A special thanks to Marien Boonman Find Marien on Linkedin. for sharing his insights on Energy Hubs, which greatly helped in crafting this article.

In June 2024, the Dutch Minister for Climate and Energy informed the House of Representatives about the Energy Hubs Incentive Program 2024-2030.See the official government letter from the Dutch Ministry of Climate and Energy, outlining the Stimuleringsprogramma Energiehubs (2024-2030). This program is funded by the Dutch government with €166 million over six years,Read the full story in Solar Magazine: Minister Jetten trekt 166 miljoen euro uit voor energiehubs (6 February, 2024). and is set to spark the development of local energy hubs that contribute to preventing and combating grid congestion.

Then, in August 2024, the study from the RoyalHaskoningDHVSee: de Graaf, R., de Jong, M., Koolman, G., Laban, M., Pfeiffer, E., Siebers, V., Roetert Steenbruggen, L., Thijssen, J., & de Wit, C. (2024). De families van Energy Hubs in Nederland: Hoe te karakteriseren en wat is hun betekenis voor de energietransitie? Royal HaskoningDHV. commissioned by Topsector Energy and the RVO sparked attention in the media, and for good reason: it estimated that 1,200 locations could be suitable for energy hubs, and that a massive rollout could create up to 3.2 gigawatts of additional grid capacity on the electricity grid by 2030.

But why are these energy hubs getting so much attention? And how exactly can they help us work around grid congestion and transport capacity scarcity?

In this article, we’re gonna take a closer look to the concept of energy hubs, dive into real-world examples, and discuss their impact on our energy system.

I. What is an energy hub?

1) Defining an energy hub

If you tried to Google “energy hub,” you’d find that there’s no single, universally accepted definition.

The concept surfaced in academic literature around two decades ago,Source: Geidl, M., Koeppel, G., Favre-Perrod, P., Klöckl, B., Andersson, G., & Fröhlich, K. (2007). The Energy Hub – A Powerful Concept for Future Energy Systems.Third Annual Carnegie Mellon Conference on the Electricity Industry. ETH Zurich.

In the paper, Geidl et al. define energy hubs as “a unit where multiple energy carriers can be converted, conditioned, and stored.” but it has recently gained renewed attention due to the growing congestion issues in the Netherlands.To better understand grid challenges, we recommend you to take a look at the following article: “Understanding grid balancing & congestion management”.

As congestion and transport scarcity became a critical concern, various stakeholders – ranging from grid operators to businesses seeking expansion – initiated pilot projects to find a way to grant or get granted extra grid capacity by optimizing energy production, storage and consumption in a local area. These initiatives led to the development of local systems called “energy hubs”, at both industrial and residential levels.

In this article, we recognize that energy hubs can take many forms and are constantly evolving. However, we will only discuss energy hubs as a local level systems, not regional or larger level systemsThe term “energy hub” is also used to designate larger scale projects, such as the North Sea Wind Power Hub which aims to connect offshore wind farms to multiple European countries, or other regional projects., and focus on industrial parksWith participants being large businesses (grid connections >3x80A). rather residential estates.

Therefore, we define an energy hub as follows:

 

EHs offer participants the flexibility to pursue a variety of goals.

In the Netherlands, the most common application today is capacity pooling, where businesses collectively manage their contracts to secure more capacity than they could individually. However, EHs can serve far broader functions, including:

• Reducing reliance on the main electricity grid
• Enhancing flexible capacity through demand-response strategies and shared storage solutions
• Managing supply-demand imbalances via flexible conversion systems, dispatchable production assets, fuel-based generators, and peer-to-peer energy trading within the hub
• Unlocking economic advantages through collective investments in flexible energy assets and participation in energy markets

Each EH can combine these functions in different ways to best serve the unique needs of its participants.

2) Common characteristics of energy hubs

Energy hubs share several key characteristics that are crucial for their effectiveness, sustainability, and ability to provide benefits to the communities they serve:

Local cooperation

• Geographical delimitation: EHs are localized systems, confined to a specific physical area – such as a business park or industrial cluster – where businesses collaborate to optimize energy production and consumption. Their boundaries can be determined by geographical features or grid topology, but all participants must be connected to the same section of the power grid (typically a medium-voltage ring). EHs are particularly relevant in regions struggling with grid congestion, where access to additional capacity is restricted.
• Stakeholder cooperation: EHs bring together diverse local stakeholders, including companies, citizens (e.g., neighborhoods or cooperatives), market participants, municipalities, government bodies, and grid operators. In this setup, citizens and companies are not just energy consumers but also producers and providers of flexibility.

