Grid congestion costs society up to €40 billion annually
Consulting firm BCG recently conducted research on the social costs of grid congestion, building on earlier research by Ecorys. BCG calculated that the combination of missed business establishment and expansion, more limited rollout of renewable generation and delayed development of large-scale infrastructure and construction projects adds up to between 10 and 40 billion euros per year.
In addition, the researchers come up with a number of recommendations for dealing with grid congestion more quickly, for which they see an important role for flexible assets. The research firm sees that by making use of energy storage, for example via batteries or heat buffers, business processes and sustainable generation systems can continue to operate without consuming transport capacity. Still, the researchers see that flexible assets are currently still used to a limited extent, but that, certainly with targeted stimulation, this category can grow considerably in the coming years. To this end, BCG makes a number of proposals.
These include calls for measures to encourage behind-the-meter batteries. The potential of batteries behind the meter is now inhibited by uncertainty about the duration of congestion, and thus the period in which the battery must pay for itself. The government, in consultation with grid operators, can remove this uncertainty by making it clear how long congestion will last in an area, or by covering the investment risk through a guarantee, offering long-term contracts for flexibility, or subsidizing batteries behind the meter. Currently, only entrepreneurs who install a battery in combination with their own renewable generation capacity (the EIA subsidy) are eligible for these subsidies. This scheme should be extended to all users with a CBC or non-firm ATO.
Energy Storage NL welcomes the attention to flexible assets around grid congestion. Through the National Grid Congestion Action Program, the industry organization is committed to realizing these- and other points for further incorporation of energy storage.
