The Dutch government has presented a long-term energy plan that stipulates that no new cars with combustion engines may be sold from 2035 on. In addition, in the Netherlands – for over 50 years the largest natural gas producer in the EU – all houses will be disconnected from the gas grid by 2050. The plan has broad parliamentary support – in fact, many political parties believe it does not go far enough.
Perhaps the most striking part of the “energy agenda” presented by Dutch Minister of Economic Affairs Henk Kamp on Wednesday 7 December (see here for more information in Dutch) is that it received such a critical response from both green NGOs and left-leaning parties in Parliament. They complained that it is not ambitious enough.
More neutral observers may feel differently. With this plan, the Netherlands – home country of Shell, one of the largest oil and gas companies in the world – may be one of the first countries in the world to put a specific date to the end of the combustion engine car. The “agenda” states that from 2035 on all cars sold should be zero-emission, i.e. either electric or hydrogen-driven.
A majority in the Dutch Parliament had earlier asked for 2025 as a starting date for this transport revolution, but according to Kamp – a Minister for the right-wing VVD, which is part of a coalition government with the Dutch Labour party PvdA – this is too early.
Another revolution is to take place in the built environment. Newly built houses will not be connected to the gas grid anymore, according to the plan. Existing houses will be gradually disconnected from the gas grid. By 2050 houses will not use gas at all anymore. They will be heated in part with waste heat from industrial processes as well as geothermal sources. A new infrastructure for waste heat distribution will be built for this. Local governments are assigned a leading role in this transition process.
For the Netherlands the change will be huge. Since the early 1960s, the country has been the largest natural gas producer in the EU and a major gas exporter. It probably has the most extensive gas distribution infrastructure in the world. Virtually all houses are connected to the gas grid – indeed, they must be, according to the law.
The energy-intensive industry will not be able to do entirely without gas, says Kamp. For this reason, the Netherlands will pursue possibilities for carbon capture and storage (CCS).
The “energy agenda” comes with a cost-benefit analysis prepared by McKinsey (English version here). This concludes that: “Reducing the energy system’s CO2 emissions while accommodating a 37 percent increase in the demand for electric power represents a major challenge. We have modeled one way of meeting this challenge: by increasing the system’s renewable power generation capacity to 80 percent and introducing flexibility measures, such as demand-side management and energy storage. All in all this would lower (energetic) CO2 emissions by about 55 percent. These changes will require capital and operational expenditures of approx. EUR 10 billion per year. This amounts to some EUR 2.5 billion more than for a fossil-fuel-reliant system.”
The new Dutch “energy agenda” says that European energy and climate policy should be CO2-driven. Targets for energy efficiency and renewable energy should be secondary to CO2 reduction targets. The EU Emission Trading System is “in principle a good instrument” to reduce CO2 emissions, says the plan, although the Dutch government acknowledges that CO2 prices in the EU ETS are “too low” and will likely remain so for some time to come. The Netherlands wants to reinforce the ETS by an annual reduction of the emission cap and reducing the surplus of allowances in the system.
The energy agenda nevertheless promises continued support for renewable energy and energy efficiency. In particular, it wants to continue the “large scale expansion” of offshore wind in the North Sea after the current stimulus plan – which runs till 2023 – ends.
However, it does not include any plans to close existing coal-power stations, which has been demanded by NGO’s and left-leaning parties.
Dutch energy and climate policy is currently driven by a broadly based “energy accord”, which was signed in September 2013 by the government with forty organisations, including NGO’s and industry associations, and which runs until 2023. The new “energy agenda” is intended as a long-term perspective for the period after 2023.
The only party to have reacted negatively to the green ambitions of the Dutch government is the nationalist right-wing party of Geert Wilders, the PVV. A spokesman for the PVV has said the plan is “simply insane”, because it will cost too much. The PVV wants to see construction of thorium-based nuclear power stations.
This article was amended on 14 December to correct the earlier assertion that the costs calculated by McKinsey pertained only to the switch from gas to waste heat infrastructure. The current version of the article refers directly to McKinsey’s cost estimate.
“According to McKinsey the costs for this gigantic operation will be around €200 billion over a period of 20 years (2020-2040).”
€200 billion over 20 years means €10 billion per year. With approximately 7.5 million households this equates to more than €1000 per household per year for the entire 20 year period.
As the typical net income to spend in the Netherlands is about €20.000 euro, this would equate to a 20 year structural loss of income of more than 5%.
And that is just for stepping away from the gas infrastructure.
In a properly functioning democracy I don’t see this happening. The real support of the people for paying for such measures is quite limited, and much smaller than this more than €1000/year, all research shows.
