The Dutch electricity grid is experiencing significant congestion due to the increased integration of renewable energy sources and the rising electrification of consumption, leading to prolonged queues for grid connections. In response, the Authority for Consumers and Markets (ACM) has introduced a queue management approach that prioritizes market participants based on societal value, with the highest priority given to Congestion Mitigation Agents (CMAs). CMAs are entities that, by receiving transport capacity, contribute to increasing the overall available transport capacity for other users. This research investigates how Distribution System Operators (DSOs) can negotiate conditions with CMAs to ensure effective congestion mitigation and improved queue management.

Using the Institutional Analysis and Development (IAD) framework, this study analyzes the contract negotiations between DSOs and CMAs, focusing on how these negotiations are shaped by grid congestion conditions, financial considerations, regulatory context, and stakeholder attitudes. The research is informed by interviews with DSO and industry experts, data analysis of transport capacity usage during congestion, and a review of relevant regulations.

Key findings reveal that the physical and material conditions influencing contract negotiations highlight the complexity of exchanging transport capacity and congestion mitigation services. The study identifies two types of CMAs—CMA-f for feed-in congestion and CMA-c for consumption congestion—and examines their distinct negotiation challenges. The research also explores the attributes of stakeholders involved in the negotiations, including financial incentives and experiences with battery technology, which significantly impact negotiation dynamics. The study identifies four key variables in the contract negotiations: the power and duration of CMS provided by CMAs, the precision of availability, the coordination of activation, and the allocation of transport capacity outside congestion peaks. The study concludes that the outcomes of these negotiations are influenced by the types of market parties, supply and demand dynamics, and transport cost structures, with significant implications for fairness, sustainability, and grid stability.

Finally, the study offers policy recommendations to optimize CMA implementation, including reforms to transport cost structures, enhancing transparency, and improving coordination between DSOs and market participants. Future research should further explore the optimization of social welfare through CMA implementation and the coordination between Transmission System Operators (TSOs) and DSOs.