Social impact of timely investments in the Dutch high-voltage grid

The electricity grid in the Netherlands is under increasing pressure. This is because the demand for electricity in many places exceeds the capacity the grid can handle. Ecorys was commissioned by high-voltage grid operator TenneT to calculate the social value of timely investments in the electricity grid.

Background

The Netherlands faces the ambitious challenge of meeting the climate targets (of 2030 and 2050) and transitioning to a sustainable energy system. To make this possible, the demand for energy from renewable sources is increasing. However, this growing demand leads to a significant increase in the load on the power grid.

To ensure a smooth energy transition and avoid problems in the electricity grid, it is important to invest in grid capacity in time. For instance, if companies do not get access to sufficient grid capacity in time, this will inhibit both economic growth and the sustainability of the Netherlands.

Key findings

Using queue data from Tennet (companies waiting for a connection) and different investment schedules (pace of grid investments), Ecorys calculated the social value of timely grid investments. Here, we looked at the value at a high pace of investment compared to a low pace of investment. A high pace of investment means that the queue is closing and fewer and fewer companies have to wait for a grid connection. A low pace implies that the queue increases and more and more companies have to wait.

Faster implementation of grid reinforcements can be estimated to bring an average annual value of between €8 billion and €30 billion to society. A faster pace also leads to savings resulting from avoiding lost economic added value and lost sustainability benefits. Consider companies that cannot electrify and have to use fossil energy carriers for longer as a result).

To maximise the social welfare of the Netherlands, it is therefore essential to maintain a high pace in realising the necessary grid expansions.

Want to know more? Then read our full report here.