Jan Veselý says
Well, you have costs. Now, continue with benefits to have full equation.
The national election campaign for our parliament (March 2017) took off! One of the balloons to attract more voters away from the middle and left.
Reynier Funke says
The Dutch track record the past 10 years on renewables is compared to other EU countries pretty poor. This new plan seems more wishful thinking than what can be realized in practice. Comparing the annual charge for the in comparison less ambitious “Energiewende” (30% electricity renewable after good 15 years) the cost estimate for such a transition in 20 years seems low. Living since 1994 in Germany, but still a Dutch citizen, my new compatriots in the office will be joking which “coffeeshop” the report’s editors visited before they published it!
Karel Beckman says
The cost estimate in the article is only for the construction of a new waste heat infrastructure and replacement of the gas distribution infrastructure; this has nothing to do with what the government spends on renewable energy stimulation (about 6 billion euros annually at the moment). It may be true that the Netherlands does not have as much renewable energy as Germany, but if you look at the Energie Agenda report, which you can download here https://www.rijksoverheid.nl/documenten/rapporten/2016/12/07/ea, on page 7 you will see that the Netherlands is successful in reducing CO2 emissions. More successful than Germany? With the still large coal power production in Germany, including brown coal, and the huge problems building high-voltage lines to the south, not to mention the sheer costs of the Energiewende, are you sure that German energy policy wasn’t made in a Dutch coffeeshop?
Math Geurts says
“The cost estimate in the article is only for the construction of a new waste heat infrastructure and replacement of the gas distribution infrastructure”
Karel, are you sure about that?
Karel Beckman says
For this claim I based myself on a “quality” newspaper, but I see I am wrong.
Fortunately, the McKinsey report mentioned in the Energie Agenda is available in English on the internet, see here: http://www.mckinsey.com/global-themes/europe/accelerating-the-energy-transition-cost-or-opportunity
Best check it out yourself before I simplify it too much.
So this makes Mr Funke’s claim that the costs are low even more unfounded.
The transition apparently does not have to cost that much, if we go by McKinsey.
Math Geurts says
Once again this proves that “quality” newspapers are not necessarely quality in their articles about energy, whether grey or green. EnergyPost has to do its own homework.
I also do not understand mr Funkes contribution. There are indeed many remarkable weaknesses in Germany’s energy policy. If I ware a German I would not consider the high costs as a joke.
Karel Beckman says
I made the mistake in my comment, not in my article, which does not specify the exact nature of the costs. In the article I relied on the original plan, not on reports in other sources.
Math Geurts says
The problem with Germany’s energy transition:
“We find that almost all targets of the German ‘Energiewende’ are not reached, for the case in which no further measures are undertaken. In particular reductions in GHG emissions fall short to the target value. Contrary to the negative results, e.g., regarding GHG-emissions as well as gross electricity consumption, generation from renewable energy sources will exceed the policy’s target value.”
“The reference forecast of the German energy transition—An outlook on electricity markets”
The authors in your reference consider the reduction of GHG the main target of the Energiewende (which is not correct) and do a forecast, which may or may not be correct.
The targets of the Energiewende which started in 2000 are:
1. All nuclear out asap (will be realized in 2022)
2. 80% renewable electricity and 60 reneable regarding all energy in 2050. Regarding electricity they are clearly ahead of that scenario. Little doubt they will reach that target.
Reduction of CO2 emissions is derived from these prime targets.
Math Geurts says
At least outside Germany almost everybody will agree with these German authors that reducing GHG-emissions to fight climate change has the highest priority.
Ferdinand Engelbeen says
Something forgotten in all these discussions about targets is the necessary backup for the cases that there is no wind and little sun, like frequently happens during days mid winter under a high pressure system, when demand is highest and peaks are after sunset…
The Netherlands has virtually zero capacity for large power storage. Europe has some, but if you want more renewable energy, you need literally hundreds of times more storage, even without most cars driving on batteries.
Indeed Germany still has its backup as the installed capacity of coal and browncoal plants is sufficient for 100% supply. But when the sun shines and lots of wind power come in, they dump their surplus in all neighbourhing countries, where they suppress the own plant production. If renewables expand in whole Europe, there will be extreme problems in reliability of the network…
The cost of the 100% backup, including a large % of “spinning reserve”, as the wind can go down very rapidly in a whole country, must be added to the whole costs of transition, but I never see that mentioned…
Netherlands has an huge capacity for large renewable energy storage in the salt domes. Thanks to the seasonal storage in those domes, our gas processing plant capacity is substantially less than the needed peak capacity in winter.
