As the share of renewable energy continues to increase during European energy transitions, several flexibility measures are being implemented. One of these is energy storage via batteries, which offers this possibility. It ensures that an energy system can accelerate the transformation process.
Energy arbitrage makes battery storage economically feasible. This article analyzes the energy arbitrage opportunities offered by battery storage in the Netherlands. Overall, the research shows that optimized battery system planning can create profitable financial opportunities for consumers in the Netherlands.
The Dutch Energy Market
The Netherlands has implemented a fully liberalized energy market where independent parties can participate in electricity trading. It is carefully monitored to ensure that end users always have access to power at an affordable price.
Home Battery Storage Energy Arbitrage
In the Netherlands, a home battery allows you to store the power that you generate from sustainable sources or from the electricity grid. When using a solar system, you can use up to 80% of the generated power with a home battery.
The cost of a home battery depends on several factors. The average costs are €750 per kWh of storage capacity. A house with a 5 kWh battery pays approximately € 3,750 for this. There are some other costs, such as installation. There is currently no subsidy for home battery storage.
In addition to solar panels, a home battery can be charged with mains power. With a fixed or variable contract you can program to charge at the off-peak or night rate. With a dynamic energy contract you get the real benefit. You can set the battery to charge at a low rate and use it when the price of AC power is high.
Energy contract with dynamic Day-Ahead prices per hour
The dynamic energy contract differs from the fixed or variable energy contract because you do not agree to a static rate. Although in theory this means that you will not be faced with any surprises, you will probably pay too much for electricity. In recent years, the dynamic rate has been below the average fixed price about 85 percent of the time.
The spot market determines the energy price for a dynamic contract. These prices change daily. This allows you to pay the same price as energy suppliers. Energy prices are determined on the day ahead market.
The Day Ahead Market (DAM) is the Dutch spot market for electricity. It is an international auction for the price of electricity the next day. It closes at 12 noon every day and the price is set for each hour of the following day.
About 20% of all energy transactions in the Netherlands take place on DAM. The aim is to overcome the expected mismatches resulting from the implementation of electricity traded through the bilateral market. The purchasing price of suppliers may be higher than the price you pay. However, on average this is lower.
Prices are usually highest in the morning, when industries and homes are turning on. Prices are low during the middle of the day and at night due to reduced demand. In 2023, prices on the spot market have sometimes been so low that they have become negative. It means that the energy supplier pays you to consume and store electricity in your battery during those periods.
The rise of Variable Renewable Energy (VRE) has also led to large price fluctuations, a major advantage for those with a dynamic energy contract. The average savings with a dynamic energy contract is 9ct/kWh based on current market trends.
Battery Arbitration Requirements
The main requirement is to have a battery storage system installed in your small business or home. A battery system consists of a battery, an inverter and a battery management system (BMS).
You also need Smart Energy Trading software, which comes in the form of a control box. It taps directly into the energy markets and determines when to buy and sell power from the battery system.
Finally, you need an energy contract, in this case a dynamic energy contract. This allows you to participate in the Dutch energy market and get electricity for the lowest price, while selling it for the highest possible price.
Mains connection requirements
In the Netherlands, netting, or netting, is only available for small consumer connections, the small consumer connection, that consume 3x25A and 3x80A power. A large-user connection, the large-user connection, may not participate in netting. What that means is that if the main fuse is rated at 3x25A, you have a total of 75 x 230 volts, which equates to a maximum power consumption of 17,250 watts.
Although a large-scale consumer connection is less lucrative, it is still profitable. Firstly, you still reduce energy costs by buying it at the lower end of the market and using it during peak times.
Use case
A good usage scenario is during times of high winds and maximum sunshine. During that period, wind farms and solar panels operate at their maximum capacity. The result is more energy than is needed in the grid. One reason for this is that power plants need to use less gas to generate electricity. If supply exceeds demand, the power plants are shut down, which affects the hourly rate.
Hourly rates are usually lowest between noon and 4 p.m. Negative hourly rates are most likely to occur on weekends, when most industries are off, and on holidays and public holidays. To prevent excess energy from flowing into the electricity grid, solar farms and wind turbines are sometimes switched off for a while to prevent a risk to the electricity grid.
You can save a lot of money by aligning consumption with the lowest hourly rates. In some cases you can even make money. However, you still have to pay energy tax and government levels, approximately 16 cents. If your dynamic contract offers 7 cents, you still have to pay 9 cents. So you only really earn money if the energy price is lower than the tax.
Although rare, it does happen. For example, on April 23, 2022, the electricity price from 11 a.m. to 4 p.m. dropped below the tax rate, allowing consumers to make money. At the time, purchasing power between 1 p.m. and 4 p.m. yielded 27 cents per kWh, excluding taxes.
Resume
In summary, battery storage arbitrage has plenty of benefits and few risks. Regardless of your connection type, it is an opportunity to save money and sometimes even make money with the energy supplier.
You can get started today by contacting us. We organize a site visit and determine your options. We will then prepare the paperwork for you to sign. We will then start the installation work, which will be carried out within 30 days of the first site visit.
Contact Hoolia Energy today and enjoy the benefits of dynamic energy contracts.
