IN Brief:
- Energy Storage NL, grid operators, and market participants are replacing the current mandatory bidding agreement with a redispatch contract.
- Proposed changes include greater bidding flexibility and the prospect of faster queue treatment for controllable storage projects.
- The revised contract and practical handbook are intended to be finalised before 1 November.
Energy Storage NL, electricity network operators and other market participants are developing a new redispatch contract intended to make flexible capacity easier to procure for congestion management while reducing restrictions that can weaken the commercial case for storage projects.
The proposed agreement is being developed from the Netherlands’ existing mandatory bidding contract. Three industry working sessions, held on 29 May, 19 June and 7 September, examined practical problems with the current structure and produced proposals for a replacement intended to be finalised before 1 November.
Under the new contract, flexible assets would agree how they participate in redispatch and how much capacity can be offered when a network operator needs to relieve a local constraint. Grid companies would gain greater certainty over the flexibility available to manage network loading, while project operators would work under terms intended to leave more room for viable storage revenues.
Batteries can change rapidly between electricity consumption and generation, but those operating characteristics make inflexible contractual conditions difficult. A developer needs enough freedom to trade energy and ancillary services while retaining the power and energy required to meet commitments made to the network operator.
One proposed change concerns the maximum bid allowed under the current agreement. Dutch network operators are considering removing or increasing that limit, giving storage operators greater scope to reflect the cost and opportunity value of making capacity available for redispatch rather than another electricity-market service.
The work also raises the prospect of faster treatment in grid connection queues for projects that sign the new contract. A controllable battery may be capable of connecting without requiring unrestricted import and export capacity at every hour if its operation can be altered during periods when the local network is constrained.
Energy Storage NL says this could be particularly relevant to standalone and co-located storage projects. Industrial users without storage may find the obligations harder to accommodate because their electricity consumption can be less flexible, while a battery can change its setpoint without interrupting an underlying industrial process.
Similar arrangements are already emerging elsewhere in the Dutch market. TenneT’s capacity-control agreement for the 200MW/800MWh Sequoia battery links operation of the project directly to congestion relief and gives it priority treatment under the Dutch connection framework.
The revised redispatch work also sits alongside a broader shift in national battery policy. The Netherlands has updated its national battery systems action agenda, retaining grid-support storage as part of a programme that also covers manufacturing, safety, testing, circularity and the domestic battery supply chain.
The common constraint is physical network capacity. Batteries can reduce peak loading or move electricity between periods, but they still require substantial connection capacity when charging or discharging. Reserving unrestricted capacity for every storage project can therefore leave flexible assets waiting behind reinforcement even where their operating controls could prevent them using the network at the most constrained times.
A redispatch contract converts some of that controllability into a defined obligation. When congestion occurs, the network operator needs confidence that contracted assets will respond in the required direction and volume, while the battery owner needs compensation sufficient to cover energy costs, lost trading opportunities, cycling and other operational effects.
The control system becomes part of the contractual delivery mechanism. A participating battery must be able to receive instructions, confirm available power, change its charge or discharge setpoint and provide metering showing that the requested response occurred. State of charge has to be managed in advance so that contracted megawatts remain physically available.
Energy Storage NL says the work builds on earlier revisions to the Dutch capacity-management contract undertaken between January and April. The same process brought network operators and market participants together to establish clearer terms for flexible network use, providing a basis for the current redispatch discussions.
A practical handbook will accompany the new contract. That document is intended to explain how the agreement operates in practice, helping project operators translate contractual requirements into bidding procedures, control settings, metering, communications and day-to-day interaction with the network operator.
Contractual flexibility cannot replace transmission and distribution reinforcement where network loading is consistently above equipment limits. Transformers, cables and substations still require additional physical capacity as demand and generation grow, but redispatch can change how much existing capacity must be reserved for users that only need their maximum connection intermittently.
The target is to establish the new agreement before 1 November, after which it would replace the current mandatory bidding contract. Its effectiveness will depend on whether grid operators receive dependable congestion-management capacity without imposing restrictions that prevent battery projects from financing and operating the flexibility on which the arrangement relies.
