Energy prices in the Netherlands are soaring and the Dutch Government must intervene immediately in the energy market, the Dutch Data Center Association has warned.
The DDCA said the price of power in the country has risen from €30 to €300 per Mwh ($34-346 per MWh) and called on the Government to “think outside the box” and quickly adjust energy tax and surcharges and set price ceilings.
“If action is not taken quickly, this will have an acute impact on many industries, including the data center sector that makes all online services and many social structures possible,” the association said, saying that other neighboring countries have intervened “quickly and forcefully” and set ceilings.
“There is now a problem and they cannot be solved with long-term contracts and the creation of buffers alone,” says Stijn Grove, director of the Dutch Data Center Association. “This has a huge impact on data centers throughout the Netherlands, the majority of which are regional SMEs, which form the digital foundation of the Netherlands.”
Gas reserves across Europe a low due to a cold winter last year, while supplies from Russia have been limited and importers are increasingly turning towards Asia, driving up prices.
The Dutch Government previously announced plans to end gas production at the Groningen plant to limit seismic risks in the region. Gas will only be extracted thereafter in the event of extreme weather conditions, for which a few sites will remain on stand-by.
France has frozen gas prices and Spain has slashed value-added tax on energy bills. In the Netherlands, the caretaker government has set aside €500m to offset the price increases but it is feared this will not be enough.
Dutch News reports that the Hague Centre for Strategic Studies has warned that there is little the government can do at the moment apart from exercise damage control. ‘In the short term, much will depend on the severity of the coming winter (not only in Europe but also in Asia), Russia’s willingness to export more gas and the extent to which gas demand goes down at extremely high prices,’ the researchers said.
The DDCA also said the current market “turmoil” is acting as a “blockade” for ongoing own power generation projects in the country.
The UK is currently going through its own energy crisis that has seen more than a dozen smaller energy companies go under. However, it seems the UK’s data center operators are largely insulated – at least for now – from the worst of it via a general tenancy towards long-term fix-priced energy contracts.