TenneT and Grid Congestion: Why the Netherlands Ran Out of Power Connections

Grid congestion is the first physical constraint the Dutch energy transition has hit, and it is now the binding one: the country can generate and import more clean power than its wires can carry to the places that want to use it. The problem is not a shortage of electricity but a shortage of transport capacity, built up over a decade in which solar and wind were connected faster than substations and cables could be permitted. TenneT, the state-owned transmission operator, is the company at the centre of it. This article explains how the waiting lists grew, how TenneT is trying to finance a programme that runs to roughly €200 billion across the Netherlands and Germany over a decade, why the sale of its German arm turned into a three-year saga, and what the connection stop in Utrecht means for housing, industry and anyone planning to build something that needs power in the Netherlands. It is part of the Netherlands Company Stories hub.

What is grid congestion and why did the Netherlands hit it first?

Grid congestion is the point at which the physical capacity of the network to move electricity between regions and voltage levels is fully allocated, so that operators must refuse or queue new requests for connection or larger transport rights. The Netherlands reached that point earlier than its neighbours because of a specific combination: a small, dense country with a very high share of rooftop solar, a strong policy push to electrify industry and heating after the Groningen gas decision, and a regulatory model in which grid operators could only build in response to demonstrated demand rather than ahead of it.

The first regional congestion maps appeared around 2019, mostly for feed-in from solar parks in the north and east. By 2022 the problem had spread to consumption: data centres, electrified factories, greenhouse complexes, charging depots and new housing estates with heat pumps all needed capacity that the regional operators Liander, Stedin and Enexis could not supply because the TenneT substations feeding them were full. The national Action Programme on Grid Congestion, launched in December 2022, now runs more than 100 separate measures.

Netbeheer Nederland’s figures show the scale. At the end of 2025 there were more than 15,000 requests from large consumers waiting at regional grid operators, about 1,000 more than six months earlier. TenneT’s own list had fallen to 211 applicants, partly because it had been cleaned up. The feed-in waiting list had also grown, although the association gave no figure. Jinny Moe Soe Let, Netbeheer Nederland’s policy director, has said that the use of flexibility lags behind what is needed to substantially shorten waiting times and that alternative transport rights fill the valleys rather than lowering the peaks.

How large is TenneT and what is it building?

TenneT is the transmission system operator for the Netherlands and a large part of Germany, fully owned by the Dutch state, with underlying revenue of €9.1 billion and underlying EBIT of €2.7 billion in 2025 and a combined investment programme of about €200 billion over the coming decade. The company invested a record €14.8 billion in 2025, of which the Dutch segment contributed €992 million of EBIT and the German segment €1.59 billion. Its planned investment for 2025–2029 is roughly €43 billion in the Dutch grid and €65 billion in the German grid.

The Dutch programme is described in the Onshore and Offshore Grid Investment Plans 2026, published on 31 October 2025, which for the first time look fifteen years ahead and contain about 1,000 projects after 300 were added in the latest round. More than 70 projects were completed in the two years to late 2025, including the Hollandse Kust West Alpha and Beta offshore connections totalling 1,400 MW. Chief operating officer Maarten Abbenhuis has called on national and local governments to speed up site selection, routing and licensing, and to give energy a higher priority in spatial planning.

Grid investment in the first half of 2026 was €6.02 billion, up from €5.50 billion a year earlier, and underlying revenue rose €764 million to €5.17 billion. Reported EBIT of €6.34 billion included a one-off gain of €4.63 billion from deconsolidating TenneT Germany; excluding that, EBIT rose from €1.33 billion to €1.71 billion. TenneT has warned that full-year 2026 investment will be below plan, mainly because spending on the offshore 2 GW programme shifted to 2027 after the Petrofac contract was terminated and Larsen & Toubro took over. The 2 GW platforms are the backbone of the Dutch offshore wind roadmap, so the delay has consequences well beyond TenneT’s own accounts.

Why do TenneT’s projects keep running late?

TenneT expects about 60% of its Dutch expansion projects to be completed roughly 2.5 years later than planned, and it attributes the slippage mainly to permitting, land acquisition and integration procedures that have lengthened under the Environment and Planning Act, which came into force in January 2024 and gives citizen participation more weight. Nitrogen-deposition rules are a second constraint: because construction activity emits nitrogen oxides near protected Natura 2000 areas, grid projects regularly need a nitrogen assessment, which Netbeheer Nederland says delays construction by three to twelve months. A national exemption was judged too complex, so the government is relying on the EU Grids Package, which could remove nitrogen assessment for electricity infrastructure from early 2028.

A third constraint is people and supply chains. Gasunie, TenneT and the regional operators compete for the same engineers, environmental consultants and contractors, and the market for high-voltage transformers, cables and switchgear is tight across Europe. TenneT’s offshore programme illustrates the risk: the termination of the Petrofac contract for the 2 GW platforms in 2025, after the contractor’s financial difficulties, pushed investment into 2027 and forced a renegotiation with Larsen & Toubro.

