The rapid electrification of the Dutch energy system, coupled with the increasing penetration of intermittent renewable generation, is intensifying congestion in local electricity distribution grids. While residential battery storage offers potential for alleviating such congestion, current operational practices by aggregators can inadvertently exacerbate local overloads. In response, Distribution System Operators (DSOs) are considering static restrictions on battery dispatch during peak hours. Although effective in preventing transformer congestion, such measures significantly erode the economic viability of residential batteries and block their deployment even when local capacity is available.
This thesis investigates how aggregators, exemplified by Frank Energie, can deploy residential battery capacity in a manner that mitigates local congestion while minimising revenue loss. Using a design science and systems engineering approach, the research proceeds through five phases: (1) mapping interactions between the day-ahead, imbalance, and congestion markets; (2) analysing institutional and regulatory frameworks; (3) identifying technical constraints and stakeholder objectives; (4) developing feasible dynamic congestion management concepts; and (5) evaluating these options against criteria including effectiveness, fairness, regulatory compatibility, and economic efficiency.
Four solution archetypes were identified: distribution-level locational marginal pricing (DLMP), local flexibility markets, dynamic network tariffs, and dynamic capacity tariffs. Comparative analysis finds that local flexibility markets, where DSOs procure targeted flexibility services from aggregators at specific times and locations, offer the most balanced approach. This mechanism directly addresses congestion events without unnecessary curtailment, provides fair compensation to flexibility providers, and aligns with EU and Dutch policy trends toward market-based congestion management, as exemplified by the GOPACS platform.
The study recommends establishing local flexibility markets for the low-voltage grid, expanding existing platforms to include smaller assets, lowering minimum bid thresholds, and improving near-real-time data sharing between DSOs and aggregators. Such reforms could enable aggregators to integrate local congestion signals into dispatch algorithms, aligning commercial incentives with grid stability needs.
By bridging technical, regulatory, and market design perspectives, this research demonstrates that well-structured local flexibility markets can transform residential batteries from a perceived threat into an essential tool for congestion management supporting both the profitability of aggregators and the resilience of the electricity grid during the ongoing energy transition.