Network Constraints: Impact & Solutions for Businesses

Understanding Energy Grid Constraints

Energy grid constraints refer to infrastructure limitations that affect the availability and stability of the energy supply. These limitations can result in difficulties in transmitting electricity, especially during periods of high demand.

The energy crisis of 2022-2023 highlighted these vulnerabilities, leading to a sharp rise in costs despite the interventions of the tariff shields put in place by the Energy Regulatory Commission (CRE). Although these shields reduced electricity and gas bills by an average of 40% for businesses and households, the increase in electricity prices (38% between 2019 and 2022) and the doubling of gas prices in 2022, according to INSEE, underscore the need to address these structural constraints.

A major problem is network saturation, which hinders connections, particularly for renewable energy projects (RE). Enedis, for example, systematically postpones these requests, citing network saturation, often with a horizon of 2028-2029. These refusals, potentially in violation of European law, hinder the development of RE and the energy transition.

Consequences for business supply

Grid constraints have direct consequences for the energy supply of businesses. The instability and increased costs of energy are among the most worrying. Companies face significant price fluctuations, making it difficult to plan and manage their energy expenses.

Delays and refusals to connect to RE sources are another obstacle. Companies wishing to invest in renewable energy sources to reduce their carbon footprint and costs are faced with infrastructure limitations. These difficulties can discourage investment in green energy and slow down the energy transition.

As a result, business competitiveness and investment capacity are affected. High energy costs and uncertainty about supply can limit their ability to innovate, grow and create jobs. At Unisave, we find that the companies most affected are those with significant energy needs and heavy reliance on the electricity grid.

Solutions: Investments and modernization

To overcome grid constraints, massive investments in infrastructure modernization and reinforcement are essential. The CRE stresses the need to invest in strengthening networks. RTE indicates that improving infrastructure reduces grid constraints.

These investments should target several areas:

• Increasing network capacity: To allow the transmission of larger volumes of electricity and reduce the risk of saturation.
• Modernizing equipment: To improve network efficiency and reliability.
• Developing smart grids: To optimize the management of supply and demand in real time.

Planning these investments is a key element. The CRE and RTE play an essential role in defining priorities and coordinating projects. It is crucial that these actors work closely with businesses and local authorities to identify needs and opportunities.

Demand management and flexibility

In addition to infrastructure investments, demand management and the development of flexibility are important levers for reducing grid constraints. Reducing peak consumption is a priority.

Several measures can be implemented:

• Incentives for demand response: Encourage companies to reduce their consumption during peak periods in exchange for financial compensation.
• Development of energy storage: Batteries, pumped hydro energy storage (PHES) and hydrogen can play a key role in energy storage and managing the intermittency of renewable energies.
• Implementation of relevant price signals: To encourage companies to adapt their consumption according to energy availability and grid constraints. EPEX SPOT recommends the use of such signals for better management of flexibility and congestion.

The CRE has also introduced an "injection-withdrawal" tariff component as part of TURPE 7, effective August 1, 2026, to encourage energy storage.

Diversification of energy sources

Diversifying energy sources is essential to reduce dependence on fossil fuels and strengthen security of supply. Faced with a decline in building permits (-26% in 2023), it is necessary to diversify energy sources.

Long-term contracts, such as those signed by ArcelorMittal with EDF for the supply of nuclear electricity, can play an important role. The Exeltium consortium (ArcelorMittal, Air Liquide, Suez) has also signed an electricity supply agreement with EDF. These contracts offer visibility on prices and volumes, which facilitates investment planning.

The development of flexible connections for RE and storage is also crucial. The CRE stresses the importance of developing flexible connections for solar and storage projects. These connections make it easier to integrate intermittent renewable energies into the grid.

New capacity mechanisms

The implementation of capacity mechanisms aims to guarantee a reliable and affordable electricity supply. The CRE has issued a favorable opinion on the new capacity mechanism, which will replace the one in force until 2026.

This mechanism will be centralized and contracted directly by RTE, financed by a distribution tax. It aims to ensure a reliable supply while limiting costs for consumers. This new framework will be implemented from November 2026.

RTE's role is central to this system. RTE is responsible for assessing capacity needs according to several scenarios. This new capacity mechanism will encourage electricity producers to invest in reliable and available means of production, thereby guaranteeing security of supply.

Faced with these complex challenges, it is crucial for companies to understand the issues related to grid constraints and to implement appropriate strategies. At Unisave, we help companies optimize their energy supply and reduce their exposure to risks related to grid constraints. Contact us to learn more about our energy audit and consulting services.