Dutch State Secretary for Climate and Green Growth Jo-Annes de Bat couldn't have been clearer.

"Hardly a day goes by without new reports of projects that cannot go ahead because of grid congestion," he wrote in the biannual progress update on the National Grid Congestion Action Programme, sent to parliament on Oct. 5.

"Waiting lists are enormous, and grid congestion has become a household term."

For the commercial real estate sector, the lack of grid capacity is stalling growth and costing money. New developments and corporate relocations are being delayed in a market where macroeconomic conditions are already making it difficult to make a profit.

According to the progress report issued by the government, large users on the list are having to delay expansion plans and sustainability projects are being postponed. Industrial companies are having to adjust their operations for lack of capacity, which can cost them revenue and growth opportunities.

"We are receiving more and more notifications from members that projects are being delayed because a new or higher connection is not available in time," Daphne Warner, spokesperson for Bouwend Nederland, the largest trade association for construction and infrastructure companies in the Netherlands, told Bisnow. 

There are some mitigations owners and developers can put in place. But even before an increase in capacity required for new data centers is taken into account, the real estate industry is struggling to power its future.

One of the main structural issues impacting new developments, grid congestion wasn't even noticeable until 2018. But by 2021, it had escalated into a full-blown national crisis. Together with rising nitrogen emissions, congestion has become a limiting factor for spatial and economic development in the Netherlands.

In fact, it has become such an issue that it is costing the Dutch economy between €10B and €35B in economic benefits annually, according to research from Boston Consulting Group.

In areas with higher levels of grid congestion, including Utrecht, Gelderland, Flevoland and Noord-Brabant, the waiting time for energy capacity for large-scale commercial users, which includes logistics and distribution centers, industrial and manufacturing facilities, data centers, office parks and shopping centers, can run to several years, according to Netbeheer Nederland.

It is an issue that occurs when the demand and/or supply of electricity in an area is more than what the cables and substations can handle. As the Netherlands generates more sustainable and renewable electricity while simultaneously using more energy, current power facilities are unable to keep up. The issue tends to be worse in the morning and early evenings, the peak hours for electricity consumption. 

In order to prevent overload and power outages, grid operators declare congestion, similar to traffic jams. Grid congestion can work in both directions, with certain businesses, usually within the industrial or logistics sector, being blocked from using more power or from feeding power back into the grid. Provinces like Noord-Holland, Zuid-Holland and Noord-Brabant are facing major roadblocks regarding construction, sustainability, mobility and economic development.

"The differences [in congestion] are large and often very local. The situation and available capacity can vary greatly per supply area and substation," Warner said. "As a result, a project can go ahead in one municipality and not a few kilometers further away."

New housing is affected too. Nearly half of the estimated 600,000 new homes for which municipalities and developers applied for grid connections between Jan. 1 and July 1 can't be connected immediately under current conditions, according to Netbeheer Nederland.

Grid congestion isn't just limited to new developments. It impacts existing properties as well.

Relocation was highlighted as one of the main drivers of logistics takeup in the first half, with 43 deals for more than 10,000 square meters signed in that period, up from 31 in the same period last year, according to CBRE. Businesses are increasingly opting for newer buildings with "modern, automation-ready space" that will likely require a solid power supply. 

Properties with sufficient capacity are now becoming increasingly valuable, while more outdated buildings without a good energy supply are falling behind, NVM Business reported. In the latest quarterly survey from the specialized commercial real estate department of the Dutch Association of Real Estate Agents and Appraisers, members highlighted power shortages as the largest bottleneck, with accessibility, location and rental price mattering less if a property lacks sufficient power capacity.

While congestion may be becoming more normalised, it doesn't mean nothing is being done about it. The Dutch government previously rolled out the National Grid Congestion Action Program in December 2022 to help accelerate the large-scale expansion of grid capacity, while optimizing current capacity and offering more energy flexibility.

On Sept. 11, the cabinet announced a series of amended regulations concerning grid expansion, which includes the reduction of mandatory permits. However, as LAN is executed in predetermined phases, large-scale commercial users are unlikely to feel an easing of pressure until 2030 at the earliest. 

But expansion of the medium-voltage grid is behind schedule. Operators laid 1,041 kilometers of cable in the first half of the year, less than half of 2025's total and below expectations, partly because of limited physical space and complex spatial procedures.

"Grid congestion has become the norm," said Karlijn Elias-Peters, managing director of Sunrock, which installs rooftop solar, batteries and energy management systems on logistics and industrial properties across around 250 sites in the Netherlands.

While there are no quick-fix solutions to congestion, there are some options property developers can employ to help overcome delays on new construction sites. For new sites being built, options like temporary connections, batteries, flexible contracts or other temporary energy supplies are sometimes used, Warner said. 

"For the existing properties, [power] options can include a lower peak capacity, energy storage, energy hubs or flexible transport contracts, insofar as these are available locally," she said, adding that these measures can help relieve congestion but shouldn't be viewed as a general substitute for sufficient grid capacity and expansion of the electricity grid.

The additional costs for temporary solutions can be considerable and, depending on the contractual agreement, fall on the client, the developer, the construction company or the tenant.

Some energy experts see other ways companies can move around when it comes to grid capacity. Elias-Peters told Bisnow the key to working with grid congestion, especially for larger users, lies in smart management, monitoring how and when power is used, and storing energy to be used at the right moment.

"You should not expect electricity to be there 100% of the time," she said in regard to the reality of congestion. "But if you steer it smart, you can do a lot." 

Other solutions Sunrock is exploring are group transport agreements, under which several businesses on a site share their grid capacity and divide it among themselves, as well as shared connections, Elias-Peters said.

In response to these uncertainties, De Bat announced new legislation to accelerate grid expansion and provide better utilization of the grid.

Through 10 specific measures, the Dutch cabinet hopes to cut the lead time for grid connection in half. These measures include the removal of the permit needed for technical building activity surrounding new medium- and high-voltage substations, which De Bat said could let dozens of new-build construction projects be completed "several months to a year and a half" sooner than expected. The amended regulations also aim to exempt grid expansions from nitrogen permit requirements.

"The crisis legislation is a good step," Warner said. "Faster court proceedings and fewer permit procedures for new stations can accelerate the expansion of the grid."

"Furthermore, better energy spatial planning is needed," she said, adding that grid planning should be linked to housing and development from the start, with space for temporary solutions so new projects in congested regions can start.

However, reprieve for many from grid congestion will be slow, even as the government makes the issue a priority.

"We're reaching a critical point, but I do see some relief. I see some grid operators are managing it better," Elias-Peters said. "Sometimes we get a message along the lines of, 'Hey, we're opening up capacity here again,' which should help a bit."

And for large-scale users and certain regions, the target dates for improvement keep moving.

"The first time we heard of this, it was along the lines of, 'Oh, you will get your connection in 2028.' And then it was pushed to 2030. And now it's 2032," Elias-Peters said. "So I don't expect grid congestion to improve anytime soon."