Grid operators will welcome the proposal, while housing market and businesses will also benefit from the grid upgrades
At all meetings, seminars, webinars, podcasts that deal with energy markets and energy transition, both at in the Netherlands and abroad, one phrase takes centre stage: grid congestion. It is a bottleneck for the energy transition and indirectly also for solving the housing shortage.
Both the energy transition and housing face the same challenge: to build, build and build. But when these processes involve litigation that goes all the way to the Administrative Law Division of the Council of State (Afdeling bestuursrechtspraak Raad van State), projects can be significantly delayed. In practice, the shovel does not go into the ground until there is an irrevocable environmental permit. Moreover, in certain cases, the fate of residential construction is linked to that of energy infrastructure expansion; after all, a new residential area must be able to be connected to the grid.
On 28 May, the government launched a consultation round on a draft decree (ontwerpbesluit) to designate certain types of electricity projects as "special" under the Dutch Environment Act (Omgevingswet) by making some changes to the related Environment Decree (Omgevingsbesluit) to shorten decision-making, decision times and appeal procedures.
Stronger control of public housing
The draft decree does not stand alone and follows the bill on strengthening the management of public housing (Wetsvoorstel versterking regie volkshuisvesting) that was sent to the Dutch parliament by the housing minister, Hugo de Jonge, in his parliamentary letter on 7 March. Among other things, the bill adds a new article to the Environmental Act, namely article 16.87a, which is not to be confused with the current article 16.87a that is to be renamed article 16.87b after the amendment.
The bill creates the possibility to designate projects whose accelerated implementation is necessary in order to address important social interests. It allows the projects to benefit from shortened procedures. The bill, therefore, provides an opportunity not only for housing construction but also for other projects (such as energy projects), to put them on the list for fast-tracking.
In anticipation of the bill, a draft decree has already been submitted for consultation: the draft decree on strengthening the management of public housing. This includes an amendment to designate projects for at least 12 houses in a contiguous area as a priority project within the meaning of article 16.87a of the Environmental Act. There is also a decision with the same purpose as the draft decision for electricity projects, which is to shorten the lead time of permit processes.
Consequences for electricity projects
The draft Electricity Projects Decree envisages a temporary amendment to the Environment Decree whereby, until 1 January 2032, decisions, appeals and objections for certain category of decisions that involve the construction, expansion, maintenance or modification of a transmission or distribution system for electricity as referred to in article 1.1 of the Energy Act (currently the Electricity Act 1998) with a voltage level equal to or greater than 25 kilovolts will be regarded as decisions as referred to in article 16.87a (new) of the Environment Act.
The idea is that grid congestion at high- and medium-voltage levels (that is, at least above 3 kilovolts) affects congestion on low-voltage grids (transport to and from small consumers such as households, small businesses and social institutions) and, therefore, accelerated expansion of the infrastructure will provide more opportunities for the connected low-voltage grids.
Shortened procedures
The amendment proposed should shorten procedures. It replaces the current two-instance appeal to the court and then to the Administrative Law Division of the Council of State with a single-instance appeal to the Administrative Law Division of the Council of State. Rulings by administrative law judge will be within six months. It prescribes expedited hearings of appeal. And it excludes the possibility of 'pro forma' appeals.
The explanatory notes to the proposal explicitly state that the designation does not apply to decision-making for the realisation of wind farms, solar parks or other installations for the production of electricity. Offshore wind projects also fall outside the scope of this draft decree.
The target date for entry into force is 1 January 2025 is also dependent on the passing of the bill and its entry into force.
Osborne Clarke conclusion
This proposal will be particularly welcomed by grid operators, but businesses and the housing market will also benefit indirectly from an accelerated upgrade of energy infrastructure. The only question is whether this solution to grid congestion and the housing shortage will not lead to case law congestion at the Administrative Law Division of the Council of State.
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