Reliable but Inaccessible: The Overlooked Welfare Cost of Grid Connection Queues

Electricity systems increasingly combine high reliability with constrained access: networks that perform well on conventional reliability metrics accumulate large backlogs of users unable to connect. In the Netherlands, the connection queue is approximately the size of installed capacity, with reported wait times of eight to ten years. Yet the welfare cost of denied access and the welfare value of reliability protection are not evaluated within a common framework for planning, investment, regulatory, and queue-priority decisions in practice. This paper develops a welfare-theoretic social cost-benefit analysis placing reliability and connection-delay costs on a common basis, whether network transport or generation adequacy is binding. Reliability cost is treated as a conservative upper bound; connection-delay cost as temporary deferral of economic activity, accounting for sectoral substitutability and project realisation rates. Applied to the Netherlands, connection-delay cost exceeds reliability cost by a factor of approximately 16 at the planning standard, falling to approximately 3 under TenneT’s projected 2033 warning regime (loss of load expectation, LOLE, of 14.2 h/yr). This dominance holds in 99.7\% of 6{,}000 scenarios spanning empirical and conservative reliability ranges. A stylised risk-based relaxation analysis indicates that modest relaxation would improve welfare under empirically calibrated Dutch reliability sensitivity. The welfare-optimal connection strategy remains calibration-dependent: empirical reliability values favour high-VoLL demand connections first, whereas conservative sensitivity calibrations make renewable-first the regret-minimising choice. The results support SCBA screening to identify relaxation ranges for detailed simulation, complement categorical queue-priority rules with welfare-based ranking, and refine local reliability calibration before regulators commit to a specific strategy.