Dutch government acts as power networks near peak overload

Power networks in Utrecht, Gelderland and Flevoland will be overloaded at peak times from 2026 due to the accelerating pace of electrification, the Netherlands' climate and energy policy minister Rob Jetten said in an Oct. 18 letter to parliament.

Households are installing solar panels, heat pumps and electric vehicle charge points while companies are switching away from gas, with grid operators noting an explosion in demand for space on the network across the Netherlands.

"Electricity grids cannot keep up with this pace of energy transition, despite significant investments by network operators of more than Eur5 billion this year," Jetten said.

While annual network investment was due to reach Eur8.00 billion ($8.47 billion) from 2025, this was still not enough to accommodate all growth, Jetten said.

The government would act to secure land for grid expansions while streamlining permit procedures, "for example, by designating certain network extensions as of important social interest, in order to potentially shorten the licensing procedure by 1.5 years," the minister said.

Reducing peak demand between 4 pm and 8 pm via congestion management could also be improved, with regulator ACM making it more attractive for companies to participate in flexible contracts, he said.

Further, an obligation on large consumers to participate in congestion management is being worked on by network operators and the ACM, whereby companies would need to detail which part of their contracted power could be deployed flexibly and which could not.

Companies would then be obliged to bid this flexibility into a market, with the network operator choosing the cheapest turn down or turn up offers, Jetten said.

"To further increase the flexibility offering, I am working with grid operators and market parties on flexibility tenders from 2024," he said.

This would provide longer-term investment signals for assets such as battery storage plants, local production and demand response.

Meanwhile, the government would make Eur166 million available to stimulate energy hubs, allowing companies to coordinate electricity supply and demand locally.

"Next year it will be possible for companies to share the available space on the network with each other via group contracts," the minister said.

Increased use of sustainable electricity is bringing Dutch climate goals within reach for the first time, Jetten said.

The government is committed to reducing the Netherlands' greenhouse gas emissions by 49% by 2030 compared with 1990 levels.

The Dutch economy emitted 3.2% less CO2 in the second quarter of 2023 than in Q2 2022, while GDP fell 0.3% in the same period. The drop in emissions was due to lower natural gas consumption by the electricity sector and households, state statistics body CBS said.