What is grid congestion?
Grid congestion occurs when the electricity grid can no longer handle the demand for electricity transport. Simply put: there is more demand for capacity than the grid can handle at that moment. This applies to both the purchase of electricity and the return of generated energy.
For companies, grid congestion is not an abstract network problem, but a direct financial risk. Installations cannot run at full power, generated energy cannot be supplied back and sometimes companies even have to pay to lose electricity.
How does the electricity grid work?
The electricity grid consists of three levels: high voltage, medium voltage and low voltage. High-voltage grids transport large amounts of electricity over long distances. Medium voltage and low voltage then ensure distribution to companies and installations.
Grid congestion occurs as soon as one of these links reaches its maximum capacity. This can be local, for example on an industrial estate, or regional within an entire network area.
Because electricity must always be in balance, the grid cannot handle more power indefinitely. If that limit is reached, the grid operator will intervene and restrictions will arise in transport capacity.
Two forms of grid congestion
In practice, grid congestion occurs in two ways, each with a direct impact on companies and energy installations.
Decrease congestion
Offtake congestion occurs when there is insufficient capacity to purchase additional electricity. Companies that request a new or more powerful connection end up on waiting lists that can extend to several years.
This delays expansions, electrification projects and sustainability plans.
Infeed congestion (generation congestion)
Infeed congestion occurs on the other side of the grid: more electricity is generated than the grid can process. This is especially visible with solar panels and wind installations.
The result is that returns are limited or even completely blocked. In practice, this leads to curtailment, where installations are deliberately switched off, and to immediate loss of yield.
What are the causes of grid congestion?
Grid congestion is caused by a structural mismatch between the rapid growth of electricity demand and generation and the limited capacity of the existing grid. The main causes are:
- Fast growth of sustainable energy: Solar panels and wind farms provide large amounts of power, often simultaneously and at the same locations.
- Increasing electrification: charging stations, heat pumps and electrical processes ensure a sharp increase in electricity consumption.
- Limited grid capacity: the current electricity grid is not designed for this peak load and is increasingly reaching its limits.
- Slow grid expansion: strengthening the grid takes years due to permit processes, spatial restrictions and high investment costs.
Consequences of grid congestion for companies
The impact of grid congestion is immediately visible in the efficiency of energy installations. Companies lose control over when and how they can use or return energy, resulting in financial consequences.
Limited or no return
At peak times the grid cannot handle the energy generated. Solar power or wind energy is then simply wasted, while the business case is based on return supply and yield.
Negative energy prices
When the supply of electricity exceeds demand, prices drop below zero. Companies then pay to supply electricity, which immediately turns a revenue model into a cost item.
Curtailment
Grid operators or systems force installations to temporarily produce less or no energy, also known as curtailment. Assets therefore structurally operate below their maximum capacity, which reduces the return on investment.
Waiting times for connections
New or heavier connections are postponed due to a lack of transport capacity. Projects come to a standstill, while investments and planned expansions cannot be utilized.
What is congestion management?
Congestion management is the active management of electricity supply and demand to prevent overloading of the grid. Grid operators use this as a temporary measure to use the existing network more efficiently, without having to wait immediately for physical grid expansion.
In practice, companies are encouraged, or obliged, to adjust their energy consumption or generation at times when the grid is under pressure. The most important forms of congestion management are:
- Demand response ([demand response](/hoe-werkt-demand-response/)): companies adjust their energy consumption based on grid load or price signals.
- Flexible generation and return: installations deliver less when the grid is full.
- Use of energy storage: surpluses are temporarily stored in batteries instead of immediately returned.
Congestion management helps to temporarily relieve the grid, but requires smart and rapid management of energy assets. Without automation it is practically not feasible for companies to continuously manage this.
Solve grid congestion with smart energy management
Peak shaving
By actively spreading consumption and generation, peaks in grid load are prevented. This not only reduces the risk of congestion, but also prevents the connection capacity from being exceeded.
Smart charging and discharging of batteries
Batteries absorb energy peaks by temporarily storing surpluses. Instead of immediately supplying energy when the grid is full, the energy is used later when there is capacity or a favorable price.
In this way, storage becomes a direct buffer against grid limitations.
Control energy rates (EPEX)
By continuously responding to dynamic market prices, energy is consumed or returned at the most profitable moments. This prevents re-delivery at negative prices and uses price fluctuations as a revenue model.
Without automation, this form of optimization is practically impossible. Read more about the EPEX prize.
Automatic curtailment
At times when return delivery is technically not possible or financially unfavorable, installations are automatically adjusted back. This prevents companies from having to pay to lose electricity.
At the same time, the installation remains protected against inefficient and loss-making behavior.
Smartbox
This is how Smartbox solves grid congestion for end users
The Smartbox is an energy management system (EMS) that automatically controls energy assets based on real-time data, grid load and energy rates. The system acts as the brain of the entire installation and continuously adjusts generation, storage and consumption to the available grid capacity.
Thanks to Smartbox, installations remain operational and profitable, even within the constraints of grid congestion. Why is Smartbox indispensable?
- Automatically controls energy assets based on real-time grid load and market prices.
- Responds to changes within 20 milliseconds and prevents peak loads and congestion.
- Prevents negative returns with smart, automatic curtailment.
- Optimizes battery use through smart charging and discharging based on capacity and price.
- Integrates seamlessly with solar panels, wind turbines, charging infrastructure, battery systems, generators and cooling.
- Provides real-time insight into performance and energy flows via the Smartbox Portal.
Make grid congestion a thing of the past for your customers
As an installer or energy company], do you want to actively help your customers with grid congestion and at the same time unlock new revenue models? We work with a partner structure in which both you and your customer benefit.
Your customers get maximum return from their installation, while you expand your services and share in the benefits of flexibility and energy management. Interested in an introductory meeting? Call or email us, or fill in our contact form.