Network Operators' Investment Plans: Energy Storage Still Not Sufficiently Recognized as a Structural Component of the Energy System

Every two years, the grid operators publish their investment plans (IPs). In these plans, they share forecasts regarding the growth in electricity demand and the development of supply through generation from sources such as solar and wind. The differences between supply and demand prompt investments in the grid, often in the form of grid reinforcement or contracting for smart flexibility with storage in congestion areas. The ACM assesses whether the investment plans and decisions made by the grid operators for the next 15 years are reasonable.

In June, stakeholders were given the opportunity to comment on how the ACM assesses IPs. ESNL took advantage of this consultation. First and foremost, Energy Storage NL is pleased that the ACM is carefully reviewing the grid operators’ plans. However, there is room for improvement in the assessment process. Our primary concerns focus on two fundamental shortcomings in the proposed assessment framework: (A) the lack of government policy as a guideline in Step 1, and (B) the positioning of flexibility and storage as a standalone solution rather than a structural component of the energy system.

Government policy is missing as a lower bound in the scenario analysis

The current assessment evaluates whether the scenarios are internally consistent, reproducible, and reasonable, but does not assess whether they are in line with established government policy. This is problematic because grid operators’ scenarios have previously underestimated transmission demand.
Energy Storage NL therefore notes the absence of an assessment of investment plans and scenarios against national policy goals. Government policy should serve as a minimum standard, with grid operators translating these goals into regional implementation plans. In that light, step 3.1.1 should primarily focus on assessing the national targets.

Flexibility and storage are unfairly treated as an afterthought

Under the current framework, flexibility (including storage) is not addressed until step 8, as a stopgap measure when investments cannot be realized in a timely manner. This fails to recognize the structural role that flexibility and storage can and must play in the energy system. Energy Storage NL advocates that flexibility and storage be fully incorporated into earlier steps of the assessment framework (steps 4, 5, and 6), both as alternatives to and as supplements for grid investments. In line with the Flexibility Needs Assessment, which each member state is required to prepare, Grid operators should work toward meeting a national flexibility requirement and align their investment plans accordingly.

Furthermore, there is currently a lack of clear feedback: it is not clear how grid operators assess whether the flexibility measures implemented (for example, through contracts) are sufficient, and what additional steps are taken if this is not the case. This should be an explicit part of the investment plans.

Storage is systematically disregarded

In practice, storage by grid operators is often assumed to be ‘scarcity-neutral’ and is therefore not included in regional congestion analyses. This effectively disregards the potential of storage to alleviate grid congestion.
The frequently cited concern that storage could exacerbate peaks will be addressed through existing contract types (such as CSC and BPC). When storage is factored in along with these instruments, the positive contribution can be leveraged while keeping the risks under control.

Insufficient attention to system services and the decision-making framework

The ACM is right to ask for clarification on when system services (such as inertia) are procured on the market versus provided in-house. Storage can provide these services (for example, grid-forming and inertia). According to the TenneT's calculation method For example, in 2035, 3 to 7 GW of BESS capacity will be needed if the entire interconnection requirement (35 GW) is met with BESS. Energy Storage NL recommends that grid operators routinely assess whether purchasing from market participants is more cost-effective than making their own investments.

Storage as a System Solution

The ACM notes underinvestment and a lack of timely implementation across the sector. Storage can be rolled out more quickly than grid reinforcement, but at present, there is no quantification of what portion of this shortfall can be bridged by this measure. We ask the ACM to require grid operators to explicitly analyze this contribution.

Storage is a robust ‘no-regret’ measure that adds value across all scenarios and helps limit both over- and underinvestment. The ACM itself acknowledges that grid reinforcement is not necessarily the cheapest solution. By explicitly anchoring government policy as a lower bound in Step 1 and structurally incorporating flexibility and storage into the assessment in Steps 4–6, the assessment framework can better contribute to an energy system that can be realized both in a timely and affordable manner.