NETHERLANDS Law and Practice Contributed by: Jan-Willem van Rooij, Anne Brugmans and Jordy Kusters, Loyens & Loeff
1. Market Trends 1.1 Energy and Infrastructure M&A Market The M&A market for energy and infrastructure in the Netherlands has shown surprising strength and adaptability, even though it continues to face some challenges. Uncertainty with respect to policies, EU and national regulations and energy prices, has led many compa- nies to reassess their strategic plans. Due to uncertain business cases, industrial players, such as refineries and chemical companies, are currently postponing large investments in electrification, hydrogen or car- bon capture and storage. Most imminent is the regulatory challenge of obtain- ing NOx emissions (primarily nitric oxide and nitrogen dioxide) permits. This introduces new complexities in the current challenging phase of the transition from fossil fuels to sustainable energy. Companies that anticipate the energy transition-relat- ed changes can position themselves for success in the evolving market. The current market conditions and policy uncertainty may have made investors more selective and call for businesses to increase energy efficiency and flexibility. 1.2 Energy and Infrastructure Trends Grid congestion remains a challenge in the Nether- lands, making it difficult to obtain new connections or expand capacity. This is a persistent problem for electrification, compounded by increased energy utilisation, without a quick and easy straightforward solution. Despite the Dutch government making avail- able additional funds to alleviate grid congestion, grid operators are often unable to quickly realise additional capacity on the grid and new connections, because of practical issues (eg, staff shortages) and regulatory hurdles (eg, obtaining permits). Practical solutions have emerged to enable progress and give companies more control over their energy security, such as smart or private grids, flexible con- tracts and (co-located) battery energy storage system (BESS) projects. Solutions like cable pooling allow renewable energy projects to share a grid connec-
tion with BESS projects, supporting a more flexible and resilient energy system. On-site generation using solar or wind energy, combined with BESS, is already in use. This can be combined with closed distribu- tion systems on industrial sites, which make it pos- sible to share capacity and costs. Solutions like this allow companies to develop new projects while stay- ing within grid limits. In addition, there may also be an additional revenue model, insofar as batteries also being able to be used to reduce grid congestion. Geopolitical factors, especially European energy security, are influencing corporate strategies and deal- making. Companies are diversifying energy portfolios to reduce market volatility. Technologies such as bat- teries and solar panels rely heavily on critical minerals like lithium and rare earth elements, much of which are tied to global supply chains involving countries such as China. However, the growing demand for these minerals also presents new opportunities for innova- tion and strategic investments. 1.3 Access to the Energy and Infrastructure M&A Market Investors enter the Dutch energy and infrastructure M&A market through acquisitions, joint ventures and partnerships. They are drawn largely to renew- able energy projects, grid solutions and supporting infrastructures for stable returns, ESG alignment and state incentives for such assets. Private equity firms become more active and tend to apply “buy and build” strategies to develop smaller players or expand hold- ings of viable assets. Additionally, infra funds and foreign investors are entering via minority stakes or co-investments in renewable and grid projects, sharing risks with local participants. The market also sees start-ups scaling up and existing corporates expanding their footprints further, resulting in prospects for consolidation as much as new entry. Investors complement financial strategy with sector expertise to navigate regulatory, ESG and technology obstacles and target robust, sus- tainable assets of the energy transition.
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