A reliable and adequate supply of energy is crucial for a country’s economy and society. Most of the energy used across the world is still generated from coal, oil and gas. By 2030, everyone must have access to affordable, reliable and renewable energy. In the Netherlands the main SDG 7 themes are energy security, the transition to renewable energy, and energy efficiency.
Summary of results
- Most medium-term trends (2015-2022) are stable or point towards increasing well-being.
- As a result of the decision to phase out extraction from the Groningen gas field, the volume of responsibly extractable fossil reserves from an economic and social perspective has decreased sharply in recent years.
- Household energy use accounted for 3.8 percent of consumer spending in 2021. No figure is yet available for 2022. Although energy prices shot up in 2022, households restricted energy use and also received government compensation. It is therefore difficult to estimate how much of household budgets was spent on energy in 2022. Costs of installing solar panels and heat pumps are viewed as investment by households. These data are based on the national accounts, which include these installation costs in investment spending by households, not consumer spending.
- The Netherlands is mostly low or in the middle of the EU rankings. Positive exceptions in 2021 were for the relatively small share of energy costs in consumer spending, and the small percentage of households that cannot afford to heat their homes to a comfortable temperature. Again, no 2022 figures are available for these indicators.
Dashboard and indicators
The main SDG 7 themes in the Netherlands are energy security, transition to renewable energy and energy efficiency. These have been key topics of Dutch public and political debate in recent years, and have become very relevant amid the recent increase in geopolitical tensions. Dutch government has a combined climate (SDG 13) and energy policy in the context of the Climate Agreement, which also provides in a climate fund to increase sustainability in the economy and in society. More and more energy policies are also being coordinated at EU level, and this is also relevant to the Netherlands. Although SDG 7 indicators centre on renewable energy and energy efficiency, in the Netherlands affordability is also becoming more of an issue. To reflect this, we have added an indicator showing how many people can afford to heat their homes to a comfortable temperature. Many households have economised on heating costs in recent months because of the high energy prices, but this is not yet reflected in the medium-term trend, which covers 2015-2022.
The 2015-2022 trends of SDG 7 indicators are mostly moving towards the goals of the SDG agenda and rising or stable well-being: the increase in investment in renewable energy and energy savings as a percentage of GDP, for example, although this percentage was slightly lower in 2021 than in 2020. Other positive developments include higher employment in the renewable energy sector, the increase in installed capacity for renewable electricity, rising use of renewable energy, decreasing energy intensity of the economy, the downward trend in fossil fuel imports, and the downward trend in total per capita energy consumption. On the other hand, there are concerns about energy security, as domestic fossil reserves are decreasing. Dutch government are investing large sums to reduce the country’s dependence on energy imports.
Resources and opportunities
Combustion of fossil fuels in power plants, industry, car engines, and in homes and other buildings produces greenhouse gases (see also SDG 13 Climate action). The Dutch government has introduced an energy transition programme to reduce these emissions. More recently, this transition has also become relevant in terms of reducing dependency on imports of natural gas. The transition to renewable energy has had a positive effect on Dutch well-being here and now, and on the amounts of capital we shall be able to pass on to future generations (well-being later).
In practice, transition will often imply a switch to electrical installations, while extra demand for electricity is already putting pressure on the Dutch power grid. Electricity companies are going to have to invest substantially to expand this infrastructure, as otherwise supply will not be able to meet demand in the future. Energy security in the Netherlands has always been high. As domestic gas extraction in Groningen has been phased out, however, the Netherlands has become increasingly dependent on imported energy. The geopolitical tensions in Russia and Ukraine have served to underline this vulnerability, which countries across Europe are experiencing. As a consequence of the energy transition, more energy is now being produced from domestic (renewable) sources. The share of energy from abroad (all sources) fell to 56 percent in 2021. It should also be noted in this respect that the installations required to generate renewable energy also often come from outside the Netherlands, so here, too, there is an extent of dependency.
Resources and opportunities relate to the availability and affordability of energy and, with particular relevance to the Netherlands, investment in a sustainable energy supply. The trend in investment in renewable energy and energy savings is rising. In 2021, it amounted to 1.4 percent of GDP, compared with 1.1 percent at the beginning of the trend period in 2015. The level was higher in 2020, at 1.7 percent. Investment in renewable energy and energy savings include mainly installations for wind and solar energy, insulation, reuse and generation of heat from residual flows, solar, air or water, biomass, and energy-saving technology, for both households and industry. The sustainable energy sector accounted for 1.0 percent of total employment in 2021, up from 0.6 percent in 2015. Employment in this sector includes jobs at companies and organisations that produce renewable energy (operational phase), and at companies active in all the pre- and post-operational stages. The sustainable energy sector includes activities aimed at energy conservation, renewable energy systems and making fossil energy more sustainable (e.g. CO2 capture and storage).
