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The imperative to tackle grid congestion – how utilities
can respond

^{GRID CONGESTION}

The imperative to tackle grid congestion – how utilities can respond

The global energy transition is reshaping electricity systems faster than at any point in recent decades. In doing so, it’s placing unprecedented pressure on power networks and making grid congestion one of the greatest barriers to economic growth, electrification, and decarbonization.

Electricity demand is expected to more than double by 2050 in many markets as electric vehicles, heat pumps, hydrogen production facilities, data centers, and industrial electrification significantly increase power consumption. At the same time, renewable generation is being deployed at record pace, often in locations far from demand centers. It’s also increasingly connected at the distribution level rather than through traditional centralized generation models.

The result is a growing mismatch between where electricity is generated, where it’s needed, and how much capacity is available to transport it. Networks originally designed for predictable, one-way power flows are now managing increasingly complex, bi-directional flows from distributed solar, wind, and storage resources. Large-scale data centers are adding further strain; although they accounted for around 1.5% of global electricity demand in 2024, their electricity consumption is expected to almost double by 2030. In some regions, connection requests already consume a significant share of available grid capacity.

These pressures are creating widespread congestion across transmission and distribution networks, delaying renewable energy connections, slowing industrial investments, increasing operating costs, and limiting the pace of electrification. What was once considered a localized operational issue has become a strategic challenge with far-reaching economic consequences, influencing infrastructure investment, affordability, reliability, and national competitiveness. As connection queues continue to grow and network capacity becomes increasingly constrained, addressing grid congestion has become a critical priority for utilities, regulators, and policymakers worldwide.

A global challenge with significant economic consequences

Grid congestion is becoming a systemic challenge across both mature and emerging electricity markets.

Rising congestion costs, longer connection queues, renewable curtailment and pressure on network infrastructure all point to the same conclusion: grids are struggling to keep pace with the energy transition.

The Netherlands: congestion has become a constraint on economic growth

The Netherlands illustrates how grid congestion has evolved from a technical challenge into a strategic economic issue. In several regions, network capacity constraints have halted new customer connections, while congestion-management costs reached €278 million in 2023. That follows €340 million in 2021 and a peak of €388 million in 2022.

In 2025, TenneT reported that through innovative measures such as flexible connection contracts, it had unlocked access to up to 9.1 GW of off-grid capacity – equivalent to more than 40% of national peak demand. Yet the ongoing high annual costs of congestion highlight how grid constraints are increasingly shaping investment decisions, delaying electrification programs, and slowing the connection of new businesses and energy projects.

Figure 1: Netherlands congestion map and key congestion statistics

Map taken from the IEA

Germany: renewable growth is exposing structural transmission bottlenecks

Germany's congestion challenge stems from the mismatch between renewable generation in the north and major industrial demand in the south and west – making the north-south transmission corridor a critical bottleneck. As grid upgrades struggle to keep pace, solar curtailment nearly doubled in 2024, rising 97% to 1.41 TWh. Meanwhile, distribution network congestion increased to 26% of cases, up from 20% in 2023, indicating grid stress is shifting downstream. With annual congestion costs reaching approximately €2.6 billion in 2024, Germany demonstrates how network constraints can increase costs, curtail renewable generation, and slow the energy transition.

Figure 2: Germany congestion management and renewable curtailment impacts

Map taken from smard.de

United Kingdom: balancing costs continue to rise

In Great Britain, grid congestion is increasingly reflected in rising system balancing costs as transmission constraints limit the efficient movement of renewable electricity across the network. Grid balancing costs have nearly tripled over the last six years, increasing from approximately £1 billion in 2018/19 to £2.7 billion in 2024/25. Congestion is now the primary driver and thermal constraints account for 63% of total costs.

Scotland remains one of the clearest examples of the challenge, with structural transmission constraints resulting in the curtailment of approximately 13% of available wind generation.

The UK's experience shows how network bottlenecks can increase system costs, constrain renewable integration, and widen the gap between grid capability and energy transition ambitions.

Figure 3: UK balancing costs and transmission bottlenecks

Map taken from NESO

United States: connection queues have reached unprecedented levels

The US power grid is facing a severe connection queue crisis, driven by rapidly rising transmission congestion and limited grid capacity. By 2024, the connection queue had grown to 2,290 GW, far exceeding the 1,322 GW of installed generation capacity. Congestion costs had reached approximately $12.3 billion per year, with transmission bottlenecks continuing to worsen across regional grid operators. If all queued projects were connected, US generation capacity would nearly triple. This points to a significant mismatch between renewable energy development and the grid’s ability to accommodate new generation without major infrastructure upgrades.

