After Spain, Italy and Portugal it is now the turn of the Netherlands to feature in the Magnus Blog with its National Energy and Climate Plan (NECP). Like other countries, the NECP of The Netherlands sets out the ambitions for 2030 and describes the measures that will be taken in the period 2021 – 2030 to achieve those ambitions. The NECP and the goals for 2030 mark the path to the final goal of (almost) full decarbonization by 2050 and fulfillment of the Paris Agreement.
At this stage the NECP´s have the status of concept, with the final version to be presented before the end of 2019. In the case of the Netherlands the concept NECP will be supplemented with more concrete measures currently being drawn up in the National Climate Agreement. This agreement is an expression of a longstanding (Dutch) tradition to include all stakeholders in important and long-term policy decisions, to ensure broad commitment in society. Nevertheless, the concept NECP is an important framework which lies down the ambitions for 2030 and beyond.
Goals for 2030
Since it is the greenhouse gasses that cause climate change, the Netherlands has chosen to make the reduction of greenhouse gasses the leading target. Other goals such as the percentage of renewable energy and increased energy efficiency are deducted from this main target.
In light of the Paris Agreement, the European Union has made commitments on behalf of its member states to reduce the emission of greenhouse gases by at least 40% by 2030 compared to the levels of 1990. The Netherlands supports this commitment, but states that it will be insufficient to keep the global average temperature well below 2 °C. For that reason, the Netherlands has an ambition of reducing greenhouse gas emissions by 49% by 2030. The Netherlands is in favor of an even more ambitious reduction of emissions of 55% by 2030, if this can be agreed upon on a European level.
Renewable energy and energy efficiency
The Netherlands supports the increase of the European 2030 renewable energy target to 32%. However, the Netherlands applies a bandwidth of 27 to 35% for the national target for renewable energy (previously defined targets are 14% by 2020 and 16% by 2023). The final target will be based on calculations of the most cost-efficient translation of the target of 49% reduction in carbon emissions to a share of renewable energy.
The indicative national contribution of the Netherlands to the European energy efficiency target of 32.5% is also conditioned on a cost-efficient package of measures capable of achieving a 49% reduction in carbon emissions by 2030. Despite of the bandwidth, the Netherlands claims to make a contribution to the European targets for renewable energy (32%) and energy efficiency (32.5%) that is above average.
The concrete measures in the Dutch NECP include the closing of all coal-fired plants, making the tax system greener and more sustainable, increasing offshore wind energy, making buildings more energy efficient and only new passenger cars with zero emissions being sold by 2030.
The Dutch government is planning close down all remaining five coal-fired plants no later than 2030. The Dutch government will be implementing this commitment by way of a bill that includes a ban on the use of coal as a fuel for the production of electricity as of 1 January 2030. This will ensure a significant contribution to the ambition set out to achieve a 49% reduction of carbon emissions by 2030.
The Dutch government will continue to increase the share of renewable energy in the energy mix between 2020 and 2030. The Netherlands has various mechanisms to stimulate renewable energy which will be maintained or reinforced to achieve the goals for 2030.
Under the Sustainable Energy Production Incentive (SDE+) grant scheme, producers are eligible to receive a subsidy for the sustainable energy that they produce. The SDE+ grant scheme reimburses the difference between the price of renewable energy generation and the market price of the energy supplied: the non-profitable share. As of 2020, the SDE+ grant scheme is set to be expanded to also stimulate additional techniques that reduce carbon emissions, for example in industrial processes.
Aside from the more generic SDE+ grant scheme that stimulates various techniques for renewable energy, the Netherlands developed in recent years a specific policy for offshore wind energy. The initial target for offshore wind energy was set at 4.5 GW of installed capacity by 2023. The Offshore Wind Energy Roadmap 2030 intensifies this ambition. Between 2024 and 2030, offshore wind farms will be realized with an average expansion of 1 GW per year, resulting in 11.5 GW of installed capacity by 2030. In the years to come, new offshore areas will be designated as future zones for offshore wind energy. The most recent tender for offshore wind energy was won by a developer who intends to construct and operate the wind farm without a subsidy (excluding grid connection). At present, legislation is being amended to allow future permits for offshore wind farms to be tendered by way of an auction.
Renewable self-consumption is stimulated through a fiscal measure for solar panels used by small consumers; they can make use of the so-called netting scheme. The electricity that is fed back into the grid through renewable energy production is deducted from the electricity purchased from the grid. As a result, small consumers are not required to pay supply costs, energy tax, the surcharge for sustainable energy or VAT for the electricity purchased from the grid, insofar as this is offset with the electricity fed back to the grid. The netting scheme is to be replaced by a subsidy for feeding back energy with a lower financial incentive, which will be gradually phased out leading up to 2030.
The announced additional roll-out of offshore wind energy and the continued increase in the contribution of solar and other renewable energy will lead to a strong growth in the proportion of renewable electricity in national electricity production. By 2025, this proportion will have increased to around half, and it will be close to two-thirds by 2030. Conventional energy production from gas and from coal, will come under pressure. Under these circumstances, the Netherlands will increasingly be importing electricity on balance.
Energy efficiency of buildings
To increase energy efficiency and reduce the consumption of gas, the Dutch government is planning to disconnect a substantial percentage of buildings form the gas network so that these are no longer heated using natural gas. Improved isolation of buildings and the use of new efficient techniques such as heat pumps will substitute gas heating. Newly built houses will no longer be connected to the gas network automatically and municipalities will determine how sustainability is being achieved per neighborhood and what infrastructure is adequate.
The percentage of electric vehicles will be increased. The exact method of stimulation is yet to be set out. The government will adhere to the objectives outlined before, which includes the ambition to reduce average emissions from passenger cars by 44% by 2030 in respect of 2010. In 2030 a hundred percent of newly sold passenger cars should be cars with zero emissions.
Interconnectivity and system flexibility
The Netherlands has a relatively high level of interconnectivity. At the moment the Netherlands has an interconnection rate of 16% and therefore already meets the target for 2030 of 15% interconnective capacity. The Dutch electricity market is linked to four (to increase to five in 2019) neighboring countries. In the next ten years, interconnection capacity is expected to double from 5.5 GW in 2016 to 10.8 GW in 2025.
The Netherlands considers more flexibility in the system to be necessary as a result of a continuing increase of intermittent sources in the electricity system. The Netherlands will adapt the market regime in the coming years to allow further flexibility and to ensure small consumers are given better access to the market and market incentives.
The concept NECP of the Netherlands defines the framework and ambitions for the Dutch energy and climate policy for 2030 and beyond and describes the measures that already have been decided on. It lacks however sufficient concrete measures to achieve all ambitions. More concrete measures are currently being drawn up in the National Climate Agreement. In this agreement, the Dutch government wishes to make an agreement with local and regional authorities, businesses, nature and environmental organizations, trade unions and other social stakeholders with regard to the measures that are required to achieve a 49% reduction of greenhouse gas emissions by 2030 and to put the Netherlands on track for the 2050 target.
Rens van de Ven | Energy Consultant