All important terms and definitions within the energy market in one place.
Alternative Transport Rights (ATR) are contract models in which the grid operator grants the user full transport capacity for most of the time. During the remaining time, transport capacity is either restricted according to a pre-agreed schedule (TBTR) or can be restricted on request up to one day in advance (TDTR).
On the electricity grid, balance refers to the continuous equilibrium between total electricity generation and total consumption. This balance is essential for the stability and reliability of the grid. Without it, there can be too much or too little electricity locally, which affects voltage and frequency. Fluctuations in these values can cause wear or even damage to electrical equipment and installations.
A buy order is a bid placed by a market participant on a connected trading platform, with the intent to purchase electricity. Buy orders are part of the redispatch process, in which market participants are invited through a market message to submit buy and sell orders to help resolve intraday congestion situations.
A Capacity Limiting Contract (CBC) is an agreement between a grid operator and an electricity consumer or producer, in which the participant agrees to temporarily reduce electricity consumption or generation in exchange for financial compensation. The goal is to relieve pressure on the grid during periods of congestion.
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A congestion area is generally defined as a region where there is a structural shortage of transport capacity on the electricity grid. In such areas, the grid needs to be expanded. Until that expansion is completed, there is no room for new or larger connections. These areas are listed on the Capacity Map published by the Dutch grid operators.
Congestion management is aimed at preventing and resolving congestion situations. It is applied when actual conditions require deviations from the planned electricity transport schedule (e-programme), resulting in a temporary local transport constraint.
A congestion situation arises when the electricity grid is required to transport more power at a given moment than is technically safe. This means there is a shortage of transport capacity.
A counterbid is part of the redispatch process on the congestion market. A bid and a counterbid together resolve a congestion situation while maintaining balance on the electricity grid.
A Congestion Service Provider (CSP) is a party that offers flexible capacity on behalf of one or more grid users to the grid operator in order to help resolve grid congestion. The CSP plays a central role in the congestion management process.
An EAN code is the unique identification code of a connection to the electricity grid. EAN stands for European Article Number, but in the energy sector it refers to an 18-digit code that uniquely identifies each connection point on the electricity grid. In the Netherlands, such a code usually starts with 871, followed by 15 digits.
On the congestion market, energy trading platforms are digital marketplaces where market participants can trade flexible capacity via redispatch to help resolve grid congestion. These platforms facilitate electricity trading and allow participants to place bids to either increase or decrease their electricity production or consumption, depending on the needs of the electricity grid. This enables them to manage risks or take advantage of market opportunities.
A flexibility bid is a proposal from a Congestion Service Provider (CSP) to temporarily make flexible capacity available via redispatch on the congestion market, in order to help prevent or resolve grid congestion. A flexibility bid is a response to a market announcement and needs to include certain elements.
Flexible capacity is the ability to temporarily adjust electricity consumption or production to the needs of the electricity grid. This means that an installation consumes less power, generates more, or temporarily shuts down at specific times. Flexible capacity helps keep the grid in balance and prevents overloading — also known as grid congestion.
A GDS is a Closed Distribution System. It refers to a private electricity network that distributes power to multiple users within a clearly defined area.
We are consuming and producing more electricity than ever. This is partly due to economic growth and the ongoing transition to sustainable energy. As a result, there is not always enough transport capacity available on the electricity grid in certain parts of the Netherlands. This is known as grid congestion.
The location component refers to the specific geographical designation of a connection point on the electricity grid, identified by its EAN code. This component is essential for determining the physical location where flexible capacity is offered or requested.
A Mandatory Bidding Contract is an agreement between a grid operator and a party with flexible capacity, such as a large electricity consumer or generator. Under this contract, the participant commits to offering flexible capacity via redispatch on the intraday market in the event of a congestion situation. This helps to prevent overloading of the electricity grid.
With a market announcement, CSPs are invited to submit a redispatch flexibility bid on one of the connected trading platforms. These bids are submitted in the form of buy and sell orders, both inside and outside the congestion area.
MLOEA is a Dutch abbreviation for Multiple Suppliers on One Connection. It refers to a setup in which a party purchases electricity from one supplier while delivering electricity back to the grid via another.Read more »
Reactive power refers to the portion of electricity in the grid that establishes magnetic fields in network equipment (such as cables, motors, and transformers), without performing any useful work.
Redispatch is the process by which grid operators ask CSPs to use flexible capacity to resolve a congestion situation that is expected today. Redispatch means shifting electricity production. Today, around 50% of our electricity is generated decentrally from wind and solar. This leads to more frequent congestion situations — temporary, local overloads on the grid. Within congestion management, market participants are incentivised through the electricity market to help resolve these situations via redispatch.
A sell order is a bid placed by a market participant on a connected trading platform, with the intent to sell electricity. Sell orders are part of the redispatch process, in which market participants are invited via a market message to submit buy and sell orders to help resolve intraday congestion situations.
The spread is the difference between the price of a buy order and a sell order that are used via redispatch to help reduce grid congestion. When a grid operator identifies a congestion problem, the market is asked to submit flexible bids. The difference between the bid price and the ask price in these bids constitutes the spread.Read more »
Transport capacity is the amount of electricity that can be transported safely and reliably via the grid operator’s electricity network to and from a connection or area.