Installed capacity for renewable electricity in the Netherlands rose substantially in the period described here: from 292 megawatts per million inhabitants in 2015 to 1,551 megawatts in 2022. The increase is partly due to the expansion of onshore and offshore wind farms, but the electrical capacity of installations for solar power also grew considerably. Ranking eighth in the EU27, the Netherlands occupied a middle position in 2021. This indicator refers to the maximum amount of electricity the installed capacity can produce, in ideal weather conditions. The actual amount of solar electricity produced is only 10 percent of this maximum, however, as the sun does not shine all year round. Offshore wind farms produced 37 percent of their maximum capacity. One megawatt of solar energy is therefore not directly comparable with one megawatt of offshore wind energy.
In addition to green trends, there is also one red trend in the category ‘resources and opportunities’. As the current Dutch energy supply is still largely based on fossil fuels, it is important that there are sufficient fossil reserves. Reserves are the amount of unextracted oil and gas still in the ground, while stocks are gas (domestic or imported) and oil that has been extracted and is ready for use. While reserves are important from a long-term perspective, stocks of natural gas and oil are essential for use during temporary disruptions of supply.
Responsibly extractable domestic gas reserves have decreased considerably in recent years, however, mainly because of the decision to terminate gas extraction in Groningen. The medium-term trend is downward. Phasing out gas extraction in Groningen, which was the result of earthquake risks and the compromised safety of people who live there, is not so favourable from the perspective of climate objectives. Given the continuing demand for natural gas, Groningen gas has a relatively better carbon footprint than, for example, Russian gas or liquid gas from the United States. A lot of effort has been put into building up stocks of natural gas in the past year. European countries agreed to fill their gas bunkers to a level of 80 percent before the start of winter. Most countries, including the Netherlands, achieved 90 percent.
A large majority of Dutch households use gas for hot water, to cook and to heat their homes. Added to this, the Netherlands has agreed to supply gas to German households. The European gas market is very interconnected, and countries have agreed to help each other out in times of shortage. The energy dependence of the EU as a whole is therefore also becoming a significant factor in this respect. In 2021 56 percent of Dutch energy came from imports; the trend of dependency on energy imports has turned from rising to neutral.
To get an idea of how affordability of energy is developing, we use the indicator household spending on energy as a percentage of total consumer spending, based on the national accounts. The percentage increased to 3.8 in 2021, pushed up by the strong increase in energy prices. No figure is available for 2022. Although energy prices rose substantially in 2022, households restricted their energy use and also received compensation from the government, so it is difficult to determine how much of their overall budget they spent on energy in 2022. Higher energy prices also pushed up inflation. Affordability of energy is becoming more of a cause for concern.
Use concerns amounts of energy used and saved. The trend in total per capita energy consumption is downward, but the Netherlands is near the bottom of the EU rankings. The production structure is a factor here: Dutch industry produces many energy-intensive products such as base metal and basic chemicals, which are then exported and processed further in other countries using less energy-intensive methods.
A more positive factor is the downward trend in energy intensity, a measure of the energy efficiency of the economy: how much energy an economy uses in relation to its size. Both a change in the production structure (shift from manufacturing to a services-based economy) and an improvement in energy efficiency (due to energy savings and insulation) have played a role in this. If energy-intensive production processes are moved to other countries, however, they may move to factories that are less efficient in terms of energy use. The net effect is then less favourable, but this is seen as a second-order effect.
In 2021, the Netherlands occupied an average position in the EU, although it should be noted that the composition of economic activities and energy use required for these activities may vary considerably from one country to another.
Outcomes relate to energy sustainability and wastage. The trend in imports of fossil fuels is now downward, no longer neutral, but the Netherlands continues to be a major importer of fossil fuels and was at the very bottom of the EU rankings in 2021. A large proportion of these imports are re-exported, however. Fossil fuel trade has a negative impact on well-being elsewhere; from the perspective of sustainability, large import volumes are therefore viewed as negative (depletion of natural capital in the country of origin).
A new indicator in this dashboard is the percentage of households who cannot afford to heat their homes to a comfortable temperature. In 2021 this was the case for 2.4 percent of households in the Netherlands, a low percentage from an EU perspective. Bulgaria has the most problems in this respect: nearly a quarter of households there cannot afford heat their homes. There are no figures yet for 2022, a year in which energy prices rose very substantially.
The share of renewable energy in total energy used in the Netherlands is growing steadily: from 5.7 percent at the beginning of the trend period in 2015 to 13.0 percent in 2021. No figures are available for 2022, but the target in the Energy Agreement is 16 percent. In an EU context the Netherlands has set itself the target of 27 percent of total energy from renewable sources in 2030. In spite of the upward trend, the Netherlands is still among the lowest ranking countries in the EU. Unlike governments in other countries, Germany for example, for years the Dutch government was reluctant to provide financial incentives for renewable energy. This has changed in recent years: the share of renewable energy in the Netherlands is growing substantially. It should also be noted with regard to the international comparison that the Netherlands can only make relatively limited use of hydropower and that Dutch households use relatively little wood for heating.
An efficient power grid is essential for society. The power outages indicator in the dashboard gives an indication of the reliability of the electricity supply. Overall, this is very high in the Netherlands: in 2021 households and business users had an average of 20 minutes without power as a result of outages. Partly due to the energy transition, demand for electricity is expected to increase sharply in the future.
Subjective assessment refers to satisfaction with the price and availability of energy. For this category, no indicators are currently available that comply with the quality criteria of this report.
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