The hurdle race for the energy transition

Report on the Netherlands’ progress in sustainable energy and climate protection

Renewable energy generation in the Netherlands is picking up pace, energy efficiency continues to improve and energy consumption is declining. Greenhouse gas emissions in the Netherlands will fall substantially before 2030. Employment in sustainable energy activities is rising. At a decentralised level, municipal and provincial authorities are increasingly planning the energy transition process together. Nevertheless, reality is obstinate as several policy targets on energy and climate will not be met by 2020. Furthermore, developments in the Dutch energy sector and its emissions turn out to be difficult to control because this sector is inextricably linked to global conditions. These hurdles on the race track towards 2020 and a sustainable energy supply in the long term are asking for clear policy choices in the coming years.

These are the main conclusions and observations in the National Energy Outlook (NEO) 2017, a report jointly compiled by the Energy research Centre of the Netherlands (ECN), the Netherlands Environmental Assessment Agency (PBL) and Statistics Netherlands (CBS). The report provides a factual basis for political decisionmaking and the social debate which is currently held in the Netherlands on energy and climate. The NEO can serve as a resource for the current Rutte III government coalition in developing new policies, for example. Aside from presenting the key energy and climate targets, the NEO outlines new energy savings policies in the built environment and the manufacturing industry. It also provides an initial overview of developments at local and regional government level. In addition, developments in the Dutch electricity sector are assessed on the basis of various possible scenarios for developments taking place abroad. This illustrates the fact that the estimates tend to go hand in hand with great uncertainties.

Vigorous growth in renewable energy: 2020 target out of reach, 2023 target looks achievable

As indicated in the NEO, the share of renewable energy is expected to grow from 6 percent in 2016 to 12.4 percent in 2020 and to 16.7 percent in 2023. When calculated based on ‘actual production’, this would amount to 13.0 and 17.3 percent respectively. This means that the 2020 target of 14 percent will not be made, but the target for 2023 of 16 percent does appear to be within reach. As for 2020, there have been both windfalls and setbacks since the previous NEO. For instance, higher growth was projected in solar energy against a slightly lower production of wind energy. In the period up to 2030, the renewable energy share may increase to around 24 percent. However, this presupposes a continuation of the current so-called ‘Stimulation of Sustainable Energy Production operating grant’ (SDE+) beyond 2020.

Roughly half of all electricity from renewable sources by 2025

The NEO foresees a rapid increase of renewable energy consumption. By 2025, renewable energy may account for around half of total energy production in the Netherlands, which may even increase to around two-thirds of total energy production by the year 2030. Here as well, the basic assumption is that the current SDE+ programme is continued after 2020. Markedly slower progress is expected in renewable heat generation and the use of sustainable (bio)fuels.

Expected drop in greenhouse gas emissions still 23 percent by 2020, but highly uncertain

Just as in the previous NEO, greenhouse gas emissions are projected to decline by 23 percent between 1990 and 2020. This falls short of the required 25 percent reduction that was imposed on the Dutch government in the Urgenda Climate Case (2015). However, there is a significant margin of error ranging between 19 and 27 percent, stemming partly from an uncertain future trend in the use of conventional power plants. This use in turn depends on unforeseeable developments in electricity production by neighbouring countries. In 2030, national greenhouse gas emissions are expected to be 31 percent lower relative to 1990, with a margin of error ranging from 19 to 38 percent. This considerable drop in the long term is still based on the assumption that the current SDE+ programme is maintained beyond 2020.

Improved energy efficiency: pluses and minuses mapped out

An energy-saving effect of 75 PetaJoule in 2020 is expected as a result of measures from the Energy Agreement. As a result, it looks unlikely that the target of 100 PJ improvement is achieved. New measures set out for the energy intensive industries, households and social housing sector are expected to improve efficiency further by 22 PJ. On the other hand, estimates of savings from several other measures in the Energy Agreement have been revised downwards to 15 PJ. On balance, total savings would thus be 7 PJ higher than was foreseen in the previous NEO (2016).

Roles are reversed: Netherlands net importer of natural gas and net exporter of electricity by around 2025

Due to the curtailment in natural gas production, the Netherlands is expected to become a net importer of natural gas by around 2025. Just as in the previous NEO, the Netherlands is still expected to become a net exporter of electricity at some point between 2020 and 2025.

Job growth in sustainable energy sector compensates for loss in non-sustainable energy sector

Between 2014 and 2016, employment generated by the sustainable energy sector increased from 46 thousand to 52 thousand man-years. Further job growth is expected to around 64 thousand man-years in 2020. This growth is mainly due to new investments in renewable energy and energy efficiency. Conversely, employment in the non-sustainable (conventional) energy sector is expected to decline from 73 thousand man-years in 2016 to around 62 thousand in 2020. By 2020, the increased employment in sustainable energy-related activities will roughly compensate for the decrease in non-sustainable activities.