Efficient energy use

• Supply and demand matching: Within EHs, energy supply and demand are matched whenever possible, leading to a reduction in peak loads and optimizing the use of the collective grid connection limit.
• Smart control: EHs employ an end-to-end Energy Management System (EMS) to continuously optimize generation, consumption, and storage, and to ensure that collective capacity limits are never exceeded. More on that below.

Flexibility

• Storage and conversion: EHs often integrate energy storage solutions (such as batteries or heat storage) and conversion technologies (e.g. electrolysis for hydrogen production), providing flexibility in the use of different energy carriers.
• Controllable assets: Assets in energy hubs often have flexible capabilities such as curtailing excess energy generation and shift/reduce loads (called demand-side flexibility) when needed. However, those capabilities are not the most used when there is the possibility to exchange excess production/demand with other members of the hub.

Economic benefits

• More grid capacity: By optimizing loads across multiple parties, more capacity can become available. This can allow companies to carry out economic activities without being hindered by the limited grid capacity.
• Joint investments: Companies can jointly combat grid congestion/transport scarcity and invest together in production facilities and infrastructure, which can result in economies of scale and cost savings.
• Providing energy services: Collaboration can also make market access easier for smaller parties, enabling them to sell balancing or congestion services on markets as a group through an aggregator.

Legal and organizational structure

• Legal entity: EHs must be represented by a legal entity that manages the aggregated usage profile of its participants. This entity also establishes the rules for energy exchange and trade within the hub.
• Contractual arrangements: Standard contract forms are drawn up between the legal entity and the grid operator to regulate the cooperation and distribution of grid capacity, as well as with the solutions providers to deliver the required solutions to enable the EH. More on that below.

3) Why are energy hubs so important?

Energy hubs are becoming important tools to both speed up the Netherlands’ energy transition and address the challenges created by transport scarcity and grid congestion. Here are some key reasons why they can be valuable:

✅ Alleviating grid congestion

The shift from a centralized to a decentralized energy system has led to grid congestion in the Netherlands. The existing grid infrastructure, originally designed for lower electricity demand and supply peaks and a centralized system, cannot accommodate the increasing load. And this has become a nationwide problem: the Netherlands has roughly 3,800 business parks in the Netherlands,Source: Kamphuis, V., Voorhans, W., & van de Weijer, J. (2023). Monitor verduurzaming bedrijventerreinen (TNO Report No. R11604). TNO. and nearly all of them sit in congestion zones.

By consequence, many companies find themselves stuck, unable to secure new or upgraded grid connections. Some face delays, while others are outright blocked from expanding their operations.

However, EHs can offer a solution to this problem by ensuring that participants coordinate the use of their capacity, thereby reducing the local strain on the grid. It can also enable collective investment in batteries – storing surplus energy for later use, during shortages or for smoothing peak demand.

✅ Meeting climate targets

EHs can help the Netherlands achieve their Carbon Neutrality by 2050See: National Climate Agreement (28 June, 2019). goal, as outlined in the climate agreement. They contribute to this goal by:

• Facilitating the integration of diverse renewable energy sources such as solar and wind.
• Providing support for industrial transition by providing access to renewable energy and enabling energy sharing among companies.
• Increase the flexibility and resilience of the energy system.

✅ Providing value to growing companies

While it is currently not possible for some businesses to establish themselves in an area, expand, or implement sustainability plans due to transport scarcity or grid congestion, EHs offer them an opportunity to get the extra capacity they need through collaboration with other businesses. This will allow them to continue and keep growing their business despite their initial connection limitation.

II. How does an energy hub work?

1) How to get started with an EH?

To create a local energy hub in the Netherlands, the following steps can be followed:

📌 Bring stakeholders together

An EH relies entirely on cooperation, so the first step is gathering key participants – business owners, energy users, and other interested parties – to establish a shared vision. Consider the following:

• What is the core problem the EH aims to solve?
• What are the collective ambitions and challenges?
• Can a group-based approach offer benefits that make collaboration worthwhile?
• If so, how will responsibilities be divided among participants?

At this stage, municipalities, provincial governments, and e-advisors often play a crucial role by offering guidance, regulatory insights, and potential subsidies to support the project.

📌 Gain insights
Before moving forward, a detailed assessment is necessary:

• Grid topology: Are all participants “grid neighbors”? The grid operator can confirm whether the businesses are connected to the same grid section.
• Energy profiles: Analyze participants’ current and future energy demand, production, and flexibility using data from metering companies.
• Feasibility check: Does collaboration add tangible value? A formal go/no-go decision should be made based on the insights collected.

📌 Discuss with the grid operator

Based on the previous insights, discuss potential collective grid connection agreements with the grid operator (see next section for further details).

