Grid congestion in existing buildings: in whose name is the connection registered?

At first glance, existing buildings appear less affected. After all, a connection is already in place. However, in practice, significant issues can arise at points of transition, such as a change of tenant or a change in use.

The connection and transport agreement

In the context of existing buildings, the key issue is therefore not whether a connection exists, but rather: in whose name the connection and transport agreement (CTA) is registered.

This question is more relevant than ever. In the absence of grid congestion, the identity of the contracting party made little difference. Today, however, a change in the contracting party may trigger a reassessment of available capacity—with all the uncertainty that entails.

That uncertainty has a direct impact on both the value and lettability of real estate. A property lacking sufficient electricity capacity is, for many tenants, simply unattractive—if not entirely unusable.

CTA in the tenant’s name: risks at lease expiry

In many lease arrangements, the CTA is registered in the tenant’s name. As long as the lease remains in place and the tenant utilises the contracted capacity, this typically does not pose any issues. The risk arises at the end of the lease term.

If the lease agreement does not address this, the tenant is likely to terminate the CTA upon vacating the property. After all, the tenant has no interest in maintaining capacity for premises they are leaving. In times of grid congestion, however, such termination can have far-reaching consequences: the released capacity is not necessarily available again to the landlord or a new tenant.

To mitigate this risk, it is essential to include provisions in the lease agreement stipulating that the tenant may not terminate the CTA upon lease expiry, but must instead transfer it—for example, to the landlord or a successor tenant. A contractual penalty can help enforce this obligation.

That said, it should be noted that grid operator terms and conditions may allow transfer to be refused on reasonable grounds. Contractual arrangements therefore do not provide absolute certainty, but they do significantly reduce the risk of losing valuable capacity.

An alternative approach that is increasingly considered in practice is to keep the CTA structurally in the landlord’s name. The idea is that the transport capacity effectively remains “attached” to the property. In the event of tenant turnover, no new application is required—avoiding the risk of limited or unavailable capacity.

In congestion areas, this can be a viable solution, but it is not without risk. Where the landlord becomes the contracting party with the grid operator and energy supplier, they initially bear the costs and must pass these on to the tenant—alongside the associated credit risk.

Use obligation: preventing loss of capacity

Another often overlooked aspect in lease agreements is the actual use of the contracted capacity. Increasingly, a “use it or lose it” principle applies (GOTOK). Capacity that is not sufficiently utilised may be reduced.

It is therefore advisable to include contractual provisions requiring the tenant to actively use the contracted capacity and not to reduce it without consent—potentially backed by a penalty clause.

Grid congestion has transformed what were once administrative or practical considerations into issues of legal and economic significance. For property owners, it is therefore more important than ever to take a critical look at the CTA, the contracting party and the associated lease arrangements in existing buildings. By carefully structuring these aspects in advance, unpleasant surprises at points of transition can be avoided.

Want to know more? Please contact Esther Brand or Marianne Elshof.