The energy transition involves more than just the generation, transmission and storage of energy; it is also about balancing and acting. Companies and property owners with self-generation are provided with new options for sharing energy, offering flexibility, or selling surpluses. The Dutch Energy Act is introducing new roles to open up these options on certain conditions.
Companies that self-generate their electricity are often faced with the question of how to deal with surpluses in a business-friendly way: feed surpluses back, share them within a portfolio, or sell them via flexibility services?
The purpose of the Energy Act is to encourage active participation in the energy transition. Households and businesses are increasingly self-generating renewable energy and want to be able to share or sell it. To this end, the Energy Act introduces several (administrative) roles that should facilitate participation in the energy transition. These roles and concepts are mostly derived from EU regulations. What do they look like? We will enlighten you in this article.
The active customer
The active customer is an end customer – the last link in the energy chain – who consumes or stores, sells or shares self-generated or shared electricity, or offers flexibility to the system operator (formerly known as the ‘grid manager’). To qualify as an active customer, these activities cannot constitute your primary commercial activity. A professional solar park is therefore not an active customer. Active customers do not need a licence in order to supply to end users with small connections. The role of active customer, in combination with the concept of aggregating, makes it possible to utilize or sell self-generated electricity without qualifying as a supplier.
Aggregating
Across the electricity grid, supply and demand should always be in complete coordination. Active customers cannot feed electricity back into the public grid of their own accord. A market participant with balancing responsibility must always act as middleman in order to ensure the balance on the electricity grid. Suppliers have to meet various obligations for the protection of end customers. This makes it unattractive for active customers to qualify as suppliers. In order to accommodate active customers and to keep them out of the supplier role, the Energy Act introduces the active role of aggregating. A market participant who aggregates bundles the flexibility or fed-in electricity of several active customers with a view to resale. This allows active customers to sell flexibility or surpluses without assuming balancing responsibility. There are three forms of aggregating:
- Feeding back
- Peer-to-peer trade
- Demand response
Feeding back
This is the feeding back we already know from before the introduction of the Energy Act: an active customer feeds the renewable electricity it does not consume itself back to its supplier. What is new is that an active customer may also choose to feed back to another market participant who aggregates, rather than exclusively to its own supplier.
Peer-to-peer trade
Peer-to-peer trade is the sale of renewable electricity between end users (or between the active customer and the end user). A market participant who facilitates peer-to-peer trade matches the supply of active customers with the demand of end customers, and takes care of the administrative processing. This party will be the point of contact for both the end user and the active customer. With regard to the end customer, the facilitator of peer-to-peer trade will be designated as the supplier. This means that the applicable rules for suppliers will apply to the peer-to-peer trader rather than to the active customer. Peer-to-peer trade may be relevant, for example, to property portfolios or business parks where locally generated electricity is supplied to other users.
Demand response
Demand response is the offering of flexibility by end customers in order to relieve the electricity grid. Flexibility is offered against payment, and may therefore bring in money. A market participant who aggregates sells the flexibility and can adjust the consumption of the end user, for example by temporarily switching on or off electrical appliances (like the electric car).
The energy community
The energy community is the legal embedding of an existent energy cooperative. It is a not-for-profit legal entity that generates renewable energy and supplies this to its members. In this process, the energy community acts as a producer and supplier of energy to its members. Here too, an exception to the licensing requirement applies. It is important that energy cooperatives are familiar with the change of terminology.
Energy sharing
In the run-up to the Energy Act, energy sharing has been a hot topic. Energy sharing is not about the purchase and sale of electricity, but about the consumption by an energy recipient of sustainably generated electricity that an energy giver does not consume itself. Within an energy community, energy sharing is the distribution of jointly generated energy among the members. Energy sharing is an administrative process, in which the electricity fed into the electricity grid of an energy community or active customer is allocated to a recipient customer. Energy givers and energy recipients can agree on their own tariffs for this. The practice of energy sharing too must be implemented under EU law. After the adoption of a law amendment, the Energy Act now contains a clause that allows end customers of the same supplier to share energy among themselves (also known as energy sharing ‘light’). An act to amend the Energy Act is currently being prepared that has to make energy sharing possible between end customers who have different suppliers.
Do you have questions about your role in the energy transition? Our team will be happy to assist you.
