Amsterdam’s electricity network is reaching its limits, a study of the energy infrastructure in the North Holland province by network controller Alliander and the municipality of Amsterdam found. According to grid manager Alliander (2019), the data centers around Amsterdam already consume 15% of the total power capacity of the municipality of Amsterdam. As a result, data centers put pressure on the capacity of the energy network in the city, and energy providers are struggling to connect households and businesses.
The Amsterdam region has suffered several power failures in recent years, with significant consequences. On April 29, 2018, a major power outage hit the Haarlemmermeer, which also affected Schiphol, and thousands of passengers were no longer able to check-in, resulting in utter chaos. Before the construction of new data centers can proceed further, there needs to be a substantial investment to improve the electricity grid, according to Alliander.
In addition, the municipalities want to retain space for housing, businesses, nature, and recreational need, so they need to formulate clear policies.
In the press release from the municipality of Amsterdam, the alderman for Sustainability and Spatial Development of Amsterdam, Marieke van Doorninck says:
The Netherlands has an important position as a connectivity node to store and process data from an international perspective. Because of the connection to the AMS-IX, many data centers gravitate towards the internet node in Amsterdam. As a result, companies depend on a relatively small area, which means that a disaster in this region can have significant economic consequences. Companies should separate their data storage among data centers in different regions to spread risk and prevent losses when an emergency hits. By doing so, we become less dependent on the stability of connections in the greater Amsterdam area.
A temporary halt to building data centers in the Amsterdam region could negatively affect the position of the Netherlands as a digital leader in Europe. However, this opens new opportunities for other areas in the Netherlands to develop smaller datahubs.
The geographical spreading of data center locations throughout the Netherlands provides an economic stimulus to various regions. International connectivity is crucial for positioning a region, and data centers attract (international) tech companies, and it works in favor of local economies by creating jobs, among other things. Finally, spreading out data centers ensures that the pressure on the electricity network and the spatial design of the landscape are balanced.
The Dutch data center sector argues for a constructive solution to solve these challenges concerning digitization and energy transition. Within the Spatial Economic Development Strategy, national and regional governments also made agreements about the growth of data centers. By drawing up a roadmap, they want to establish multiple data hubs throughout the Netherlands, whose main objective is to improve the country’s international competitive position.
The province of South Holland has already started a research study to gain insight into the economic niches of the local digital economy, including opportunities that contribute to it, such as the construction of the 5G network, fiber optic connections, and the role of data centers. In collaboration with the business community, the municipality of Rotterdam has started recruiting international technology groups to the region.