The Netherlands is at risk of falling behind in important digital innovations, such as artificial intelligence, as power grid congestion reaches critical level across the country.
By Kim Loohuis,
Published on: 20 Jan 2025 at 14:45
Recent research Schneider Electric warns datacentre electricity consumption could more than double by 2026, reaching 1,000 terawatt hours.
This surge in demand for power comes at a challenging time. The last Dutch provinces that still have grid capacity available – South Holland, and North Holland – have declared that they no longer have room to grow. This gridlock threatens digital operations and future innovation, especially in the development of artificial intelligence (AI).
“We are seeing huge waiting lists for electricity connections, exactly during a time when we need to switch to renewable energy and increase digitalisation,” said Stijn Grove , managing Director of the Dutch Data Center Association (19659013) (DDA) . “When the Dutch government announced plans to build an AI factory, they were probably looking at very small facilities because larger operations cannot be placed anywhere right now.”
The Dutch datacenter sector isn’t sitting still. The DDA There are talks in progress With the Ministry and Relevant Identifying and addressing these challenges is innovative approache s . “We’ve calculated the possibilities when we implement smarter ways to use power,” he said. “For example, datacentres are currently operated behind two transformers to ensure redundancy. However, we could function with only one because we have emergency power systems installed.”
Several datacentres have already implemented direct connections to high voltage networks and built their own electrical substations. They completed these projects five to ten years faster than traditional grid operators. The sector is also exploring the integration with other energy intensive users to create smart power sharing systems. Grove said that by implementing these solutions we could potentially free 1 gigawatt of power and possibly even more. “Enough to run millions of homes.”
North Holland’s datacentre strategy acknowledges grid solutions’ role, but he said that concrete actions are necessary to implement the strategy. While the province’s strategy is well-considered it highlights the gap between infrastructure reality and policy ambitions.
The Schneider Electric research outlines 4 possible scenarios for AI related power consumption through 2035. The most sustainable path requires significant infrastructure improvements and coordinated plans – elements that are currently lacking in the Netherlands approach.
This planning shortfall is especially concerning, given the global acceleration in AI development. Grove said that the US just announced 200-fold larger initiatives while we are setting up a small AI facility. “We can’t be competitive at that scale.”
The implications go beyond the datacentre industry. He said that the government has ambitious plans for solving healthcare challenges through innovation. These include reducing administrative burdens, and addressing staff shortages by digitisation. “But if the means are not available to implement these digital options, it is very difficult to achieve.” Every organisation, whether it’s a hospital, a large company or governmental agency, will have problems because there is no room for growth.
Innovation at risk
This power crisis comes at a bad time for the Netherlands, which is trying to maintain its status as a digital leader of Europe. The historical role of the Netherlands as a digital innovation hub and early internet adopter is now in danger. This position, which was built over the last two decades, was crucial for both digital sovereignty and economic growth.
Grove said, “We don’t host every datacenter – we don’t have large Bitcoin mining or social media operations here.” “Most hyperscalers have spread out across Europe. We focus on services with added value that support innovation and digitalization. In this time of increasing global instability, we could lose even these strategi c capabilities. International organisations have already stated that future growth will not occur in Amsterdam or the Netherlands. They are looking elsewhere as we cannot provide the necessary power.
Power constraints are occurring at a time when AI development is becoming more important for maintaining economic competition. Schneider Electric’s research suggests that AI workloads may drive a 160% rise in datacentre energy demand by 2030. This could lead to a jump from 1-2% to 3-4% of total power consumption by the end of the decade. This growth is a reflection of the exponential growth in AI applications across all industries, from manufacturing and healthcare to financial services and scientific researchers.
The Dutch Ministry for Economic Affairs has announced plans to form a group of representatives from the provinces, ministries and industries to tackle these critical infrastructure issues. The fragmented nature complicates the search for solutions. “Knowledge about our sector is quite limited,” said Grove. “We must actively communicate our role and possible solutions.”
The datacentre industry advocates for demonstration projects to show how digital infrastructure can help solve grid congestion, rather than just contributing to it. He envisioned a groundbreaking project that would create an integrated campus-style environment that would integrate multiple datacentres and research facilities with educational institutions.
Theunderscores the urgency of the situation. Draghi report On competitiveness with China, the US and Europe, the Netherlands and Europe are at risk of falling behind in terms of digital infrastructure. Grove stressed that the country could not afford to remain inactive for the next ten years, and pointed out the geopolitical consequences of inaction.
By: Karl Flinders
