2016 Power Generation By Type
|Gross Generation (TWh)
|Of which gas
|Of which coal
|Of which wind
|Of which biomass/gas
|Of which nuclear
|Final Consumption (TWh)
Source: International Energy Agency, CBS, & CIA Factbook
|Consumption in Petajoules
|Net electricity imports
Source: ECN Dutch National Energy Outlook
|Length of grid
|Electrical Substations (high voltage)
Political and Economic Background:
Due to its open market and integrated supply chains, the Netherlands is an important Europe hub for the global energy trade. As Europe’s second-largest producer of natural gas, the Netherlands faces declining production and uncertain prospects for unconventional gas. Developing the remaining natural gas potential, market integration, and ensuring the security of supply and resilience of energy infrastructure during the transition are top priorities. The Netherlands stimulates energy efficiency and innovation in energy-intensive industries along the whole supply chain, notably in the Dutch refining, petrochemical and agriculture sectors, a practice that contributes to industrial competitiveness. Despite successful decoupling of greenhouse-gas emissions from economic growth between 1990 and 2012, the Netherlands remains one of the most fossil-fuel- and CO2-intensive economies in Europe.
The primary focus is carbon reduction. To achieve this in a financially viable manner, the Dutch government created an Energy Agreement for Sustainable Growth, see below.
While the Netherlands is not on track to meet the carbon reduction goals set by the EU, it is one of the first EU countries to announce plans to eliminate natural gas from the energy mix. The current government coalition is committed to a 49 percent reduction in carbon emissions by 2030, which would surpass the current EU target. This goal will be reached primarily through North Sea wind farms and solar farms. Other important aspects of Dutch government policy include closing the nuclear power plant within the next decade, and increased use of capture and storage of much of the CO2 released by factories, power plants, and waste incinerators. The government plans to achieve this by imposing a carbon floor by 2020. The projected renewable energy goal set by the EU will not be met in 2020, but the 2023 goal of 16.7 percent may be met. Looking towards the future, investments will be made in things such as capital goods with longevity i.e. dwellings, electricity production, and energy infrastructure.
Energy Agreement for Sustainable Growth (2013-2023)
The Energy Agreement for Sustainable Growth, concluded by the government with employers, trade unions, environmental organizations and others, contains provisions on energy conservation, boosting energy from renewable sources and job creation. The government regards this agreement as a major step towards a fully sustainable energy supply.
Main provisions of the agreement:
- A thousand new wind turbines are to be built. By 2020, 14 percent of all energy will be generated from renewable sources, rising to 16 percent by 2023.
- The government is investing €400 million in insulating rented homes. As well as reducing heating costs and emissions of the greenhouse gas CO2. Taken together, the investments in energy from renewable sources and energy conservation will create 15,000 jobs.
- An energy label for every home. All privately owned and rented homes have been assigned an energy label, indicating the home’s energy efficiency and raising awareness of energy consumption.
- Tighter agreements on emissions trading. Tighter European agreements are needed to reduce greenhouse gas emissions. The government wants the EU to take steps to improve the CO2 emissions trading system, to reduce emissions by at least 80 percent by 2050.
- National Energy Saving Fund. Homeowners can take out low-interest loans to fund energy-saving measures, financed by the National Energy Saving Fund, which has a budget of €600 million.
- Tax breaks for local clean energy initiatives. Local initiatives in which people club together to generate electricity from sustainable resources will be rewarded with lower energy tax rates for those involved. This may for example include residents who club together to invest in a large solar panel system, placed on the roof of a school or warehouse.
In 2018, more than 18 billion kilowatt-hours of electricity were produced from wind energy,
hydropower, solar energy and biomass. That is 15 percent of the total electricity usage. In 2017 this share was 14 percent. The production of wind turbines (adjusted for wind) increased by 4 percent in 2018 and that is virtually equal to the growth of the capacity of the wind farm in the Netherlands. The production of electricity from biomass increased by 2 percent. Substantial increases in production power plants and waste processing installations were largely destroyed done by production reductions at CHP installations of companies. The production of solar power increased by 45 percent due to strong capacity growth. The contribution of solar power to total electricity consumption is growing and was 3 percent in 2018.
The consumption of renewable energy for heat rose by 5 percent in 2018 compared to 2017. The share of renewable energy in heat supply grew to 6.3 percent. The increase in the use of renewable heat was mainly due to this an increase in heat production at companies with heat boilers and biomass combined heat and power plants that reduced electricity production for this purpose.
