The Power Grid Does Not Know What You Know

The Dutch electricity grid is congested. That diagnosis is no longer controversial. What remains poorly understood is why the flexibility that could relieve that congestion is sitting idle behind millions of meters, owned by businesses and households who have neither the information, the incentive, nor the trust to put it to use. The problem is not technology, it is not even capital investments. It is asymmetric information, and the institutions we have built around it are making the mismatch worse.

What the DSO Sees and What the Consumer Knows

Distribution system operators like Liander, Stedin, and Enexis have a detailed picture of the grid at the substation and transformer level. They know which lines are congested, at what hours, and with what frequency. What they do not know is what is happening behind the meter: when a company runs its production machinery, when a logistics hub charges its fleet, when a residential neighborhood’s heat pumps and solar panels create simultaneous peaks that cancel each other out.

The consumer and the business owners know all of this. They are inside the process. A warehouse manager knows the exact shift pattern of his refrigeration units. A housing corporation knows which apartment blocks have batteries installed and which do not. A bakery knows it can shift its oven cycle by two hours without disrupting operations.

Research by Stedin and TenneT into the highly congested Utrecht region illustrates this gap precisely. Grid load scenarios indicated that 250 MW of flexible capacity was needed to bridge the period before physical reinforcements could be in place. After intensive talks with approximately 2,500 individual customers with large connections, only 20 MW of flexibility potential was considered accessible. 250 MW was needed. 20 MW was found. The missing 230 MW did not disappear. It was simply never shared as flex capacity.

Why Data Does Not Flow

The gap between what DSOs need and what consumers provide is not primarily technical. Modern smart meters, EMS platforms, and APIs exist that can transmit consumption profiles, predict peak behavior, and signal grid conditions in near real time. The gap is relational and structural.

Research into the perceptions of parties involved in Dutch grid congestion found that participants were cautious about adopting flexible grid capacity contracts, which would require them to give up some of their fixed rights to grid capacity in exchange for a flexible right and lower grid tariffs. Uncertainty about the availability of grid capacity in the future led to conservative and strategic behavior, which disadvantaged those currently on the waiting list.

This is rational behavior from the individual’s perspective. If a business gives up its contracted capacity today to help the DSO manage congestion, and the DSO cannot guarantee that same capacity will be available when the company installs heat pumps next year, the deal makes no sense. The time horizons do not align.

Flexibility is often presented by DSOs as a temporary solution. While this may be true in a technocratic sense, this focus on temporality neglects the long-term value of flexibility for system operations. Customers need a clear horizon to invest in control systems and propositions to become flexible. If the DSO contract is too short or of low value, they will not bother. The current model asks consumers to share data and surrender capacity on terms that are short, uncertain, and underpriced. Then it expresses surprise when the response is limited.

Quantifying What Better Coordination Would Deliver

The NEP report (Nationaal EMS Programma, March 2026) estimates that without programmatic intervention, the realistically deployable flexibility potential toward 2030 will reach approximately 2.5 to 4.5 GW. With coordinated action on interoperability, data sharing, and governance, that figure rises to 4.5 to 7.0 GW. The difference, 2 to 3 GW of additional system space, is what the information gap costs.

To put that in context: the Netherlands currently has a peak demand of approximately 19 GW, expected to rise to 27 GW by 2030. Grid operators are investing €8 billion annually in physical network expansion. A 2 to 3 GW contribution from unlocked behind-the-meter flexibility does not eliminate the need for new infrastructure, but it directly determines whether that expansion needs to happen at the same pace, or whether critical projects can be phased and prioritized rather than executed simultaneously under impossible lead times.

Academic modeling of the Dutch case by researchers analyzing the interplay of grid tariffs and bilateral contracts found that a seasonal peak tariff is the most effective instrument for mitigating load synchronization issues, particularly at low market prices. Combining grid tariffs with bilateral contracts effectively managed congestion in the summer months, but winter congestion driven by electric vehicles required additional active congestion management, and only if the portfolio of flexibility providers contained sufficient asset diversity.

This is an important finding. Flexibility does not work as a generic commodity. Its value depends on which assets are in the pool, how they are coordinated, and whether the signal they receive corresponds to the actual location of the bottleneck, not just the system-level price.

The Legal Framework Is Ahead of the Practice

The new Dutch Energy Act (Energiewet), which entered into force on 1 January 2026, creates the legal architecture that was missing for a decade. The Act implements the EU Clean Energy Package’s market-design pillars, including dynamic pricing, active customers, aggregators, fair access, and consumer protections, enabling demand-side flexibility and distributed resources to participate at scale. New roles and rights are established for aggregation, balancing responsibilities, consumer rights, and peer-to-peer facilitation, building the legal channels by which flexibility can be contracted, settled, and paid for.