📌 Create a system design

With insights in hand, the next step is to develop a technical and operational blueprint for the EH, focusing on:

• The available transport capacity in the area
• How energy flows will be optimized
• Which assets will be shared or installed (e.g., storage, flexible loads, renewable generation)

📌 Choose an organization form

Unite participants into a legal entitySuch as an energy cooperative, energy B.V., or building management organization and create a Participants Agreement. This agreement set the rules of the hub, such as the division of transport capacity, the mutual settlement of costs, and the rights and responsibilities of each member.

📌 Arrange financing

Ensure financing for the project, taking into account the different phases of development.

📌 Set up an EMS

Implement a smart energy management system to control and optimize the system.

📌 Realization and implementation

Carry out the design and implement the energy hub in practice.

These steps are not necessarily linear and can be revisited iteratively. Close collaboration with all parties involved – including local governments, grid operators, and energy companies – is essential throughout the process.

 

2) Which type of contract applies to EHs?

When creating an energy hub, the physical infrastructure of the grid usually remains unchanged, with each company maintaining its individual connection. However, collective contracts require the formation of a legal entity (mentioned earlier) that represents the group and interacts with the grid operator on behalf of the participants. This entity may also manage grid capacity for all participants, or this responsibility can be delegated to a third party recognized as a Congestion Service Provider (CSP).A Congestion Service Provider (CSP) in the Netherlands acts as an intermediary between large electricity users or producers and grid operators, helping to manage congestion on the electricity grid by adjusting electricity consumption or production in response to grid operator requests.

CSPs participate in congestion management through platforms like GOPACS, offering flexible capacity to maintain grid stability and receiving financial compensation for their services.

Learn more on GOPACS website.

Several new types of contracts are emerging for EHs, with Group Transport Agreements and Collective Capacity Limiting Contracts being the most commonly used. These group contracts are currently in the pilot phase but are expected to become the norm by 2026.

Group Transport Agreement (Group TO)

The Group Transport Agreement (GTO)Learn more about group TO with Netbeheer Nederland’s position paper, (October 2024). is a contract concluded with the Distribution System Operator (DSO) that defines the collective transmission capacity for the group, known as the Group Transmission Volume ( GTVFrom the Dutch “Gecontracteerd Transport Vermogen”. ). The Group TO stipulates the total capacity the group is authorized to use, but gives freedom to the hub in deciding how it will be coordinated and distributed among the participants.

It’s important to note that the GTV limit is actually lower than the combined individual capacities of each participant as it is based on historical profiles (the GTV will represent between 60% and 80%Source: Stedin. (n.d.). Energiehub: lokaal samenwerken aan efficiënt netgebruik. of the total sum of the original individually contracted capacities).

But in exchange, participants are permitted to use the capacity from their neighbors at specific times. This arrangement is particularly beneficial for companies with limited individual capacities, which allows them to exceed their own limits as long as the overall group capacity is not exceeded.

 

Currently under development and expected to be available in 2025,The law currently does not allow a participant in an energy hub to share their ‘transport rights’, this has still to be adjusted in the Grid Code, the set rules for grid operators. the group TO aims to facilitate the collective management of energy resources and capacity among participating companies. However, the preparation for a group TO involves significant coordination among businesses to align on their capacity use.

Collective Capacity Limiting Contract (C-CBC)

Capacity Limiting Contracts (CBCs)Want to learn more about Capacity Limiting Contracts? We recommend you to read: “What is a CBC?“. are already available in many regions and are particularly useful to grid operators for managing congestion.

A CBC is an agreement with the DSO where the connected party commits to reducing their electricity take-off or feed-in during peak times in exchange for a fee, thereby helping to mitigate grid congestion. The fee is calculated based on the party’s missed generation or consumption.

This contract can be applied to an individual party, or in the case of EHs, to a group (referred to as a “Collective CBC”). The hub will then be given a collective capacity limit that can be reduced during peak times.

This limit can be:

• Fixed – The hub needs to reduce transport capacity during certain pre-agreed periods, such as evenings in the winter or daytime in the summer.
• Dynamic – The capacity limitation is only activated by the grid operator if it expects congestion to occur in the area of ​​the connected party. Communication takes place via GOPACS or email, and the party must be represented by a CSP.

A collective CBC becomes particularly beneficial when the EH has numerous flexible assets or processes, such as controllable PV panels, batteries, heat buffers or charging infrastructure. It’s also preferred by producers rather than consumers, as cutting production and estimating the cost of missed generation is easier (due to market price indicators) than reducing consumption (which is usually less flexible) and estimating the associated loss.

Thus, the feasibility of a group CBC depends on the local grid conditions and the flexibility of the consumption patterns among the participating companies. Achieving this requires a thorough understanding of the local grid’s topology and continuous communication with the grid operator to ensure compliance.

3) How are energy hubs controlled and optimized?

The control and prioritization of energy flows within an energy hub are determined by the participants and formalized in a Participant Agreement.

