Global Power Transmission Report

The Dutch high-voltage power transmission network operates at 220kV and 380kV voltage levels with a total line length of 14,518 circuit km (as of end-2023)(Power Technology, 2024). The grid operator, TenneT, is the sole entity for managing the power system. TenneT is also one of the four transmission system operators in the German power system. This might change in the near future, as discussions to divest the German operations have been going on for quite a while. TenneT’s Dutch business, the focus of the present discussion, is increasingly driven by the need for rapid network expansion, in addition to the incremental reinforcement requirements.

Renewable energy, and especially offshore wind energy, plays a central role in the region’s energy transition framework, as laid out in the European Commission’s long-term goals. For TenneT, this means getting the infrastructure ready for wind power projects in the North Sea. The interconnector lines are vital in this context. Its existing link with the UK, for instance, will be bolstered with the ongoing work on the LionLink hybrid interconnector planned for 2030. In the onshore grid segment, the expansion works are largely about augmenting capacities to meet the surge in grid connection requests. For the last 3-4 years, TenneT has been struggling to manage the spike in demand for new connections.

Grid reinforcement is being prioritised as a strategy to enhance capacities with relatively lower lead times. it is replacing 220 kV lines with 380 kV lines where possible. For example, in 2023, it completed a 40 km upgrade of the electricity highway between Eemshaven and Vierverlaten, boosting transport capacity. Additionally, TenneT is implementing the ‘Better Use of Existing 380 kV Programme’ (‘Beter Benutten’), which enhances the capacity of the current 380 kV transmission network by replacing old conductors with new ones and thus avoiding the time-consuming process of building new lines and alleviating congestion more efficiently (TenneT, 2024).

Notably, to address local community and household concerns, the underground transmission lines are being prioritised. This refers to TenneT’s network that operates at 50kV, 110kV and 150kV voltage levels. There is a government scheme to relocate such overhead lines in the populous areas, but with a rider that the local municipal authorities bear 15%-20% of the cost. This policy also states that if a new overhead high-voltage line is built, an existing line must be put underground to ensure the total length of overhead lines doesn’t increase (TenneT, 2022).

The government has a legislated target of 2029 for phasing out coal-based power generation. This is despite the short-term measures of 2022 allowing an extension of some power plants (ABN Amro, 2024). The binding target helps add credibility to the policy goal of a carbon-neutral power sector by 2035. Unlike coal, gas-based power has a different premise. While the trend shows a gradual decline in the contribution, from 50% in 2018 to 37% in 2023, gas-fired power plants are important in the grid as a flexible generation resource. Grid-scale energy storage can potentially fill this gap but is constrained by technological limitations of short duration (2-4 hours). All the same, the direction of transition over the years makes it abundantly clear that renewable energy penetration is poised to displace fossil-based generation resources.

The Dutch power system is also facing a spike in demand. At the sub-transmission or distribution level, the emerging demand sector is for electric mobility. The rise in electric vehicle penetration and the emergence of large-scale battery manufacturing units to cater to vehicular requirements have added to the overall power demand. At higher voltage levels, the data centres constitute the most important segment for the grid operator. Amsterdam is a data centre hub in Europe. The Dutch Data Center Association projects the country’s IT capacity to grow at a CAGR of 9.7% from 2024 to 2029. This growth will increase the total data centre capacity from 863.0MW in 2024 to 1.4GW by 2029, nearly doubling in just five years (Dutch Data Center Association, 2024).

TenneT plans to construct 2,500 km of new grid connections in the Netherlands by 2045, both on land and at sea (TenneT, 2024). The operator’s long-term goals are aligned with the policy objectives in decarbonisation. It is, however, the short to medium-term horizon which attracts attention. The country’s exponential rise in the renewable power project pipeline has outstripped grid capacity growth in several pockets of the network. Added pressure also comes from the need to strengthen the existing grid assets rapidly.

With rising grid demands, grid expansion project delays may have bigger ramifications than in the past. TenneT’s observations, placed in the transmission planning documents of 2024, show that out of the 252 grid projects already in planning stages, 60 were delayed due to both internal and external factors. The grid connection requests, meanwhile, continue to pile up. TenneT’s half-year report of 2024 outlined this challenge – pending connection requests rose from about 45 in 2019 to over 700 in the Netherlands by July 2024. Among other factors, the company must circumvent material and resource constraints, including skilled personnel, construction inputs, or dependencies between projects, which collectively impact the scope and execution (TenneT, 2024).