Grid congestion and the role of large-scale batteries
Written by Jan Willem Zwang, Energy Trendwatcher
During a roundtable session on March 17, organized by S4 Energy, representatives from policy, finance, grid operators, project development, knowledge institutions, and media discussed the role of large-scale batteries in addressing grid congestion.
The session started with an exploration of perspectives. What immediately stood out was that the same battery is approached in fundamentally different ways by different stakeholders.
From a public perspective (Nationaal Programma Groningen), the focus is on regional prosperity. Batteries are seen as drivers of economic development, employment, and sustainability, and therefore as a means to strengthen broad welfare in the region.
From a financing perspective (Rabobank), batteries are primarily viewed as assets. The focus is on bankability, risk management, and predictable cash flows. Various revenue models were discussed, such as tolling structures, merchant exposure, and contracts based on market reference indices. The central question is whether revenues are sufficiently stable and contractable to enable large-scale financing.
From the perspective of grid operators (Enexis and TenneT), it emerged that batteries can technically make an important contribution to congestion management and system flexibility. It was also noted that the perception of batteries has clearly shifted in recent years. Between 2021 and mid-2024, grid operators often saw batteries as potentially exacerbating congestion. Since mid-2024–2025, this view has changed, and the added value of batteries is now recognized, provided they are operated intelligently and take available grid capacity into account.
At the same time, it is clear that current market and regulatory structures do not always align well with this role, meaning that the system-level value of batteries is not yet fully utilized.
From the developer side (S4 Energy) and market participants, it was emphasized that it is essential for batteries to operate across multiple markets. The business case does not rely on a single revenue stream, but on a combination of markets. It was observed that some markets, such as the trading market, are currently under pressure. As a result, parties are adjusting their strategies and placing greater focus on other markets, such as the balancing market (particularly aFRR). At the same time, attention is shifting toward new markets and products, such as inertia and reactive power, which may provide additional value for batteries in the future.
From the developer perspective (S4 Energy), it was further emphasized that the battery business case depends on a complex combination of market revenues, contract structures, and grid connection. Uncertainty around future revenue streams and limitations caused by grid congestion make project development challenging.
The role of nuclear energy was also discussed. In light of plans for new nuclear power plants, the question was raised what this means for the battery business case. This revealed a tension between, on the one hand, the idea that additional baseload capacity could dampen price volatility and thereby put pressure on battery revenues, and on the other hand, the perspective that system flexibility will remain essential and that batteries will continue to play an important role, even in a system with nuclear energy.
The key takeaway from the discussion is that, while batteries are technically capable of a great deal, the core of the issue lies in how value is organized and distributed within the current market design and regulatory framework. Grid congestion therefore proves to be not only a technical problem, but above all an economic and institutional one.
My overall reflection is that the different perspectives do not yet fully align. It is precisely within these differences that the key challenges for the coming period can be found: how do we ensure that public value, system value, and financial value are better balanced, so that large-scale flexibility can truly be realized? At the same time, I conclude that all participants are convinced of the added value of (large-scale) batteries in mitigating, and potentially even solving, grid congestion.
