Cable pooling: a golden opportunity

For many business owners in the Netherlands, the wait for a new electricity connection is a huge drag on growth and innovation. Especially in these times of grid congestion, this can be frustrating. At the same time, it is an established fact that there are many companies with a connection where a large part of the contracted transmission capacity is not being used efficiently.

Fortunately, there is light on the horizon. Thanks to an expansion by the Dutch authorities of the possibilities for cable pooling, up to four parties can now share one existing connection. This allows companies to both save significant costs and get to work much faster.

In this article, I explain exactly what cable pooling entails, the benefits it offers and why proper arrangements are essential.

What is cable pooling?

Cable pooling allows multiple parties to share one connection. Until recently, this was only an option for a combination of solar and wind installations. Now, after the change, consumers (e.g., factories) and storage facilities can also participate.

By making joint use of an existing grid connection, you can avoid waiting for a new connection, share costs and make more efficient use of available infrastructure.

The benefits are clear: less grid load, faster connection, and cost savings. And clever use of each other’s peaks and troughs in consumption and generation even creates room for additional sustainable projects.

Why is this so relevant

Legislative changes (Article 1.4 Energy Act, passed, not yet in effect) and the green light from the ACM have made cable pooling more accessible than ever. The requirement that only producers may participate has been dropped; consumers and storage systems may now participate as well. In addition, the requirement of a minimum connection of 2 megavolt amps has been changed to 100 kilovolt amps. This means that smaller connections can also qualify, as well as many companies that don’t normally think much about energy.

Especially for entrepreneurs in business parks, this presents enormous opportunities. Consider a factory that shares its relatively underutilized connection with a nearby solar farm and battery storage facility. Or a business park where new companies can now establish themselves more quickly because they can share in an existing connection.

GOTORK

For companies with a larger connection than they currently use, it is important not to wait. The Dutch market authority ACM has already issued a decision the Code Decision on Unused Transmission Rights (GOTORK) that allows grid operators to limit contracted transmission capacity.

GOTORK stands for “use in time or lose it”. To date, this new capability is not yet being used at scale, but be aware that it is a real possibility. If you have a larger connection than is currently required for your business at this time, you must act now. Undoubtedly your contracted transmission capacity will eventually be reduced, the congestion problem is only expected to get worse.

Get it right though: tight agreements are crucial

While the opportunities are great, cable pooling also brings challenges. Without clear agreements, things can quickly go wrong. After all, parties together may not exceed the maximum capacity of the connection. This requires:

• clear agreements on who may supply or consume when;
• proper arrangements for cost sharing, maintenance and management;
• smart measurement and control systems to control consumption and production;
• arrangements for tuning and priorities at peak load;
• clear, enforceable contracts defining everyone’s rights and obligations.

Thus, sharing a connection requires good preparation and cooperation between the parties.

How we can help you

At Fruytier Lawyers in Business, boldness and creativity are paramount. Therefore, the cable pooling solution appeals to us. Whether you are an owner of an existing connection looking for suitable partners, or a new party eager to connect: we are happy to help you take advantage of this opportunity.

Together with our technical partners, we can guide you in setting up a cable pooling project. From the initial exploratory consultation, through designing a practical and legally tenable plan, to drafting clear contracts that limit risks and promote cooperation. With the broadening of cable pooling in the new Energy Act (and the anticipation of this by ACM and Grid Operator), more has become possible, probably much more than you think.

Are you considering cable pooling? Come along

Are you curious whether cable pooling also offers opportunities for your company? Or do you already have concrete plans and are looking for legal support to arrange everything properly? Perhaps you are already involved as a supplier in an existing cable pooling arrangement and you are curious how you can increase the benefits even further by adding consumers or a storage facility to the connection. If so, feel free to contact us. We are happy to think along with you and will also put you in contact with our technical partners if required.

With a well-conceived cable pooling project, you not only save money and time, but also contribute to a smarter and more sustainable energy system. So don’t hesitate, and take the first step toward more efficient energy use and new growth opportunities with us

Contact one of our attorneys by email, phone or fill out the contact form for a free initial consultation.