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Grid congestion report: 'NL is in giant energy crisis, but solutions are there for the taking'

Gerard Schouw presented a report to the House of Representatives yesterday with solutions to grid congestion. There is no lack of solutions; they are just barely used.

Published on November 27, 2024

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“To get straight to the point, grid congestion is a persistent problem that will drag on for years and has serious consequences for entrepreneurs... Entrepreneurs complain bitterly as they queue for their power requests.”

So begins former Member of Parliament Gerard Schouw's report 'Slim met Stroom voor Groene Groei' (Smart with Power for Green Growth), which he presented yesterday to the Ministry of Climate and Green Growth. In conclusion, complete power grid solutions are not lacking; they are barely used. “Our power grid is not constantly and everywhere full. Grid congestion occurs during peak hours and at certain locations in the country. Those who know how to steer around that avoid and reduce congestion cleverly.”

The report said that being intelligent with power grid capacity is vital to reducing grid congestion, reducing grid expansion costs, and transitioning to the new energy system. Late last year, Schouw was appointed by the then cabinet as an independent administrative booster to address grid congestion from companies. Commissioned by the ministry, he inventoried solutions for the entire power grid. That inventory resulted in eight “more flex” recommendations.

The Netherlands has a 'gigantic electricity crisis'

A recent study by the Boston Consulting Group indicates that grid congestion costs the Netherlands some €10 billion to €40 billion a year. Entrepreneurs diligently look for solutions, but if that fails, the report says, there are only two options: either the company does not invest in electrification or looks for opportunities across the border. The above costs could rise even further if companies choose the latter option. So, Schouw observes that the Netherlands is facing a “gigantic electricity crisis.”

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'More flex'

'More flex'. It sounds like a line from a song by rapper Ronnie Flex. Nothing could be further from the truth: in Schouw's report, the eight concrete recommendations are centered around this concept. Flexible use of the electricity grid is the leading solution. Yes, there is investment in the power grid - €10 billion a year is the plan - but that investment is, for now, delayed. And so, to get out of the electricity crisis, we must fully commit to flexibility, both at the consumption and generation end. According to the report, this requires more decentralized grid control, more storage capacity, and different, flexible agreements between grid managers and their customers. A third observation is that flex is needed to make optimal use of the capacity of the electricity grid. In other words, grid congestion is here to stay.

The good news: solutions abound

According to Schouw, the focus should be on more intelligent use of the current electricity grid. “Grid operators are trying hard, but perhaps 80% of the time and energy is spent on expanding the infrastructure and only 20% on these other solutions. That needs to be more balanced.”

The many grid congestion solutions out there show that it can be done. Energy hubs are an important part of that solution. Schouw recommends setting the goal of making all new business parks energy hubs standard and making new residential areas suitable for energy sharing.

A study by RoyalHaskoningDHV, commissioned by Top Sector Energy and Rijksdienst voor Ondernemerschap (RVO), identified as many as 1,200 promising locations for Energy Hubs in the Netherlands. Schouw wants to move toward 500 energy hubs by 2030. The Ministry of Climate and Green Growth released a guide in October to accelerate the development of energy hubs - it is making €166 million available for this purpose.

The report cites Tholen in Zeeland, where an energy hub went into operation last summer. In it, participating companies combine generation, storage, and smart use of the electricity grid to cope with peaks and troughs. It also mentions Kempen, where companies in Local Energy Hub Hapert—one of three official pilot projects of Enexis—are exchanging power on a local level.

Getting down to business

Schouw emphasizes that companies must take responsibility for their energy consumption. The time when electricity was always available and affordable was over. A more flexible energy system requires entrepreneurs to become energy managers and be more strategic with their energy policies. “Energy costs are rising, there are queues for new applications, there are more energy hubs, and with decentralized energy generation, countless new solutions exist. And yes, it's not just costs. There is a revenue model to it. All this together makes it pay off when business owners become more strategic about their energy policies.

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