Is the GTO the holy grail for solving grid congestion?

New Energy Coalition has been working on energy hub initiatives for over three years Noord-Holland NoordDuring this period, the arrival of the Group Transport Agreement (GTO) was much anticipated as a possible solution for companies struggling with grid congestion. Now that the GTO has been officially established, we share our insights into the practical applicability of this collective solution in this opinion piece.

In Noord-Holland Noord We are currently involved in nine energy hub initiatives: both within the province's Energy Hubs incentive program and within the development of Europe's first Renewable Energy Valley.[1].

All these initiatives face grid congestion. And in each project, the GTO has been explored at some point as a possible solution. This makes sense: a GTO allows individual transport capacity to be converted into jointly managed capacity, unlocking collaboration within a hub.

[1] A Renewable Energy Valley is a local area where multiple renewable energy sources are integrated within different area types.

What will change about grid congestion with GTO?

Many large consumers on the electricity grid currently have their own transmission agreements with the grid operator, which specify a fixed amount of power (e.g., 100 kW). This power is effectively "reserved" on the electricity grid, regardless of whether it is actually used.

When companies try to collaborate with individual contracts and coordinate their consumption, this doesn't yield much in practice. The freed-up capacity of one company can't automatically be used by another; after all, each connection remains bound by its own contractual limit.

With a GTO, individual "reserves" shift to a single, collective reserve of capacity on the grid. As long as the group remains within this limit, the companies themselves determine how to allocate capacity among themselves. All connected locations are netted. This means that flexibility, such as managing consumption, feed-in, or storage, becomes available within the group to other participants. This unlocks the benefits of collaboration.

This provides important advantages:

• Collaboration becomes effective: if one company consumes less, extra space is immediately created for others.
• Collective investments become possible: The sustainable input of one participant (such as batteries or PV) increases the available capacity for the entire group.
• Increased peak power: At certain times, one company can use significantly more power, which can help solve grid congestion problems.

In short: where individual contracts limit collaboration, a GTO creates the opportunity to optimally utilize joint transport capacity. That's why we see the GTO as a key building block for energy hubs and a powerful route to relieving congestion.

Lessons from practice

The first plans for the GTO were already made in 2022–2023, with a target delivery date of 2024. During the same period, New Energy Coalition Projects are already working on collective solutions for grid congestion on industrial estates. Through the parallel development of legislation and practical case studies, much has been learned about this new solution.

1) No paper reality

In the first collectives we supported, some companies had unused capacity within their own contracts. They wanted to use this capacity for the collective. Initially, this seemed logical, as from the entrepreneur's perspective, the contract value is the determining factor, and thus contributing unused contract value is a solution for grid congestion. However, in the final version of the GTO, this appears to be impossible. The grid operator completely recalculates the group equity based on:

• Collective net historical consumption (kW_Max)[2],
• Business plans that already fit within the individual capacity of participants.

This means that unused individual contract space that isn't used as planned isn't included in the collective capacity and is therefore lost. In practice, this means that promising collectives, aimed at a GTO, must be restructured, and that "freeing up" group capacity must primarily be sought through flexibility and complementary (future) energy profiles.

2) No quick fix

The concept of an "energy hub" is much discussed and sometimes seen as the solution to grid congestion and (all) other energy transition problems. Businesses and government officials often believe that participating in a hub, organized through a GTO (Generalized Tolerance for Energy Consumption), is the simplest and ultimate route to increasing grid capacity. In practice, however, this proves otherwise: collective solutions are almost always more complex than individual behind-the-meter measures, whenever possible.

That's why we now first thoroughly investigate which individual measures have already been taken and, if insufficient steps are taken, we refer them to other parties for support. Moreover, we inform entrepreneurs from the outset that setting up a collective typically takes three years and costs more than €200.000.[3]This honesty up front prevents disappointment and helps create realistic expectations.

3) Mutual trust takes time

Entrepreneurs know their “net neighbors”[4] Often not. You don't engage in intensive collaboration with people you don't know. Especially not when responsibilities, costs, and risks need to be shared. And these are certainly present in a joint venture. In our experience, every collective solution begins with building trust and developing a shared vision. Without that foundation, any form of joint management or joint investment will not succeed.

4) Start small to grow big

Collective solutions are complex, and collaboration between entrepreneurs requires simplicity in the initial steps. Fifteen participants won't get a contract signed; five determined entrepreneurs, already experiencing problems with grid congestion, will. Other parties can then be added one by one.

Starting with a small, committed group of entrepreneurs who see the value of innovation and actively experience bottlenecks creates the strongest foundation for growth. This advantage should not be underestimated.

[2] With possible corrections
[3] Estimate based on own projects
[4] Connections that can work together based on infrastructure

Conclusion of the arrival of a group transport agreement

The arrival of the GTO marks an important step in the transition to a more flexible, smarter, and more collaborative energy system. However, the GTO is not a panacea. It requires a different way of thinking, long-term collaboration, trust between entrepreneurs, and a realistic approach that starts with small, concrete steps. It's also important to note that not every energy hub needs a GTO. Solutions to grid congestion remain customized.

What we see in North Holland is that collective action works. But only when companies are willing to take joint responsibility for their energy supply. The GTO offers a valuable tool for this. New Energy Coalition We continue to work with entrepreneurs, grid operators, and governments to seize this opportunity and jointly build the energy system of the future.