The changing energy system
Our society is experiencing great uncertainty. The war in Ukraine is affecting the security of energy supply, causing higher energy prices, rising inflation and possibly a recession. The rising energy prices are prompting our customers to electrify more quickly. In addition to these recent developments, we continue to face other challenges to the energy supply that have been affecting our organisation for some time. One example is digitalisation and the growing need for data centres. Furthermore, the government aims to build 900,000 additional homes by 2030, around 300,000 of which will be in Liander’s service area. There is also growing pressure to become more sustainable. For example, it is government policy to reduce CO2 emissions by 60% by 2030, with a minimum of 55%. In Europe, the Netherlands has the most solar panels per inhabitant.
The energy transition will change our energy system from a central system, in which the generation of energy adapts to demand, to a more decentralised system in which demand adapts flexibly to the energy generated. This shift requires new concepts and solutions for the efficient management of the energy system. The rise in the number of controllable devices can reduce the load on the local grid through their combined responses, but can also cause large, unforeseen overload peaks leading to outages. The network management needs to find a good balance between market stimuli on the one hand and stimuli driven by the required local grid capacity on the other. Flexible transmission capacity, differentiation in tariffs and encouraging local alignment between supply and demand in energy communities and energy hubs are solutions we want to develop as a solid basis for parties to invest in making their energy demand or energy generation flexible and efficient.
Besides the fundamental change in our electricity system, the heat transition will also have a major impact on the required network capacity, certainly during cold winter days. Controllable hybrid heat pumps introduce substantial flexibility into the energy system’s winter peak demand: because they can switch to electricity, they will stabilise the system when there is little demand for electricity or if the power grid becomes overloaded. Although a hybrid heat pump is often viewed as a transitional solution, it could be an excellent final solution in a future flexible and sustainable energy system, certainly once natural gas is replaced by a sustainable gas such as green gas or green hydrogen.
Bottlenecks in the power grid
The energy system has to be modified to give customers the best possible service, but not everything can be done at once. That is why we publish investment plans that stakeholders can comment on. We communicate proactively about bottlenecks in the power grid. An example of this is the congestion maps for supplying electricity and feeding it back into the grid that Liander and other network operators publish periodically. They enable our stakeholders to adjust their plans accordingly. In this regard, Liander recommends always first consulting the network operator about what is possible.
Bottlenecks in the Dutch power grid emerged in more and more places in 2022. The demand for electricity is increasing faster than the rate at which we can increase capacity in the power grid. So our network is already operating at maximum capacity in some areas. More and more businesses and organisations have to wait for access to the power grid or additional power. The maps below show the regions where transmission capacity for energy consumption (on the left) and generation (on the right) by high-volume consumers was scarce at the end of 2022.
Maps showing regional transmission scarcity
Scarcity affecting consumption
Red: no transmission capacity
Orange: congestion management trial ongoing
Yellow: limited transmission capacity
Scarcity affecting generation
In 2022, the congestion in the electricity network started to affect households and smaller companies. The low-voltage grids in residential areas are becoming increasingly congested, while capacity remains the same. Society as a whole is becoming aware of this because feeding back sustainably generated electricity to the grid is no longer always possible, while it is taking longer to expand the grid.
Unfortunately, we are finding it more and more difficult to comply with our customers’ planning schedules. This is something we regret. We are doing everything we can to keep to planning schedules but the reality is that we cannot always do so.
Investments in the energy network
Last year, Alliander once again carried out more work than in previous years. In one year, we laid 2,457 kilometres (2021: 2,271) of electricity cables and gas pipelines (+8%). Investments in 2022 totalled €1,228 million.
In € million
Other1 (mostly Kenter, Alliander AG and warmth)