Power grid constraints threaten Dutch digital innovation ambitions

Recent research from Schneider Electric warns that datacentre electricity demand could more than double between now and 2026, reaching over 1,000 terawatt-hours. 

This surge in power demand comes at a particularly challenging time, as the last Dutch provinces with available grid capacity – South Holland and North Holland – have now declared they have no room left for growth. This gridlock threatens existing digital operations and future innovations, particularly in artificial intelligence (AI) development. 

“We’re seeing enormous waiting lists for power connections, precisely during a period when we need to transition to renewable energy and increase digitisation,” said Stijn Grove, managing director of the Dutch Data Center Association (DDA). “When the government recently announced plans for an AI factory in the Netherlands, they’re probably looking at a very small facility because larger operations simply cannot be placed anywhere at the moment.” 

The Dutch datacentre sector isn’t standing still. The DDA is in talks with the ministry and relevant stakeholders to address these challenges with innovative approaches. “We’ve calculated what’s possible when we implement smarter approaches to power usage,” he said. “For example, datacentres currently operate behind two transformers for redundancy, but we could function with just one since we have emergency power systems in place.” 

Several datacentres are already implementing direct connections to high-voltage networks and building their own electrical substations, completing these projects five to 10 years faster than traditional grid operators. The sector is also exploring integration with other intensive energy users to create smart power-sharing systems. “By implementing these solutions, we could potentially free up 1 gigawatt and probably even more power capacity,” said Grove. “Enough to power millions of homes.” 

While North Holland’s new datacentre strategy acknowledges the sector’s role in grid solutions, he said concrete actions are essential for implementing the strategy. The province’s approach, while well-considered, highlights the gap between policy ambitions and infrastructure reality. 

The Schneider Electric research outlines four possible scenarios for AI-related power consumption through 2035, with the most sustainable pathway requiring significant infrastructure improvements and coordinated planning – elements currently lacking in the Netherlands’ approach. 

This shortfall in planning is particularly concerning given the global acceleration of AI development. “While we’re setting up a small AI factory, the US has just announced initiatives 200 times larger,” said Grove. “We can’t compete at that scale.”

The implications extend beyond the datacentre sector. “The government has ambitious plans to solve healthcare challenges through innovation, like reducing administrative burdens and addressing staff shortages through digitisation,” he said. “But if you don’t have the means to implement these digital solutions, it becomes a very difficult ambition to achieve. Every organisation, from hospitals to large companies to government agencies, will face problems because there’s no room for growth.”

Innovation at risk

The timing of this power crisis is particularly problematic as the Netherlands aims to maintain its position as a digital leader in Europe. The country’s historical role as an early internet adopter and digital innovation hub is now under threat. This position, built up over the past two decades, has been crucial for both economic growth and digital sovereignty. 

“We don’t need to host every type of datacentre – we don’t have large social media or Bitcoin mining operations here,” said Grove. “Most hyperscalers are spread across Europe. We focus on value-added services that support innovation and digital transformation. But in this time of increasing geopolitical instability, we risk losing even these strategic capabilities if we don’t act now. International organisations are already saying that further growth won’t happen in Amsterdam or the Netherlands – they’re looking elsewhere because we simply can’t provide the power capacity.” 

The power constraints come just as AI development becomes increasingly crucial for maintaining economic competitiveness. According to Schneider Electric’s research, AI workloads could drive a 160% increase in datacentre power demand by 2030, potentially rising from 1-2% of overall power consumption to 3-4% by the decade’s end. This growth reflects the exponential increase in AI applications across industries, from healthcare and manufacturing to financial services and scientific research. 

The Dutch Ministry for Economic Affairs announced its plan to start a working group that includes ministries, provinces and industry representatives to address these critical infrastructure challenges. However, the fragmented nature of the field complicates finding solutions. “Knowledge about our sector is quite limited,” said Grove. “We must actively explain our role and potential solutions.” 

The datacentre sector advocates for demonstration projects that showcase how digital infrastructure can be part of the solution to grid congestion rather than simply contributing to the problem. He specifically envisioned a breakthrough project that would create a campus-style environment integrating multiple datacentres, research facilities and educational institutions. 

The urgency is underscored by the Draghi report on competitiveness with China and the US, highlighting the risk of the Netherlands and Europe falling behind in digital infrastructure. Grove emphasised that the country cannot afford to stand still for the next 10 years, pointing out that the potential geopolitical and economic consequences of inaction are immense.