In addition, the use of outside air heat with heat pumps made more heat produced. An important decrease in heat production took place at the waste processing installations; these installations produced more electricity in 2018 cost of heat. In transport, renewable energy accounted for almost 10 percent of the total energy consumption for transport; Consumption has increased 65 percent compared to 2017.
This remarkable increase is partly the result of a tightening of the legislation around the mandatory blending of biofuels. Renewable energy for transport exists mainly from biotransport fuels. About 70 percent of the biofuels used environmentally good biofuels were double, according to European agreements when calculating the share of renewable energy for transport.
The Dutch power sector is unbundled, with a transmission system operator (TSO), seven Distribution Service Operators (DSO), over 25 producers, and 35 electricity retailers. Dutch law requires ownership unbundling for both transmission and distribution. There are more than of 8 million connections in the Netherlands, with a total current demand of some 118.6 TWh. A few large companies dominate distribution, production, and supply. Tennet, the TSO, owns the electricity transmission network and the seven DSOs own the distribution networks – they are: CoteQ Netbeheer, Enduris, Enexis, Liander, RENDO Netwerken, Stedin and Westland Infra.
The energy supply in the Netherlands is determined by location. The northern part of the country is rich in natural gas and as a result, most Dutch power plants run on gas. The Dutch market is currently dominated by fossil fuels in terms of power generation.
In recent years the Netherlands has lagged other EU countries in terms of renewable energy. This is partly due to the absence of large-scale hydro generation, solar usage, and onshore wind (due to population density). At present, most renewable energy is derived from biomass.
The Dutch electricity system is dominated by fossil fuel capacity, mainly natural gas and coal, which accounts for approximately 31.25 GW. Renewable energy comes mainly from biofuels, waste, and wind. Solar, hydro, and nuclear energy play a very small role in renewable resource generation in the Netherlands.
The announced additional roll-out of offshore wind over the period 2023-2030 and the continued increase in the contribution of solar power will lead to 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 production from gas, and later also from coal, will come under pressure. In these circumstances, the Netherlands will increasingly become a net power exporter.
Nuclear energy accounts for 10 percent of electricity used in the Netherlands. There is currently one operational nuclear power plant in the country, Borssele. It has an annual output of about 4 billion kWh, which provides enough electricity to more than a million homes. The government has no plans to build more nuclear power plants.
Coal is used to produce electricity, iron and steel. Coal consumption for electricity production
increased sharply up to and including 2015 as new coal-fired power stations were gradually brought into service. Partly due to the decommissioning of three old coal-fired power stations at the end of 2015 and two in mid-2017, consumption in 2016 and 2017 once again fell by a quarter (to 10.2 billion kg). Coal consumption for iron and steel production has remained reasonably stable at around 4.5 billion kg, except for a dip in the years after the financial crisis of 2008.
As a result of safety risks associated with earthquakes caused by gas production in Groningen, the government decided to end gas extraction from the Groningen gas field, one of the world’s largest natural gas reserves. In 2017 only 44 billion cubic meters of natural gas was extracted, almost half the amount in 2013. Over the next 4-5 years the extraction rate will be halved and by 2030 it will come to a complete halt. As gas currently supplies 90 percent of Dutch households, the government plans to build a nitrogen plant to convert imported gas into fuel, resulting in a 7 billion cubic meter cut in demand for Groningen gas.
By 2021, the government hopes to have all new houses and buildings disconnected from the natural gas grid and in return, connected to district heating or have them be all-electric. In addition, the aim is to have around 30,000 to 50,000 houses every year convert from the gas grid to either district heating or become all-electric. Due to the issues concerning gas extraction, the Netherlands is no longer expected to be a net exporter of gas but rather a net importer by 2025.
Biomass is the largest source of renewable energy. The Dutch government supports, via means such as the SDE (Simulation of Sustainable Energy Production), the development of new technologies for generating biomass energy. Biomass is a part of the government’s plan to phase out nuclear power plants by 2024. This will also keep the power plants viable until their closure.
In 2016, more than 60 percent of renewable energy came from biomass. In 2023, this is expected to drop to just under 50 percent. The importance of biomass is often underestimated: by burning wood in wood heaters and open fireplaces, households make a much greater contribution to the consumption of renewable energy than through the harnessing of solar energy with solar panels and solar boilers.
