Renewable energy

The share of renewable energy sources in Dutch final energy consumption increased from 1.6 percent in 2000 to 6.0 percent in 2016. Renewable energy is primarily produced from biomass, but wind energy is becoming more and more important.

The share of renewable energy is defined as the percentage of total gross final energy consumption accounted for by renewable energy. Apart from biomass, wind, geothermal heat and solar energy, renewable energy sources include hydropower and aerothermal heat.

The issue

The production of renewable energy plays a key role in greening the energy sector and therefore in the energy supply for the whole economy. Renewable energy together with energy efficiency reduces carbon dioxide emissions. It also improves energy security, because renewable energy is either produced locally or imported from other regions than those with fossil fuels. However, renewable energy is more expensive than fossil energy and needs government support in the form of subsidies or obligations.

Analysis

Between 2003 and 2009, the share of renewable energy rose due to subsidies for the production of renewable electricity and the introduction of the obligation for suppliers of petrol and diesel to blend in biofuel. Growth slowed down between 2010 and 2013, partly because subsidies for new projects were not available between 2006 and 2008, which hampered the initiation of new projects. The budget for subsidies in the new subsidy scheme that started in 2008 almost tripled in 2016 to 9 billion euros. There is however no immediate effect of this budget increase, as it takes time to realise new projects. In 2016, the share of renewable energy rose only slightly, from 5.8 to 6.0 percent. The rise was also limited by the increase in total energy consumption. According to calculations by PBL (the Netherlands Environmental Assessment Agency) and ECN (the Energy Research Centre of the Netherlands) for the Netherlands National Energy Outlook (ECN, PBL, CBS and RVO, 2017), the current and foreseen policy guidelines embedded in the Dutch National Energy Agreement may lead to a renewable energy share of 12 percent by 2020 and 17 percent by 2023. This would imply that the EU Renewable Energy Directive target set for the Netherlands, namely of 14 percent by 2020, will not be met in time.

International comparison

The share of renewable energy in total gross energy consumption is relatively small in the Netherlands compared to other European countries. The Netherlands ranks second from the bottom among the 23 OECD countries; 6.0 percent of all energy consumption in the Netherlands is produced from renewable sources (2016); Sweden ranks highest with 54 percent. There are three reasons for the low ranking of the Netherlands. Firstly, there is little hydropower due to the slow movement of rivers. Secondly, households rarely use wood to heat their houses simply because most households are connected to the gas network. Thirdly, government support for renewably energy elsewhere has been much more generous than in the Netherlands in past years.