Urgent measures announced as Dutch grid creeps to capacity

Government and grid operators in the Netherlands are taking new, urgent measures to ensure sufficient space on the Dutch power grid as demand continues to surge in the compact country.

The measures were announced by the government as a “drastic” course of action and are aimed at accelerating grid expansion, making better use of current space on the grid, shifting demand for electricity outside peak hours, accelerating introduction of grid-connected vehicle charging and ensuring that smart, controllable appliances become the norm.

Stated Dutch Minister for climate and energy policy, Rob Jetten: “Households and companies are becoming more sustainable at a record pace. That is good news, but it also puts enormous pressure on our power grid.

“Despite the significant investments by grid operators and previous measures, the power grid is reaching its limits in more and more places.

“Without intervention, this will have serious consequences for our sustainable ambitions and economy. That is why we are now taking new measures that go off the beaten track to accelerate the expansion of the power grid and create more space.”

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Expansion, flexibility tenders and smart standardisation

Part of the plan includes proactively ensuring that land is available for the construction of the electricity grid and shortening legal procedures and licensing.

For example, states the Dutch Government in a release, this will be done by designating certain extensions of the network as ‘important social interest’ to potentially shorten the procedure by 1.5 years.

To alleviate pressure during peak hours, the Dutch grid operators have already been entering contracts with major consumers to temporarily use less electricity at peak times.

Part of the measures will see grid operators and regulator ACM make these contracts more attractive for companies to participate.

A participation obligation is also being elaborated on, which would see large consumers make an offer to the grid operator at which price they can purchase a certain amount of less electricity during peak times.

The government and the Dutch grid operators also want to proactively start auctions, known as flexibility tenders, from 2024 that will allow companies such as battery operators to offer space on the power grid at strategic locations for a longer period of time during peak hours.

The government is also making €166 million ($175 million) available to stimulate energy hubs, whereby it will be possible for companies to share available space on the network with each other via group contracts. This way, a company can use space on the power grid that another company does not need.

Lastly, in the hopes of ensuring that smart, controllable heat pumps and charging stations become the norm in households, the government has stated it will develop new standards and certifications.

For public charging stations, flexible charging will also become a standard part of contracts with municipalities.

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Two steps forward, bottlenecks back

The measures are announced as Dutch households and companies are becoming more sustainable at a record pace, bringing Dutch climate goals within reach for the first time.

However, the expansion of the electricity grid has not been able to keep up with the rapidly increasing demand for space on the grid.

According to the International Energy Agency’s (IEA’s) latest Electricity Grids and Secure Energy Transitions report, which cites research released by Dutch-German TSO TenneT in 2022, the lack of grid availability in the country has resulted from increasing solar and wind penetration.

The result of this, states the IEA, has been some 3,000 neighbourhoods unable to host new charging stations and regions across the country unable to accept new connection requests.

According to the Dutch grid operators, the increasing demand also comes courtesy of households installing solar panels, heat pumps and EV charging stations, as well as companies switching away from gas.

Specifically, states the operators, the number of heat pumps installed will increase to 170,000 this year, a 60% increase compared to 2022; this number will continue to rise to 300,000 per year.

There are now 500,000 EV charging points in the Netherlands, which will continue to grow to 2 million in 2030 (500 new charging stations per day).

In addition, companies are moving away from natural gas en masse and are asking for a stronger connection to the electricity grid.

There are currently over 105GW of applications for reinforcements or new connections to purchase electricity, marking more than 150 times the capacity of Amsterdam.

According to the operators, this includes applications for large batteries (75GW) and for industry, businesses, data centres, hydrogen factories and new housing developments.

All these developments are adding up much faster than the grid can be expanded, with rising energy prices and increasing climate ambitions only accelerating this.