Biofuels: The Netherlands is implementing the EU Directive by gradually increasing the proportion of energy from renewable sources such as biofuels, biogas and electricity for road transport. The aim is to build confidence that biofuels are a viable energy source and to move gradually towards the EU target of a 10 percent share of biofuels by 2020 in the transport sector.
Roughly 9.6 percent of the average annual electricity demand is provided by wind energy. By the end of 2015, there were around 2,525 onshore wind turbines which generated 3,000 MW of electricity; this was only 5 percent of the Netherlands’ total requirement. By 2020, the Netherlands needs to have an onshore wind capacity of 6,000 MW. This means an increase upwards of 3,000 MW needs to be established: 1,000-1,500 new onshore wind turbines are necessary.
For onshore wind energy, limited public support is slowing down growth in the short term and
long-term projections have been adjusted downwards. The target of 6,000 megawatts of installed capacity will not be achieved, with a projection of around 4,750 megawatts by 2020. It is expected that extra efforts will be required to achieve that target after 2020. In terms of offshore wind energy, the NEO 2016 assumed that a ‘catch-up’ would occur after the delay in the implementation of the Power Act, but this has not materialized. As a result, the estimated contribution of offshore wind energy in 2020 has been adjusted downwards.
The Netherlands issued its first subsidy-free tender (HKZ 1&2) at the end of 2017 in hopes of capitalizing on the already booming renewable energy sector. Companies that could fund the project themselves could participate. This was to keep costs low in the transition to more
renewable energy. In September 2018, Vattenfall was granted permits to build the first phase, HKZ 1&2. The wind farms will have a capacity of approximately 1.5 GW combined and will become the two first non-subsidized offshore wind farms in the world when commissioned. Vattenfall also won the tender for the second phase of the Dutch offshore wind farm Hollandse Kust Zuid (HKZ) 3&4 in July of 2019. Construction of HKZ 3&4 is scheduled to take place in 2022 and will be fully operational within 5 years. In total, HKZ 1 - 4 will produce renewable energy to up to 3 million Dutch homes.
Currently, there are 6 offshore wind farms off the coast of the Netherlands: Egmond aan Zee (108 MW), Eneco Lucterduinen (129 MW), Windpark Friesland (320 MW – to be built by 2021), Gemini (600 MW), Irene Vorrink (17 MW), Lely (2 MW), and Princess Amalia (120 MW).
Solar energy has gained popularity in recent years. The installation of three million new panels in 2018 resulted in total solar capacity of 2,902 MWp. The government plans to build an offshore solar power farm. This solar panel farm is expected to be up and running in approximately three years and will provide energy to the Dutch mainland. A pilot test will be conducted in the summer nine miles off the coast of The Hague. The panels will be connected to the already existing wind turbines in the North Sea which will make transporting energy easier. In 2017, the Netherlands added 853 MW worth of solar power systems.
Opportunities for U.S. Exporters:
The development of smart energy networks in the Netherlands is in full swing. The Dutch government is accelerating the collaboration concerning smart grids with its Intelligent Grids Innovation Program. In order to provide a powerful boost to large-scale application, this program is supporting 94 pilot projects in residential districts, city centers, office parks, industrial estates, and agricultural areas. The Dutch Ministry of Economic Affairs produced a report listing all players in the Dutch smart grid sector. The report is available on request from: firstname.lastname@example.org
The electricity infrastructure requires major investments. In the coming decades, a large proportion of the grids will need to be replaced as their technical life will have passed and adaptation will be needed due to new developments. As a result of market integration, cross-border electricity flows are increasing, which requires additional interconnection capacity. The increase in sustainable and/or decentralized electricity production, the rise of hybrid and electric cars and the development of storage systems also require major adjustments and expansion of the network. Large-scale capture, transport and storage of CO2 will require an entirely new infrastructure to be developed. This also applies to the use of the various energy options of the North Sea. This too will require major investments in the short term.
The Dutch government has committed to increase wind energy, aiming to have 4.5 GW offshore wind installed by 2023 and 6 GW of onshore wind by 2020. The long-term road map proposes a total of 11.5 GW of offshore wind by 2030.
A list of 25 Dutch grid infrastructure upgrade projects can be found here: