Now available in OGEL 4 (2025): Alleviating the Local Congestion Challenge with the Aid of a National Capacity Mechanism: The Case of the Netherlands
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- D.F.M. Kuipers
Published 22 December 2025
Alleviating the Local Congestion Challenge with the Aid of a National Capacity Mechanism: The Case of the Netherlands
by Diederik Frederik Michael Kuipers
Abstract
(22/12/2025) This article investigates the potential for the Netherlands to establish a national capacity mechanism within the scope of the provisions of the Electricity Regulation (EU) 2019/943 under articles 20 to 22, to address local capacity shortages and support the national energy transition. Currently most of the country is facing severe congestion challenges and resource adequacy issues are expected by 2033. The article examines whether the introduction of a capacity mechanism in the country could alleviate local constraints while bolstering the nationwide electricity market.
The article traces the Ministry's evolving stance in the period 2023-2025 from energy only market confidence toward preparing legally robust adequacy instruments should monitoring (SoS Monitor/ERAA) indicate norm exceedance. It evaluates two EU compliant design options. A strategic reserve, which keeps contracted units out of energy and balancing markets yet can still support congestion management and a market wide capacity mechanism, which preserves price signals and allows broader market participation. While capacity mechanisms cannot directly remedy congestion, the article shows how locational deliverability, can align adequacy procurement with real network constraints.
The central conclusion is pragmatic and affirmative. A Dutch capacity mechanism can be designed within the EU framework to address rising resource adequacy risks and support congestion mitigation, provided it is sequenced with grid investments, coordinated with redispatch and local flexibility tools, and explicitly accounts for where capacity is reliably deliverable.
Alleviating the Local Congestion Challenge with the Aid of a National Capacity Mechanism: The Case of the Netherlands is part of the OGEL 4 (2025) Special Issue on "Electricity Market Design" and is available here www.ogel.org/article.asp?key=4193.