This agreement outlines how the contracted capacity is shared among participants, along other terms such as tariff structure, the use of flexible assets etc.

Merit order

In theory, a merit order is established in the Participant Agreement to prioritize which flexible assets will be activated or curtailed first when the hub needs to reduce its feed-in, and which assets or loads will be prioritized when additional power and/or capacity is available. This merit order can vary depending on the timeframe.

Participants decide how the merit order is structured. It can be:

• Dynamic – Prioritization is based on the highest bidsExample: Company A and B are both willing to curtail their PV output this afternoon for a certain amount of money. The most advantageous bid wins.
• Pre-defined – Prioritization based on other criteria such as which assets are the most “critical for business”, who produced the power, etc. In this case, prices are usually pre-defined.
• A mix of both

Then, a common system called Energy Management System (EMS) aggregates available power together, monitors the collective capacity limit, determines priorities based on the merit order and optimization algorithms, and distributes power and/or capacity among participants. At the end of the month, the system will give data about production and usage of each company, and they will receive a fee for making or using available power and/or capacity. It is usually more transparent than traditional trading systems.

Finally, there is sometimes a possibility to sell an aggregated ‘surplus’ of energy or flexibility on balancing or congestion markets. However, it depends on agreements and whether or not participants are affiliated with the same energy trader.

How does an EMS work in an Energy Hub?

An Energy Management System (EMS) is the digital brain of an EH. It collects data, monitors capacity limits, optimizes energy flows, and controls different assets in real time.

To handle this complexity, an EMS typically consists of two interconnected components:

1. On-site EMS / local controller

The on-site EMSWant to learn more about on-site EMS? We recommend you to read “What is an on-site Energy Management System (EMS)?”. (also called local controller) consists of a gateway box connected directly to the generation units, storage systems, consumption points and metering points. It reads-out data from the different meters, communicates this data to the Energy Hub Platform (also called “hub EMS” or “cloud EMS”), receives back control commands and controls the different units.

It also serves as a fallback in case connectivity to the Energy Hub Platform is lost. In some cases, it can also optimize flows “behind-the-meter”.

III. Case studies

Pannenweg Business Park

One of the first energy hubs in the Netherlands has been operational at Bedrijvenpark PannenwegSee EHP’s Press Release: Marien Boonman. EnergieHandelsPlatform Pannenweg zet volgende stap naar eigen energiehub . (2024, June 11).Groene Economie Limburg.  in Nederweert. Here, 20 companies share electricity amongst themselves, alleviating the strain on the main grid. The companies trade electricity at predetermined prices, with any shortages or surpluses managed through market trading via the OM | Nieuwe Energie self-supply platform.

Each asset and meter is connected to a Teleport (on-site EMS), which provides real-time data on energy usage and production while monitoring the combined grid limit. Continuous production is allowed as long as other hub members consume the electricity or if a battery can store the excess power for future use. As a result, companies are no longer dependent on their individual static limits.

Energy Cooperative Amsterdamse Haven (ECAH)

In early 2024, several companies operating in the Port of Amsterdam subscribed to a Capacity Limitation Contract (CBC) to use available capacity when the grid isn’t full. According to the Port of Amsterdam, this arrangement allowed 29 companies previously on a waiting listSource: Port of Amsterdam. (2024, February 8). Flexibel groepscontract voor elektriciteit faciliteert ambities Amsterdamse havengebied. Port of Amsterdam.  to connect to the electricity grid in the Western port area.

These individual CBCs were then integrated into a Collective CBC, managed by the Energie Coöperatie Amsterdamse Haven (ECAH). According to the grid operator Liander,Source: Port of Amsterdam. (2024, February 8). Flexibel groepscontract voor elektriciteit faciliteert ambities Amsterdamse havengebied. Port of Amsterdam. this is the first flexible group contract established under the new congestion management regulations of the Netherlands Authority for Consumers & Markets.

The creation of this energy hub will allow the participating companies to share responsibilities and coordinate their energy consumption, while the umbrella cooperative ECAH facilitates the collaboration. The hub will be controlled via multiple Teleports on-site, and a Energy Hub PlatformLearn more here: Energy Hub Platform, an initiative by Firan, ENTRNCE and SEP. currently under development.

IV. Conclusion

In conclusion, the development of energy hubs in the Netherlands represents another step towards creating a more resilient, decentralized, and sustainable energy system.

By fostering local cooperation, optimizing energy use, and enhancing flexibility, these hubs can play a role in helping businesses grow despite limitations brought by grid congestion.

As energy hub pilot initiatives emerge, the lessons learned and the evolving legal frameworks will likely pave the way for broader adoption, positioning energy hubs as a new tool to support the Netherlands’ energy transition.