German experience shows that storage is not needed until wind+solar share is ~35%. Germany expects to have viable Power-to-Gas ready for large rollout in 2025: https://goo.gl/hJf093
We in NL won’t need it until earliest 2035 as we are far behind.
Note that we should then also consider:
– the widely expected continuing fast price decrease of batteries (~10%/a simlar as with PV panels).
– the fast increasing cost-effectiveness of long distance high voltage DC lines. So we can arrange additional connection to Norwegian hydro (they welcome it), etc.
Ferdinand Engelbeen says
Rather optimisitic film you linked to… They want to use the existing natural gas infrastructure as “storage” by adding (maximum) 10% of hydrogen…
Storing hydrogen in salt domes indeed is a good way to buffer production and demand. Still there is the huge loss during conversion from hydrogen to power. At the real cost of wind power, about twice “conventional” power, that gives again a doubling of the production costs. For solar, still much worse, despite the spectacular drop in unit prices, but indeed there we may get a break-even in the (far) future is the cells can get a better yield.
Germany currently has already 100% of peak use installed capacity of wind and solar, but if you look at what it really does produce in the past two weeks: Woche (week) 50-51, about half the time it is less than 10% of what is needed. See:
(very interesting site BTW, also for imports and exports)
That means that you need 90% extra on other days and storage capacity of gigantic proportions if you want to buffer that for weeks or seasons.
The European Union of Physical Engineers has calculated that you need 600 times the current hydro storage capacity in Europe, if you want 100% renewables or some 800 Tesla wall batteries per household…
Norway will be of little help, as they too have plans to drive all electric, but just need all their water for total consumption today. In very dry years (1976?) they had even a slight import… Denmark (and Germany) already use them as buffer: low price export, high price import, the difference is paid by the households – not the industry…
“…real cost of wind power, about twice “conventional” power…”
No longer true! And costs decreases continue!
Conventional cost ~€45/MWh (equals ~ operating costs only of Borssele NPP; hence it is in trouble as av. whole sale prices decrease towards ~€30/MWh).
Our (NL) recent offshore tender was won for €55/MWh during 15yrs, thereafter whole sale (estimate €29/MWh) for av. 15yrs. So the av. offshore wind price is already <€45. And:
– onshore wind is cheaper.
– offshore wind costs will decrease further with the coming 10-12MW wind turbines.
PtG operates when there is overproduction so whole sale price 5cnt/KWh.
The difference is ~ enough to cover the costs and efficiency losses of the PtG=>storage=>GtP operation, considering the widely expected further efficiency improvements (also in fuel cells).
Hence Germany’s (dena) expectations.
Our earth cavities have more than enough space to store all needed during a year (Germany has similar and stores massive amounts of Russian gas).
Tesla batteries are not relevant as those are meant for covering the evening after sunny days in USA.
The biggest German utilities (RWE, E.on) clearly expect similar, as they are getting rid of all their classic power plants! Classic power plants cannot compete at a price level of ~€30/MWh (except the new plants at the lignite mines; for the time being).
Ferdinand Engelbeen says
Still the €45/MWh and €29/MWh is a form of heavy subsidy for wind generation, as the market price at the moment there is a lot of wind and solar power indeed is practically near zero/MWh, even negative to get rid of it, but one must pay the full price for wind generation, which has priority on the network… Who pays the difference?
The average nameplate yield of off-shore windmills is ~40%, on land ~25%. Thus one need to install 60-75% overcapacity which all must be stored for days to seasons…
The capacity of the pumped storage in Belgium is good for ~1100 MW during maximum 5 hours, that is good for ~10% of peak power use in winter. That storage is from lakes with about 8.5 million m3 of water with a difference of ~250 meters, between upper and lower lakes where the lower lake is ~71 ha.
I haven’t calculated how much cave storage you need to store all the necessary hydrogen for windstill, low solar days in winter, but I fear that you need about all the underground of the Netherlands…
Math Geurts says
Indeed: the most striking part of the “energy agenda” is …. that it received such a critical response from both green NGOs and left-leaning parties in Parliament. They complained that it is not ambitious enough.
Green NGO’s and left-leaning parties are indeed very ambitious. They support an energy transition without onshore wind. In dutch http://www.terapelercourant.nl/nieuws/48944/motie-tweede-kamer-is-doorbraak-om-van-wind-naar-solar-te-gaan/
Far from the equator solar does not match at all with P2G. http://www.fze.uni-saarland.de/AKE_Archiv/DPG2015-AKE_Berlin/Vortraege/DPG2015_AKE9.1_Waidhas_P2G-Economics.pdf