The Dutch electricity grid is facing significant pressure due to increased intermittent renewable energy generation, advancements in electrification and the rise of major electricity users. Transmission capacity has already reached its limit in several regions in the Netherlands. This leads to network congestion, which delays sustainable development in the energy sector and creates an unnecessary rise of electricity prices. Congestion problems exist in multiple EU countries. ACER has proposed the split of several electricity bidding zones in the EU as a solution to mitigate grid congestion. One of these proposed splits is the separation of the electricity bidding zone of the Netherlands into two bidding zones: a northern and a southern bidding zone. This split will separate the northern provinces of Friesland, Groningen, Drenthe and Overijssel from the other provinces in the Netherlands. Splitting large bidding zones into smaller zones could improve market efficiency by providing more accurate price signals. This will theoretically also lead to less congestion in the long term. While research has been conducted on the proposed split of the bidding zone split in Germany, research about a split in the Netherlands and its effects on the Dutch electricity market is lacking. Therefore, this thesis has investigated the following research question: "How will splitting the electricity bidding zone in the Netherlands impact commercial cross-border exchanges and electricity prices in the Day-Ahead market in the Netherlands and its neighboring countries, and what risks does this split cause for energy companies?

To answer this question, a literature review was performed on the bidding zone split of Germany and Austria in 2018, which shows similarities to the proposed Dutch bidding zone split. Furthermore, a model was created with Plexos optimization software to do a nodal analysis of the Netherlands before the split, as well as a scenario analysis of the Netherlands before and after the split. These analyses used a backcast of September 2022 until December 2022. Lastly, the risks for energy companies due to the split were identified. These are the key findings of the research:

1. The neighboring zones next to Germany and Austria suffered from unscheduled flows from Germany. These unscheduled flows form a problem for the Dutch electricity grid as well. The DE-AT split reduced these unscheduled flows but did not achieve all desired effects concerning congestion resolution because of the remaining internal congestion in the German electricity system. The same may be true for the Netherlands and its proposed split.
2. Austria experienced higher electricity prices post-split. Similar consequences are expected of the Netherlands, where the south of the Netherlands will experience higher electricity prices. The north of the Netherlands, which has a relatively low demand and high renewable capacity, will experience reduced prices.
3. The reduction of market liquidity in Austria after the split was only found in long-term contracts, and can be resolved by adapting the terms of these contracts.
4. Nodal prices in the Netherlands in the evaluated period resulted in a distribution of two price groups: high-priced nodes in the west and low-priced nodes in the east of the Netherlands. This difference in nodal prices can be explained by three reasons: the load density in the west, congestion patterns in the high-priced areas, and the geographical positions of fossil power plants.
5. The scenario analysis, which varied inter-zonal commercial transmission capacity between the new Dutch zones and its neighboring zones, found some interesting results. It was observed that an available transmission capacity of 30\% or below creates a significant price difference between the northern and southern NL zone, while above 50\% prices converged. In the scenarios with low available transmission capacity, the northern NL zones reached prices of 0€/MWh. The scenario that is the closest to the predicted after-split situation has price differences between the northern and southern zones. An experiment was executed to investigate the effect of the split on large electricity users, e.g. a large zinc factory with a capacity of 150 MW. In the investigated 4 months, the factory would pay 1.4M€ more for electricity in the southern zone than in the northern zone.
6. Due to the possible price differences in the NL zones, energy companies face risks. It is advised that the current state of their asset portfolio should be assessed based on the location of contracted or owned electricity supply and the location of consumers. By investing in new generation projects in the southern zone, energy generation companies can potentially increase their profits due to the increased electricity prices in the southern zone after the split.

Further research is needed to provide a more exact calculation of the new commercial transmission capacity between the new NL zones and to include the bidding zone split in Germany to capture the full extent of changes in the Dutch bidding zone split. Lastly, a congestion analysis before and after the split can show policymakers and grid operators if congestion has improved and whether a bidding zone split in the Netherlands is worth it.