The slippage is not for want of money. TenneT’s investment plan is approved by the regulator ACM, which filed the draft at the start of 2026 and gave final approval in April 2026, and the state has underwritten the funding. The gap is between a capital programme that can be financed and a delivery system that cannot absorb it at the required pace. That is why TenneT and the climate ministry have agreed an acceleration package that is not yet reflected in the plan.

What happened in the TenneT Germany sale saga?

The sale of TenneT’s German business, which the Dutch state began exploring in 2022 to avoid funding German grid expansion with Dutch taxpayers’ money, collapsed in June 2024 when Berlin withdrew, and was replaced in 2025–26 by a partial sale to institutional investors and the German state development bank KfW. The original plan was a full sale to the German federal government, reported by Bloomberg to be worth around €22 billion. In anticipation, the Dutch state lent TenneT €25 billion at the start of 2024 to cover its 2024–25 needs, intending to recover much of it from the sale proceeds.

On 20 June 2024 TenneT announced that its discussions with KfW had ended. Germany’s coalition had been left with a budget gap of about €60 billion by a constitutional court ruling and could not afford the acquisition. The failed deal left a €1.6 billion hole in the Dutch budget, money that had been paid into TenneT and was expected back that year, and outgoing finance minister Steven van Weyenberg told parliament that an additional short-term solution was needed. TenneT then prepared alternatives: an IPO of the German unit, a private placement or more state capital.

The private route won. On 24 September 2025 TenneT announced that APG, investing for the pension fund ABP, Norges Bank Investment Management and Singapore’s GIC would provide up to €9.5 billion of primary equity to TenneT Germany in tranches for about 46% of the company, valuing the German unit at an enterprise value of about €40 billion, or 1.09 times its regulated asset base, with a pre-money equity value of €10.4 billion at the end of 2025. A €12 billion revolving credit facility underwritten by BNP Paribas, Deutsche Bank, ING and UniCredit accompanied the deal. On 3 February 2026 the Dutch and German governments agreed that KfW would buy a further 25.1% for about €3.3 billion at the same price per share, with primary commitments of up to €2.3 billion, leaving TenneT Holding with about 28.9% and a veto over important decisions.

What did the Utrecht connection stop reveal?

On 12 February 2026 TenneT warned that the high-voltage network in Utrecht, Gelderland and Flevoland was at full capacity and that, without powerful interventions, it would stop all new connections in the region from 1 July, including households, small businesses and housing developers; after two months of negotiation the stop was confined to the Utrecht region, where it took effect on 1 July 2026. The warning was unusually blunt. TenneT said that strain on cables and substations made widespread outages more likely, and climate minister Sophie Hermans called the outlook deeply frustrating and asked for a second opinion.

The compromise announced by state secretary Jo-Annes de Bat on 22 April 2026 divided the three provinces into five congestion areas with a single decision framework and six-monthly recalibration, the first in October 2026. In southern Flevoland, Soest-Bunschoten, Dodewaard, Doetinchem, Dronten, Harderwijk and Hattem, capacity is being released in a controlled way pending flexibility contracts to be signed by the end of 2026. In the Breukelen-Kortrijk area, which feeds Utrecht city, Nieuwegein and the ring between Breukelen, Vianen and Driebergen, no new connections are granted and all requests go on a waiting list. About 800,000 people live in the zone.

De Bat said roughly 35,000 homes could still be connected under existing commitments and that all ongoing housing projects had capacity, but Utrecht’s municipal analysis estimated the cost of a full freeze at €75–225 million a year and expected one in five housing projects to fail after 2027. Mayor Sharon Dijksma called the decision a bitter pill. Lasting relief depends on expanding the Breukelen substation and building a new high-voltage station north of Utrecht, which NOS reported might not be ready until 2031 and for which no site had been chosen. The Dutch housing shortage story explains why the timing could hardly be worse.

How does congestion affect Dutch businesses?

For a company that needs a new or larger connection, congestion translates into waiting times measured in years, a priority framework that favours safety, housing and public services over commercial expansion, and a growing menu of flexible contracts that offer capacity only outside peak hours. The ACM’s prioritisation framework, in force since 2024, lets operators move congestion-relieving projects and socially important users ahead of the queue; most industrial applicants fall into the lower categories that receive capacity only when it becomes available.

The economic cost is contested but large. Estimates cited in the Dutch press put the social cost of congestion at €10–40 billion a year, and a policy think-tank analysis quoted by Verdantix values undelivered electricity at up to roughly €50,000 per MWh depending on the user. Deltalinqs, the Rotterdam port business association, lists grid tariffs and congestion alongside energy taxes as reasons why chemical plants have closed, a theme developed in the Rotterdam hydrogen hub article. Data centres have been among the most affected users, as the data centre moratorium story describes.

