Eneco: How Is Grid Congestion Halting Dutch Construction? – Construction Digital

Report on Dutch Grid Infrastructure Bottlenecks and Implications for Sustainable Development Goals

Economic Stagnation and SDG 8: Decent Work and Economic Growth

The current state of the Netherlands’ electrical grid infrastructure presents a significant obstacle to achieving Sustainable Development Goal 8 (Decent Work and Economic Growth). The economic consequences are substantial, undermining national productivity and business development.

• A 2024 Boston Consulting Group report estimates that grid congestion results in an annual economic loss of up to US$38 billion.
• Approximately 12,000 companies are currently on waiting lists for permission to increase their power consumption, directly halting expansion projects and impeding economic growth.
• This bottleneck directly affects commercial construction and the ability of businesses to scale operations, thus limiting the potential for job creation and sustainable economic progress.

Impediments to SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action)

The grid’s capacity limitations create a direct conflict with the objectives of SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action). The inability to integrate new energy sources and support clean technologies stalls the nation’s energy transition.

• An estimated 8,000 companies, many of which are potential producers of renewable energy, are waiting to feed electricity into the national network.
• At the consumer level, the transition to sustainable energy solutions is hampered, as households are increasingly unable to secure the larger power connections required for heat pumps or electric vehicle charging stations.
• These constraints form a critical barrier to increasing the share of renewable energy in the national energy mix and taking urgent action to combat climate change.

Infrastructure Deficiencies and SDG 9: Industry, Innovation, and Infrastructure

The crisis is fundamentally a failure of infrastructure, highlighting a lack of resilience and investment that contravenes the principles of SDG 9 (Industry, Innovation, and Infrastructure). Expert analysis points to systemic, long-term issues.

1. Professor Damien Ernst of Liège University identifies the root cause as a prolonged period of underinvestment in both transmission and distribution networks.
2. The result is the emergence of widespread bottlenecks throughout the system, which stifles industrial capacity and innovation.
3. Rectifying this infrastructure deficit is projected to be a multi-year process requiring billions of dollars in investment to build the resilient infrastructure necessary for sustainable industrialization.

Impact on SDG 11: Sustainable Cities and Communities

The grid’s limitations extend to the community level, affecting the development of sustainable urban environments as envisioned in SDG 11. The inability for both businesses and residents to adopt cleaner technologies undermines efforts to create inclusive, safe, resilient, and sustainable communities.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 7: Affordable and Clean Energy
   • The article’s central theme is the failure of the energy grid infrastructure to meet demand. It discusses the inability of consumers and businesses to get adequate power connections for needs like heat pumps, electric vehicles, and business expansion, which directly relates to energy access and reliability.
2. SDG 8: Decent Work and Economic Growth
   • The article explicitly states that the “infrastructure bottleneck is creating a major economic drag” and quantifies this impact, noting that “grid congestion is costing the Dutch economy up to US$38bn annually.” This directly connects the infrastructure problem to negative economic consequences.
3. SDG 9: Industry, Innovation and Infrastructure
   • The core problem identified is an “infrastructure bottleneck” due to underinvestment in distribution and transmission networks. The article highlights how this lack of reliable infrastructure hinders commercial construction, business expansion, and the adoption of new technologies, which are all central to SDG 9.
4. SDG 11: Sustainable Cities and Communities
   • The issues described affect both residents and businesses within communities. The inability of consumers to “install a heat pump or charge their electric vehicle at home” hampers the transition to more sustainable living in urban and residential areas.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 7 (Affordable and Clean Energy):
   • Target 7.1: By 2030, ensure universal access to affordable, reliable and modern energy services. The article shows this target is not being met, as thousands of companies are “waiting for permission to use more power” and consumers “cannot get” the bigger power connections they need, indicating a lack of reliable access.
   • Target 7.b: By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all. The statement that the country “haven’t invested enough in their distribution networks in transmission networks” and that it will take “years and billions of dollars to solve this” directly points to the need to meet this target.
2. Under SDG 8 (Decent Work and Economic Growth):
   • Target 8.1: Sustain per capita economic growth. The article’s mention of the grid congestion costing the economy “up to US$38bn annually” is a direct impediment to sustaining economic growth.
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The fact that businesses “want to expand their operations, and they just cannot get extra capacity” shows how the grid failure directly limits economic productivity and the ability to upgrade operations.
3. Under SDG 9 (Industry, Innovation and Infrastructure):
   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure… to support economic development. The article’s entire premise is about the failure of a key piece of infrastructure (the electrical grid), which is described as unreliable and a bottleneck to economic activity.
   • Target 9.4: By 2030, upgrade infrastructure… to make them sustainable. The inability to connect sustainable technologies like heat pumps and electric vehicles, or for companies to feed (presumably renewable) electricity into the network, shows a failure to upgrade infrastructure for sustainability.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Economic Cost of Infrastructure Deficiencies:
   • The article states that “grid congestion is costing the Dutch economy up to US$38bn annually.” This figure serves as a direct indicator of the economic impact of failing to meet infrastructure and energy targets (related to SDG 8 and 9). Progress could be measured by the reduction of this annual cost.
2. Access to Energy Grid Connections:
   • The article provides specific numbers: “8,000 companies are waiting to feed electricity into the network, while 12,000 others are waiting for permission to use more power.” These numbers are direct indicators of the gap in energy access and infrastructure capacity (related to SDG 7 and 9). A reduction in this backlog would indicate progress.
3. Investment in Infrastructure:
   • The quote that it will take “billions of dollars to solve this” implies that the level of investment in grid infrastructure is a key indicator. Tracking the amount of capital invested in upgrading and expanding distribution and transmission networks would measure progress towards Target 7.b and 9.1.

4. Create a table with three columns titled ‘SDGs, Targets and Indicators” to present the findings from analyzing the article.

Source: constructiondigital.com