Efficiency Versus Permission
Transaction Cost Economics and Regulatory Feasibility of Battery Energy Storage for System Services in the Dutch Electricity System
A.L. Koopal (TU Delft - Technology, Policy and Management)
L.J. de Vries – Mentor (TU Delft - Technology, Policy and Management)
R. van Bergem – Mentor (TU Delft - Technology, Policy and Management)
Ibtihal Abdelmotteleb – Mentor (TenneT TSO B.V.)
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Abstract
The retirement of conventional power plants is removing stability functions that the Dutch electricity system can no longer take for granted. Battery energy storage systems (BESS) are technically capable of filling the gap, but unlike conventional generators, every service must be explicitly contracted, specified, and monitored. Prior research has focused on technical feasibility and economic optimisation, leaving the governance dimension unaddressed. The Energy Act 2026 opened conditional pathways for TenneT to own storage assets directly for the first time, creating an institutional landscape that existing frameworks do not yet address. This raises the central question: what is the efficient governance structure for BESS providing system services in the Dutch electricity system, does the Energy Act 2026 permit it, and where it does not, what is the best feasible alternative?
This thesis applies Williamson's transaction cost economics to derive service-specific governance predictions for six system services, tests those predictions against the Energy Act 2026, and integrates both analyses into the System Services Governance Framework.
Results show that the same physical BESS receives a different governance prediction depending on which service it provides. Balancing can be procured through competitive tendering. Voltage control and congestion management require long-term bilateral contracting. Synthetic inertia, system strength, and black start require direct ownership by TenneT. The Energy Act 2026 permits the efficient form for two services and not by default for three.
The study shows that standardisation decisions are simultaneously governance design decisions. Where product definitions exist, competitive markets are feasible. Where they do not, contracting becomes impossible. Closing the governance gaps requires product standardisation at the European level and published regulatory guidance on exception routes.