TenneT’s countermeasures are starting to show results. Time-dependent transmission rights could unlock up to 9 GW of off-peak capacity nationally. In the first half of 2026 TenneT contracted a 200 MW battery project in Noord-Brabant, made 307 MW available through flexible arrangements with solar parks in the north and unlocked a further 260 MW in Zeeland, enabling 173 new or expanded connections. In Germany it has moved away from first-come, first-served and now assesses battery and large-consumer applications on criteria such as the probability of realisation, a change Dutch regulators are watching.

How much is the Dutch state putting in, and who pays in the end?

The Dutch state has supported TenneT with a €25 billion shareholder loan at the start of 2024, an irrevocable and unconditional guarantee for TenneT Netherlands’ grid-investment debt over the next decade and the political cover to sell down TenneT Germany, and the cost ultimately lands on electricity consumers through regulated tariffs. TenneT Netherlands issued its first €2 billion green bond under the state-guaranteed structure in March 2026 and expects to raise €6–8 billion of debt in 2026. In July 2026 TenneT repaid €3.3 billion of the shareholder loan from the KfW proceeds, and finance minister Eelco Heinen’s spring budget booked the repayment.

The tariff consequences are now visible. The ACM’s preliminary forecasts in September 2026 showed grid fees rising about 19% in 2027, adding about €89 to an average household’s electricity bill and €52 for gas, with further increases of 5–6% a year thereafter. ACM director Michiel Denkers attributed the spike to new agreements that allow operators to recover investment costs faster. Liander’s chief financial officer Walter Bien acknowledged the increase was substantial but argued that the alternative, an overloaded grid, is more expensive. Climate minister Stientje van Veldhoven, who succeeded Hermans in 2026, said an emergency fund would be available for households that cannot pay.

Institutional investors are the other source of capital, and here the Netherlands is reusing its pension system. APG, investing for ABP, is now a shareholder in TenneT Germany alongside Norges Bank and GIC, and Dutch pension funds are also behind the Noordzeker offshore wind consortium. The Dutch pension reform story explains why the funds are looking for exactly this kind of long-dated, inflation-linked infrastructure return.

What leadership and governance changes are shaping TenneT?

TenneT is changing its chief executive and its structure at the same time: Manon van Beek’s second and final term ended in August 2026, and Frans Everts, previously Shell’s country chair for the Netherlands, takes over as chief executive and chair for a four-year term from 1 November 2026. Dieuwert Inia remains chief financial officer of TenneT Holding and TenneT Netherlands. Everts inherits a company that has just lost control of its German subsidiary, which is now accounted for as a 28.9% minority interest, and that must deliver a Dutch programme of roughly €43 billion over five years while managing public anger over tariffs and connection stops.

The split funding structure agreed in April 2025, under which TenneT Netherlands and TenneT Germany each raise their own financing, formalises what the sale process had made inevitable: two national grid companies under a holding that coordinates the North Sea connections and the 2 GW programme. Cooperation on offshore wind connections is written into both the APG/GIC/NBIM and the KfW agreements, because both countries rely on the same platform technology and supply chain.

The German side has its own pressures. TenneT Germany began construction of the HeideHub in January 2026 and the Sengwarden energy hub, which will connect 4 GW of offshore wind, in April, and it had 391 customer connection requests pending at the end of 2025 with battery-storage demand often exceeding available capacity. For readers tracking the German transition, the Germany Company Stories hub covers the counterpart story.

What can founders and investors learn from TenneT and the Dutch grid?

The first lesson is that infrastructure, not technology or capital, is the bottleneck of the energy transition. The Netherlands has no shortage of solar panels, offshore wind permits or state-guaranteed funding; it has a shortage of permitted, built and energised substations. Founders building electrified businesses, from charging networks to green steel, should plan around the grid timetable rather than their own.

Second, the regulated-asset model has limits when the asset base must double in a decade. TenneT’s EBIT grows with its regulatory asset base, which makes it attractive to pension funds and sovereign wealth funds, but it also means every euro of investment flows back into tariffs. The Dutch state has learned that selling equity in a grid company to long-term investors is politically easier than funding it from the budget, which is why KfW, APG, GIC and Norges Bank now sit on TenneT Germany’s register.

Third, flexibility is the only short-term supply of capacity. Batteries, time-dependent transmission rights and curtailable solar unlocked more than 700 MW in the Netherlands in a single half-year, while a new substation takes five to ten years. Companies that can shift load, co-locate storage or accept curtailment will get connected first, and investors in flexibility assets are in effect selling the scarcest product in the Dutch economy.

Finally, the governance saga of TenneT Germany shows the value of optionality. When Berlin walked away in June 2024, TenneT had already prepared an IPO track and a private placement track, and it executed the private route within fifteen months. For a deeper look at how Dutch state-owned companies handle ownership transitions, the ABN AMRO reprivatisation story offers a parallel in banking, and the Groningen closure article explains why electrification has become the national priority that the grid must now carry.

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