By Paul Mignot
Published on the 31st of January, 2024
What is a CBC (Capacity Limiting Contract)?
In this contract, the connected party voluntarily agrees to reduce its transport capacity demand, contributing to reducing congestion. The contract covers:
- Agreed capacity limitations,
- Compliance checks,
- Provisions for disconnection in case of non-compliance.
The grid operator ensures the contractor adheres to restrictions and offers compensation in return.
Using the grid more efficiently
A CBC aims to maximize existing grid use, potentially delaying or avoiding network investments. It gives grid operators a way to maintain reliability while offering a financial incentive for contractors to manage electricity consumption efficiently.
This approach is crucial in situations where the demand for transmission capacity of the grid exceeds the availability – which leads to congestion.
Alternative Transport Rights: a new opportunity
CBC is one of the new contract forms known as Alternatieve Transportrechten (Alternative Transports Rights). This allows grid operators to use limited grid capacity more efficiently, connecting more customers awaiting for it.
Some examples :
- Fixed CBC
The connected party has reduced transport capacity for a specific time period, for example in the evening in the winter months or during the day in the summer months.
- Dynamic CBC
The capacity limitation is only activated by the grid operator if it expects congestion to occur in the area of the connected party (it is a congestion area). A signal is sent to the connected party that there will be congestion the next day and that the connected party will reduce its capacity. This only concerns the contracted flexible capacity (control capacity). The non-flexible capacity remains available. This communication takes place either via GOPACS or via e-mail.
To process signals from the network operator under a CBC, the connected party must appoint a Congestion Service Provider (CSP).
Reimbursements for your missed generation
The compensation structure in the Capacity Limitation Contract (CBC) for feed-in works as follows:
- Compensation per Non-Input MWh: This is a variable compensation for each MWh that is not input as a result of the agreed capacity restriction. The amount of this compensation is determined on the basis of the EPEX-Spot Day-ahead market price per hour, with a minimum and maximum price limit.
- SDE+/SDE++ compensation: This is compensation for any missed SDE subsidies. The grid operator compensates these subsidies afterwards, based on calculations by the Bureau for the Production of Renewable Energy (PBL) in collaboration with the Netherlands Enterprise Agency (RVO).
- Compensation for Guarantees of Origin (GoOs): This concerns compensation for possible lost income from GoOs. The compensation for this is determined on the basis of the prices proposed in the PBL Final Advice.
How is the Non-Input MWh calculated?
The Non-input MWh is calculated by comparing theoretical hourly input without limitations with the actual input. The contractor provides these calculations in an agreed format.
Reimbursements for a CBC for purchase consist of an availability compensation and a restriction compensation.
The CBC and the Realtime interface
The grid operator can make (or strongly recommend) a Real-time Interface for a CBC contract. The Real-time interface is the system where the grid operator can intervene when there is acute grid congestion.
The combination of CBC and Realtime interface ensures that the grid operator has the certainty that there is sufficient transport capacity for all connected parties. It is also a way for the grid operator to validate whether the connected party adheres to the agreed restrictions.
A CBC is a new form of contract from grid operators that ensures that a connected party reduces its transport demand at certain times. Initially this will be applied for feed-in. Connected parties are reimbursed for their lost income from electricity not fed-in. The CBC provides a cost-neutral option for the affiliate to get out of the queue earlier.