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.

To reduce CO2 emissions and halt climate change, the largest share of electricity will soon have to be generated by carbon-free sources. Wind- and solar-powered generation is set to become dominant both globally and in the Netherlands. However, integrating additional renewable generation capacity into existing power networks presents a challenge to network operators. Wind and solar generation are characterised by increased variability, causing higher peak loads on power networks. Moreover, the energy transition also increases demand loads through electrification. Combined, these effects are causing power networks in the Netherlands to become congested, limiting the possibilities for integrating more renewable generation capacity into the networks.There are two main ways to reduce congestion: increasing the network capacity or decreasing the network load. The network capacity can be increased by upgrading the grid, which is often expensive and time-consuming. The load on the network can be decreased by curtailment--discarding the excess generation in moments of overload, often resulting in costs for network operators. Another solution would be to shift the transport of excess generation to a moment with sufficient network capacity. Battery systems could provide this function, as they are well-equipped to storing electricity for a short (<24 hours) period.This thesis studies how batteries could provide a solution for integrating additional renewable generation into congested regional networks in the Netherlands. There are different ways to integrate a battery system into the network, and the value the battery system can provide to the network will likely depend on how and where it is integrated. This integration can be defined by two key characteristics: the physical location of the battery's connection to the regional network and the type of renewable generator connected to the battery system and network. The combination of the connection location and the connected renewable generator is called 'system location' in this study, because these combinations of connection and renewable generator are elements that can be found in many power systems.To determine where batteries could provide the most value, the influence of system location on the value a battery system can pose to the regional network operator is researched. The viewpoint of the regional network operator is used for the valuation of the system because the operator is the party that will decide which solution to implement when integrating additional renewable generation. To analyse the influence of system location on the value of the battery system, eight different system locations are studied, with batteries connected to the network either at the site of the renewable generator or at a regional HV/MV substation, combined with four different additional renewable generation scenarios.With assistance from Liander (a DSO), a case study is formulated around substation Waalsprong, which is at risk for congestion in the near future. Two different models are designed to dispatch the battery systems. The first is developed for a battery sized to resolve all projected congestion on the substation. Results demonstrate that to fully solve the projected congestion, large (>25 MWh) volumes of storage capacity are necessary for all system locations. To improve on this large and inefficiently used battery system, a second dispatching model is developed. This model combines battery operations with curtailment and minimises curtailment costs for the network operator over an entire year. The model uses predicted curtailment costs, based on EPEX prices and subsidies. For the case of Waalsprong, the combined battery and curtailment model achieves its goals: curtailment costs are reduced between 65-80\%, depending on the system location. The volume of curtailed electricity is reduced by at least 60\% in every scenario. Additionally, connecting the system at the generator site has resulted in higher battery revenues from charging and discharging. To determine the economic feasibility of the battery systems, a cost-benefit analysis is performed from the perspective of the network operator. Four solutions for integrating additional renewable generation at substation Waalsprong are compared: grid upgrades, curtailment, the large battery solving all congestion and the battery + curtailment system. Results indicate that curtailment is always the least-cost option for Waalsprong, but it should be noted that curtailment is only allowed on a temporary basis under current regulations. Of the other solutions, the battery + curtailment system results in fewer costs for the network operator for all solar generation scenarios. In contrast, for wind or combined wind/solar generation, grid upgrades result in fewer costs. The connection location of the battery system has a limited impact: for the solar scenarios, connecting the system at the generator is slightly advantageous.To put this research into a broader perspective, an analysis was made of stakeholders, regulations and barriers connected to battery systems in the Netherlands. Current regulations ban network operators from owning and operating batteries. Therefore, private parties would have to provide this service to network operators. This shed new light on the influence of system location on battery value: due to high transportation and connection tariffs, private parties operating a battery will always do so at a generator location.Based on the overall research findings, recommendations to the network operator and other stakeholders can be made. First, both the regulator and the network operators should be open to other solutions for congested network areas: this research has shown that for Waalsprong, a battery and curtailment system could result in fewer costs than a network upgrade in some scenarios. Second, a regional tendering system for requesting flexible capacity through long-term contracts should be set up, in which battery operators could participate to deliver flexible capacity to DSOs. Third, DSOs should also consider battery systems as a short-term option, while waiting for network upgrades, as a large share of the Dutch network will need to be upgraded in the coming decades. Finally, the Dutch electricity tariffs are in need of a revision: current tariffs create an unlevel playing field for battery systems. This could be corrected by exempting battery systems from some parts of the transportation tariff.