not expected to get smaller anytime soon, and prioritization may affect a wide range of public interests, ACM finds it important that the Dutch legislature develop a framework on the basis of which system operators are able to prioritize their investments. ACM would like to sit down and discuss this with all parties involved.