Netherlands Okays Solar, Wind Capacity Limitation Contracts

It is worth noting that the Netherlands Authority for Consumers and Markets- ACM has gone on to give its green light to capacity limitation contracts pertaining to wind as well as solar power projects.

It is well to be noted that the standard contracts make sure that the grid operators as well as producers of sustainable energy can go on to make easier agreements when it comes to congestion management, so that the new wind and solar farms get to have a faster access to the grid, the ACM said, thereby noting that these contracts have been tested by the market as well as the grid operators for two years.

The contracts are a kind of congestion management that enables the electricity grid to be used in a more efficient way. During peak times, grid operators ask solar asset owners to inject less electricity into the grid, and, in return, they go ahead and pay compensation for this form of rush hour avoidance.

But the ACM said that the congestion management contracts happen to be still difficult to execute.

For instance, there is no clear idea of what compensation when it comes to flexibility is reasonable. If the network operators have to make varied agreements with every new operator about the financial conditions of such contracts, this will indeed take a lot of time.

The authority said that it anticipates that this issue can very well be solved if the power producers soon make use of standard contracts with price formulas as well as capped compensation in terms of temporarily shutting down production.

By way of making use of such standard contracts, producers as well as grid operators can go ahead and reach agreements in a much more rapid way.

The contracts can go on to be granted in the Netherlands by way of congestion service providers- CSPs who happen to be acting as intermediaries, in order to make optimal use of the available space across the network.

The existing regulations go ahead and permit the grid operators so as to negotiate agreements with market entities on frequency as well as the cost of assistance in cases of peak reduction. CSPs also go on to serve as independent service providers throughout the network operator as well as connected customers.