The growing demand for electricity, electrification, and the accelerated shift to renewable energy sources worldwide require a more flexible system. Power grids play a crucial role in connecting new energy sources and consumers, transmitting electricity, and balancing supply and demand. However, grid congestion significantly slows down the energy transition.
The Netherlands serves as an example of a country where grid congestion has become a major issue. The International Energy Agency (IEA) presented a detailed analysis of the challenges this country is facing in its report, as well as ways in which grid congestion can be addressed globally. Namely, the Netherlands is experiencing serious grid congestion after increasing its solar energy capacity fivefold between 2018 and 2023, while grid expansion failed to keep up with this trend. By early 2025, around 10,000 large users and 7,500 projects were waiting to be connected to the grid. This situation has slowed down important initiatives and increased costs for consumers.
Similar situations have been recorded in other countries, such as Germany, where the costs of managing grid congestion more than tripled between 2020 and 2022.
Addressing grid congestion is a priority for the Dutch government, which introduced a National Action Program in December 2022. The program focuses on faster grid expansion, better use of existing capacity through smart solutions, and increasing transparency.
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How to Solve Grid Congestion
In its report, the IEA emphasizes the importance of a proactive approach to solving grid congestion, highlighting several key strategies to use existing grid capacity more efficiently.
One of the recommendations is to plan grid expansion in advance, which implies investing in infrastructure aligned with energy policies, as well as legal changes that encourage investments in the grid. Another important step is increasing transparency in grid capacity, which helps identify bottlenecks and ensures timely access for new users. This information can also support the placement of infrastructure such as electric vehicle chargers in locations where solar energy is already present, thereby reducing the need for additional electricity transmission.
The report also mentions technologies such as replacing old wires on existing lines, increasing voltage in the network, and monitoring current flow through lines, which enables better electricity transmission without the need to build new lines. Utilizing the flexibility of distributed energy resources—such as solar panels, batteries, and electric vehicles—is also essential for reducing the load on the grid.
Legal and regulatory frameworks play a crucial role in this strategy. In the Netherlands, for instance, the regulator ACM encourages the system operator to use the existing grid more efficiently. In other countries, such as Lithuania, hybrid energy facilities have been introduced, combining different renewable energy sources (RES), which enables more effective utilization. For example, when one energy source is not available, another can take over.
The IEA concludes that solving this issue requires a proactive approach that includes technologies, investments, transparency, and innovative regulatory practices to ensure that grids are ready to support the energy transition.
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