First Dutch Flexibility Needs Assessment: Flexibility Is Crucial for a Reliable Electric Power System
Dutch grid operators have prepared their first Flexibility Needs Assessment (FNA). This new European tool identifies how much flexibility the electricity system will need in the future and where this flexibility is required. The scenario on which the FNA is based assumes that Dutch battery capacity will grow from approximately 1.3 GW in 2025 to 8.7 GW in 2030 and nearly 16 GW in 2035. As a result, batteries will make the largest contribution to the growth of available flexibility in the Netherlands. These figures are scenario assumptions, not established targets. The analysis does not anticipate any structural flexibility shortfalls at the national level, provided that the assumed growth in batteries and other flexibility sources is actually realized.
What is the Flexibility Needs Assessment?
The FNA is a new analysis that all European member states are required to conduct every two years in accordance with European regulations. The goal is to provide insight into future demand for non-fossil flexibility and to support governments in setting national targets for this. In the Netherlands, TenneT conducted the analysis in collaboration with the regional grid operators, following a methodology established by the European regulator ACER.
In this regard, the FNA considers four aspects:
- the flexibility requirements of the electricity system as a whole;
- the necessary flexibility in the high-voltage grid;
- the necessary flexibility in regional distribution grids;
- market barriers that could hinder the development of flexibility.
What did the FNA investigate?
The analysis looks ahead to the years 2030 and 2035 and uses the scenario for this purpose Exploration of the Delayed Transition (VVT) from Netbeheer Nederland. In this scenario, electricity demand is growing rapidly due to the electrification of homes, transportation, and industry, while wind and solar power generation is increasing significantly.
The FNA is examining the role that various flexibility options can play, including:
- battery storage;
- demand-side response;
- power-to-gas;
- power-to-heat;
- adjustable power;
- interconnections with neighboring countries.
In addition, the study examined the level of flexibility needed to accommodate forecast errors in supply and demand, the potential scale of future grid congestion problems, and where the most significant bottlenecks occur in the power grid
Results: More flexibility is needed, but there is no national shortage
The FNA shows that the need for flexibility will increase significantly in the coming years. Due to the growth of wind and solar energy, there will be more frequent periods of large electricity surpluses and shortages. As a result, flexibility will be essential to maintaining a balance between supply and demand.
Battery storage plays an important role in meeting this growing demand. Batteries compensate for forecasting errors, absorb excess solar and wind energy, and provide flexibility during periods of high electricity demand. The growth in battery capacity assumed in the scenario is therefore a key prerequisite for the results presented below.
The Electric Power System as a Whole
No structural flexibility shortfalls were identified at the system level. In 2030, approximately 85 TWh of renewable electricity will remain available for use after curtailment, while the target is 81 TWh. For 2035, approximately 95% of potential renewable generation will remain available, which also meets the target set. The study therefore concludes that there appears to be sufficient flexibility available to enable the energy transition.
At the same time, the FNA emphasizes that this conclusion depends on the assumed growth of, among other things, batteries, demand response, Power-to-X, and interconnection capacity. If these flexibility resources are implemented more slowly than assumed in the scenario, additional flexibility needs may arise.
High-Voltage Grid
Although no structural flexibility shortfalls are found at the system level, significant flexibility requirements do arise in the power grid. The greatest need is found in TenneT’s high-voltage grid. South Holland, North Holland, Flevoland, Gelderland, Utrecht, Groningen, Drenthe, and Overijssel stand out in particular.
According to the researchers, these bottlenecks are often location-specific, large-scale, and long-lasting in nature. As a result, they cannot be resolved through flexibility alone. The FNA therefore emphasizes that flexibility and grid expansion complement each other and that both remain necessary.
Regional Networks
Regional distribution grids also demonstrate a need for flexibility, but this need is considerably smaller, more localized, and more time-dependent than in the high-voltage grid. It is precisely for these bottlenecks that the FNA identifies solutions such as battery storage, demand response, and congestion management as suitable tools.
The study also shows that the need for flexibility in regional grids decreases significantly as planned grid expansions are implemented. Many of the bottlenecks that will still be evident in 2030 will be largely resolved by 2035.
Market Barriers
In addition to the technical analysis, the FNA also examined the barriers hindering the development of flexibility. It identified three major challenges:
- Regulations and IT systems for aggregating flexibility are not yet sufficiently developed;
- Investments require sufficient grid capacity and predictable revenue;
- Risks and uncertainties limit the participation of smaller and aggregated flexibility resources in markets.
According to the study, removing these barriers is necessary to ensure that the required flexibility is actually made available. The study explicitly highlights the uncertainties surrounding investments in batteries and other flexibility solutions.
Conclusion: Flexibility and Grid Expansion
The FNA’s main conclusion is that flexibility will become an indispensable part of the future electricity system. At the same time, there is no one-size-fits-all solution for all flexibility challenges. Depending on the location, type of bottleneck, and duration, batteries, demand response, Power-to-X, interconnection, regulating capacity, and grid expansions can all play a role. According to the researchers, therefore, it is not a matter of flexibility or grid expansion, but rather flexibility and grid expansion.
ACM's Initial Response: Investments and Additional Policies Are Needed
In an initial response to the FNA, the Netherlands Authority for Consumers and Markets (ACM) emphasizes that new investments and additional policies are needed to ensure sufficient flexibility in the electricity system over the next ten years. In their scenario, the grid operators count on substantial investments in flexibility, particularly in large batteries. According to the ACM, however, it is uncertain whether market participants will actually achieve the projected growth in storage capacity. The regulator points out that it has already taken measures to encourage flexible grid use, including through tariff incentives and new contract types for large battery systems, but that further efforts are needed.
Response Energy Storage NL
Energy Storage NL joins the ACM in calling for more investment and additional policies to promote flexibility. The FNA confirms that flexibility has become a prerequisite for a reliable, affordable, and sustainable electricity system. For Energy Storage NL, the projected growth in battery capacity underscores that battery storage is evolving from a complementary technology into an essential component of the future energy system.
The projected growth of battery storage in the FNA is consistent with the direction of the updated National Energy System Plan, which assumes 28 GW of battery capacity by 2040. However, the FNA examines the years 2030 and 2035 and therefore does not directly assess the 2040 target. For Energy Storage NL, both underscore the importance of policies that actually enable the further scaling up of battery storage.
Because this growth will not happen on its own. This FNA is based on the “Delayed Transition” scenario. The goal must be to accelerate the energy transition, not to fall even further behind this already delayed scenario. Achieving the projected growth in energy storage is therefore not a given, but a necessary task. The government, grid operators, ACM, and market participants must work together to remove the barriers related to grid capacity, regulations, and the predictability of revenues. This will ensure that the necessary flexibility becomes available in a timely manner and supports the energy transition rather than limiting it.
