Market Organisation of the Dutch Energy System (MODES)

A broad consortium of Dutch knowledge institutes addresses the question of how the Dutch energy market should be organized in a way that supports the energy transition and that works after the energy transition. The interdisciplinary team develops solutions for the key challenges together with a large group of stakeholders from the Ministry of Economic Affairs and Climate, government agencies, industry, consumers, network companies, energy cooperatives and others. The project addresses the large need for investment by energy companies, government, network companies and consumers, the role of the government in coordinating these investments and ensuring security of supply, how citizens and local initiatives engage with the energy system and the need for large-scale energy production in the North Sea. The design of electricity, natural gas and emerging hydrogen markets is reconsidered, considering the increasingly active role of household consumers in the energy system and the rapid transition to a system dominated by variable renewables. Particular attention is provided to the heat transition, where collective action is needed but remains challenging.

Supporting the design of energy markets, network capacity allocation and tariffication, the project considers four overarching themes that play pivotal roles in the energy transition. The first is the way in which households interact with the energy system, as much is expected from them in terms of investment and operational flexibility. Relatedly, a critical view on the role of data and digitalization provides a balance between the benefits and risks. Third, a fundamental analysis of the many roles of the many government bodies that are active in the energy sector provides consistency in the policy recommendations. Finally, effort is dedicated to co-create the next generation policy assessment models to permanently improve the quality of decision support.