Figure 4: US transmission congestion costs and interconnection queue growth

Map taken from Grid Strategies

Belgium: congestion is increasingly moving downstream

Belgium is experiencing growing electricity grid congestion, particularly in Flanders and parts of central and southern Belgium. As of 2024, 16 of 235 transformer substations in Flanders were congested, with several overhead lines nearing saturation. Constraints are concentrated at the interface between Elia’s 110 kV transmission network and Fluvius’ distribution network, where bottlenecks can affect wider areas. To manage limited capacity, new connections above 1 MVA in congested zones are restricted to flexible access arrangements, highlighting the need for grid reinforcement and increased network flexibility.

Figure 5: Belgium congestion hotspots and transmission-distribution interface constraints

Map taken from Elia Group

Connection queues are becoming the clearest symptom of grid stress

Across major power markets, renewable generation, storage, industrial projects and data centers are waiting years to connect to the grid because available capacity is increasingly constrained.

Active interconnection queues have reached approximately 2,500 GW globally (2024-2025). In the United States, projects awaiting connection represent almost twice the country's installed generation capacity, while European queues continue to grow as renewable deployment outpaces grid reinforcement.

These delays are increasing project costs, slowing investment decisions and postponing new clean energy capacity. As a result, connection queues are turning from an administrative bottleneck into a structural constraint on economic growth, electrification and decarbonization.

Figure 6: Global connection queues and scale comparison

Curtailment is becoming the second congestion hurdle

Securing a grid connection is no longer enough. Even after projects connect, many grids cannot absorb all the renewable electricity generated, forcing operators to curtail output that could otherwise support decarbonization.

Curtailment is becoming another clear sign that network infrastructure isn’t keeping pace with renewable deployment, creating economic losses for developers and reducing the efficiency of the energy transition.

Chile records some of the highest curtailment levels among major renewable markets, while Ireland, the United Kingdom and Brazil are also seeing elevated rates. Larger markets, such as the US, Germany and China, are absorbing substantial financial losses as increasing renewable output cannot reach consumers when and where it’s needed.

Figure 7: Renewable energy curtailment rates and estimated economic impact

Multiple forces are reshaping the grid

Grid congestion is being driven by several structural shifts happening at once across electricity systems.

Electrification is accelerating demand: 32.9 million new electric vehicles were added in 2025, with EV fleet electricity consumption reaching 250 TWh and expected to rise further by 2035.

Data centers are adding major pressure. They already represented about 1.5% of global electricity demand, or roughly 485 TWh, in 2025 – and their share is expected to double to around 3% by 2030.

Renewables, storage and microgrids are also changing power flows, replacing one-way centralized supply with more complex bi-directional flows that require tighter coordination across grid operators and market participants.

New lines cannot be the only solution to such wide-ranging challenges

Grid reinforcement remains essential, but new transmission and distribution infrastructure alone cannot solve congestion fast enough.

Building new assets can take years of planning, permitting, land acquisition, construction and commissioning – in some markets, close to a decade. Yet congestion decisions often need to be made within months.

Utilities therefore need to maximize existing grid capacity while continuing long-term network expansion, combining infrastructure investment with operational efficiency rather than treating them as alternatives.

Figure 8: Average lead time for grid infrastructure development

Data relates to the period 2010 to 2021, published by the IEA in 2023.

Grid-enhancing technologies are becoming an essential part of the solution

Utilities no longer need to rely only on traditional infrastructure investment. Grid-enhancing technologies (GETs) can improve asset utilization, increase operational flexibility and unlock capacity faster.

Key options include dynamic line rating and dynamic transformer rating, topology optimization, advanced power flow control and storage as a transmission asset (SATA).

For persistent congestion, utilities may still need reconductoring, voltage uprating or new transmission infrastructure. The priority is selecting the right mix of solutions for each asset, region and congestion scenario.

Figure 9: Grid-enhancing technologies comparison matrix

Addressing congestion with proven practices and tailored interventions

The reality is that congestion management is becoming increasingly portfolio driven.

Utilities must understand current and future congestion risks, identify emerging demand and generation hotspots, and continuously evaluate mitigation options.

Leading organizations are moving towards dynamic congestion management models that combine:

Continuous congestion monitoring
Future congestion forecasting
Stakeholder engagement
Asset investment planning
Grid-enhancing technologies
Storage deployment
Demand and generation flexibility
Targeted infrastructure expansion.

Rather than treating congestion as an operational issue alone, successful utilities are increasingly managing it as a strategic portfolio challenge.

Conclusion: congestion management will become a core utility capability

Grid congestion is becoming a defining challenge for modern electricity systems as electrification, distributed renewables, data center growth and changing consumption patterns outpace traditional grid expansion.

While new infrastructure remains critical, utilities can no longer rely on transmission and distribution expansion alone. Success will depend on combining investment with advanced monitoring, forecasting, flexibility, storage and grid-enhancing technologies.

Utilities that build these capabilities fastest will be better positioned to maintain reliability and affordability while enabling electrification, renewable integration and economic growth.

Authors

Philippe Vié

Senior Advisor, Energy and Utilities, Capgemini

Rene Kerkmeester

Global Vice President, Integrated Power, Capgemini