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Electricity Grid Saturation is road-blocking real estate development

In planning for the energy transition many players have assume the supply of electricity is infinite in our urban fabric. How can these challenges become opportunities to develop tangible solutions for innovative off-grid approaches on large-scale developments?

The demand for electricity is growing continuously thanks to rapid digitisation, a growing urban energy demand and the urge to move away from gas-fuelled energy dependency. While grid operators are working hard to meet this demand, bottlenecks have already blocked expansion plans.

Cities in the Netherlands are already experiencing grid saturation, which means that the grid operator can no longer provision new large-scale developments such as offices, factories, distribution centres and data centres. New developments may have to wait for up to five years for an electricity connection before they can start generating any rental income.

Is your Decarbonisation Strategy truly viable?

While many firms in the Netherlands have put in place decarbonisation strategies to meet the national Energy Transition requirements, many players plan these transitions theoretically, believing that the supply of electricity is infinite in our urban fabric. Most strategies overlook infrastructural constraints that may heavily impact the valuation, budget and technical feasibility of energy transition plans.

These constraints also directly impact the viability of new investments which already have permits but are not able to be provisioned with electricity in the initially planned timeline. In other words, the value of your building no longer depends only on your site but on the ability of the urban grid to support the required energy supply.

Thus, for new projects, grid saturation impacts heavily on the:

  • Cost of development and the solutions needed to generate and store energy
  • Ability to service tenant needs
  • Return on investment
  • Timelines for the operational stage.

Five features to achieve Overall Asset Resilience

Moving to a decarbonised society requires decarbonising not just at single asset level but also at urban infrastructural level. We need to develop buildings today that are able to integrate into the resilient and smart urban grid of tomorrow.

" We need defining strategies where building assets work as an energy vector within a broader smart grid.
Ana Cunha Strategic Sustainability Advisor | CSR Director

At Deerns, our recent experience has shown us that, to achieve overall asset resilience, it is necessary to design buildings that:

  • Are optimised to deal with a smaller electricity grid connection.
  • Manage peak loads and balance the inputs from different energy sources.
  • Generate sustainable onsite production without feeding back at the grid.
  • Are able to store sufficient energy to meet the asset’s needs.
  • Integrate Smart Building technology to reduce demand and to work in synergy with the grid and surrounding developments.

This clearly affects your innovation and technical requirements, your potential site considerations, your required budget and your final whole life cycle carbon outcome.

Asking the right questions at the right time

To meet these complex needs, dedicated advisory and technical expertise is needed from an early stage for:

  1. Site valuation: properly estimate the potential of your site, namely when existing plots (already provisioned with some electricity) become more valuable than greenfield plots that have no new energy supply for the coming 5 to 6 years!
  2. Electrification feasibility: to analyse the feasibility of the decarbonisation strategies that are based on switching first to electricity and only later to renewables.
  3. Cost of Decarbonisation in an off-grid context: The real cost of operationally decarbonising an asset, including understanding the technical conditions for success (based on the specific city electricity infrastructure) and the feasibility of solutions you are able to adopt.
  4. Regulation evolution: The regulatory implications, which impose maximum energy consumptions and carbon emissions, and may be more stringent in time.
  5. Embodied Carbon impact: Planning scenarios to encompass the project’s whole life carbon impact, including making the best choices that take into account the embodied carbon of technologies needed for local energy production and storage.
  6. Off-grid or Smart Grid readiness: Explore opportunities for supporting surrounding buildings that cannot be net zero in the short and medium term, by adopting net zero/positive and smart grid-ready integrated building design.

At Deerns, we have the technical knowledge and experience that allows us to ask the right questions at the right time. Our multi-disciplinary team of strategic advisors and engineers works closely with the client and project team to develop an integrated and forward-looking approach covering, among other services, installation technology, building physics and sustainability.

The congestion of the energy grid is a key short-term risk to consider in your decarbonisation plans and budgeting for both current and upcoming projects. This awareness also offers a great opportunity to improve a building’s viability and sustainability and to get cities ready for smart and flexible energy platforms. Are you up for the challenge? Please reach out to us to find out how we can support you on this exciting journey.

Let’s talk

Ana Cunha

CSR Director | Strategic Sustainability Advisor