Gas Market and Security of Supply Commission debate: ESNL calls for appropriate design choices capacity mechanism
Thursday, June 4, members of Parliament's Climate and Green Growth Committee will debate security of supply. An important topic; after all, TenneT's Security of Supply Monitor (2025) shows that electricity demand cannot always be met in the future, resulting in outages. To guarantee this security of supply, forms of sustainable, flexible electricity are needed, such as batteries. Building on the existing gas power plants is not sufficient here, especially in the context of sustainability goals.
ESNL vision of capacity mechanism
A capacity mechanism is an important means of ensuring security of supply here. It compensates market parties for remaining available at necessary times. This availability compensation makes it financially viable for parties with flexible capacity and clear obligations mean that TenneT is also assured of capacity. A win-win, in other words. However, it is important that this mechanism is appropriately implemented. For example, it should encourage the equal participation of storage and other CO2-free flexibility. On May 6, ESNL offered the capacity mechanism position paper to Jo-Annes de Bat and Stientje van Veldhoven. Our further recommendations for the design choices can be read here.
Specifically for the debate, ESNL also has a one-pager about the mechanism shared with chamber members. Here we advocate the inclusion of the following points:
- long-term contracts that make investments in storage fundable;
- realistic valuation of batteries based on availability during moments of scarcity;
- full participation of storage, demand side response and interconnection;
- and a design that fits within the European path toward a carbon-free electricity system.
Questions for MPs from ESNL
Energy Storage NL gave chamber members a number of questions. For example, a capacity mechanism should follow EU CO2 requirements and avoid fossil lock-in. However, without proper design choices, CO2-free flexibility cannot always participate equally. The question arises how this can be built in. Furthermore, the Belgian model offers a good source of inspiration. The call is to explicitly connect here. In addition, it is not clear how the mechanism will be integrated with congestion measures. Finally, it is interesting to investigate a temporary and additional storage mechanism based on the Italian MACSE example, because of the impressive results this mechanism produced in Italy.
Energy Storage NL looks forward to the Gas Market and Security of Supply debate and advocates making room for questions about the capacity mechanism. After all, flexible capacity, such as batteries, and the capacity mechanism can no longer be seen separately from the Gas Market, Security of Supply and a sustainable energy system.