The Energy Act creates more opportunities for participation and innovation for parties in the energy market, including the energy community for the sale and supply of electricity produced by members, and the aggregator as a market participant focused on better matching the supply and demand of electricity.

This matters. For years, the absence of a legal definition of the aggregator role meant that companies providing flexibility services operated in regulatory ambiguity. A business that wanted to pool the flexible capacity of ten tenants in a business park had no standardized contract, no clear liability framework, and no recognized counterpart at the DSO. The Energiewet begins to resolve these gaps.

However, the gap between what the law enables and what the market can execute remains wide. The EU’s Electricity Market Design Directive of 2024 goes further still, introducing a right to energy sharing for all households, SMEs, and public authorities. EU legislation allows active customers with an installed capacity of renewable energy below 10.8 kW for households and 50 kW for apartment complexes to share energy without being bound by the strict rules for energy providers. Dutch implementation of this framework is still pending, and the gap between European ambition and Dutch execution is not a legal technicality. It is 12,000 businesses on a waiting list.

Making Data Sharing Attractive, Not Obligatory

The instinct when facing a coordination failure is to mandate. Require consumers to share consumption data. Require DSOs to publish grid capacity in standardized formats. Require EMS systems to conform to a single protocol. All of these measures have merit, but they address the wrong bottleneck.

The reason data does not flow is not that it is technically impossible or legally forbidden. It is that the value exchange is opaque. The consumer does not know what their flexibility is worth to the DSO. The DSO cannot communicate a credible long-term price signal because its own investment planning is subject to regulatory approval cycles that operate on different timelines than market contracts.

Three things would change this.

1. The first is long-term flexibility contracts with transparent pricing. The value of flexibility is not only found in congestion management. In the long term, the value in energy price arbitrage is expected to become increasingly important. DSO propositions that do not acknowledge this additional value and that try to ringfence flexibility for DSO purposes only are not the most attractive for owners of flexible assets. Baringa Contracts that acknowledge both the DSO value and the market value of a flexible asset, and price them accordingly, will attract investment that short-term emergency contracts will not.
2. The second is standardized data access that returns value to the data owner. The new Energiewet mandates exchange of information between grid operators, energy suppliers and consumers. The practical challenge is that data currently flows predominantly in one direction: from the consumer to the system. A consumer who shares their detailed load profile with a DSO gets, at best, a congestion management fee. They get no visibility into how their data was used, what value it generated, or what the grid looks like in their immediate vicinity. Reversing this, giving consumers real-time access to local grid capacity data in exchange for sharing their own, changes the calculation. Informed prosumers make better decisions about when to charge, shift or curtail without needing to be told.
3. The third is investment in shared infrastructure rather than proprietary solutions. Multiple participants in Dutch grid congestion research expressed concerns about possible injustices related to lock-in with IT companies developing new solutions for managing grid congestion. Many pilot projects are not developed in an open-source manner, limiting access to data and algorithms for actors not participating in these projects. This has led to public funds benefiting private entities that can establish market positions without sharing their innovations. ScienceDirect The pattern described here, public funding flowing into closed systems that entrench incumbent positions, is precisely the dynamic the National EMS Programme identifies as a structural market failure. Open standards and shared validation infrastructure are not idealistic aspirations. They are the economic prerequisite for a competitive, scalable flexibility market.

The Long Game Is the Only Game

The Netherlands needs 6 to 10 GW of orchestrated flexibility by 2030. That cannot be assembled through emergency contracts and one-off pilots. It requires the same logic that governs physical infrastructure investment: long planning horizons, stable regulatory frameworks, and credible long-term price signals.

Basing flexibility tenders from 2024 on long-term flexibility needs as defined by the network operator is needed to incentivize investment into flexible assets such as battery storage. RAP That principle needs to be extended from battery storage to the full range of behind-the-meter assets: heat pumps, EV chargers, industrial processes, building management systems, and residential solar combined with storage.

The energy community framework in the new Energiewet is underused precisely because its current design requires participants to function as licensed energy suppliers. The EU’s energy sharing right, when implemented, lowers that barrier significantly. But implementation takes political will and administrative bandwidth that is currently concentrated on physical grid expansion.

The practical takeaway is this: grid operators, policymakers, and platform developers who want to unlock the information and flexibility that currently sits invisible behind millions of Dutch meters need to start by designing for the long-term interest of the person on the other side of the contract. Not for the short-term relief of the congestion map.

The grid does not know what you know. The question is what it would take for you to share it.