This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview

The primary focus of Dutch energy policy is carbon reduction through a so-called Energy Transition.  While the Netherlands is not on track to meet the 2020 renewable energy goals set by the EU, it is one of the first EU countries to announce plans to eliminate natural gas from its 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 the construction of new off-shore solar and wind farms in the North Sea.  Other important aspects of Dutch government policy include closing the Netherlands’ sole nuclear power plant by 2024, and encouraging increased use of carbon capture and storage (CCS) technologies by factories, power plants, and waste incinerators.  Looking towards the future, the Netherlands intends to invest in capital goods such as  built infrastructure, electricity production, and energy infrastructure to promote longevity.

The Dutch power sector is unbundled, led by a transmission system operator (TSO), eight 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 eight million connections in the Netherlands, with a total current demand of 118.6 terra watts (TWh).  A few large companies dominate distribution, production, and supply.

The Dutch electricity system mostly uses fossil fuels for power generation, mainly natural gas and coal, which accounts for approximately 31.25 gigawatts (GW).  northern part of the country is rich in natural gas and as a result, most Dutch power plants run on gas.  

The Netherlands lags many other EU countries in terms of renewable energy but is catching up - the share of sustainably generated electricity in total Dutch electricity consumption was 13.8 percent in 2017.  Renewable energy comes mainly from biofuels, waste, and wind.   Solar, hydro, and nuclear energy play a minor role.  Wind power has experienced the fastest growth in recent years, generating 9.6 TWh in 2017.  At present, 61 percent of all renewable energy is from biomass, the largest component of which is biofuels. 
Obstacles to growth of renewable energy include the absence of large-scale hydro generation, solar usage, and onshore wind (due to population density).  

Energy demand in the Netherlands is driven by the Energy Agreement for Sustainable Growth (2013-2023), an accord between the government, employers, trade unions, environmental organizations, and others.  It contains provisions on energy conservation, increased energy from renewable sources, and job creation.  The Agreement expects investments in energy from renewable sources and energy conservation will create 15,000 jobs.  The main provisions of the Agreement include:

    • The agreement aims to bring 1000 new (offshore?) wind turbines online, making 14 percent of all energy generated from renewable sources by 2020, rising to 16 percent by 2023.

    • The government will invest  €400 million in insulating rented homes, thereby reducing heating costs and CO2emissions of .              

    • The government will mandate energy labels for all privately owned and rented homes , indicating the home’s energy efficiency and raising awareness of energy consumption, thereby encouraging investment in energy-saving measures such an insulation and high-efficiency boilers.

    • The government will encourage tighter European agreements on emissions trading to reduce greenhouse gas emissions, such as improving the EU CO2 emissions trading system, to reduce emissions by at least 80 percent by 2050.

    • The government will establish a €600 million National Energy Saving Fund that will allow homeowners to take out low-interest loans to fund energy-saving measures.

    • The government will provide tax breaks for local clean energy initiatives from sustainable resources – like solar panels placed on roofs of public or private buildings.


Leading Sub-Sectors

In 2017, the use of renewables increased significantly, with the Netherlands adding 853 MW worth of solar power systems.  Three million solar panels were installed which increased solar energy total capacity by 60 percent to 2,902 MW.  Solar energy has gained popularity over the past few years.  The government plans to build an offshore solar power farm in the North Sea.  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 summer 2019 nine miles off the coast of The Hague.  The panels will be connected to already existing wind turbines in the North Sea which will make transporting energy easier.  


Biomass is the largest source of renewable energy.  The Dutch government supports development of new technologies for generating biomass energy through the Simulation of Sustainable Energy Production program.  Biomass will provide the new source of generation after the government closes the Dutch nuclear power plant by 2024.  

Roughly 9.6 percent of average annual electricity demand in the Netherlands is provided by wind energy, and due to ongoing wind farm creation particularly in the North Sea, wind power has experienced the fastest growth of any renewable sector and is expected to continue to rise in the coming years.  Wind generation rose by 30 percent from 7.9 TWh in 2016 to 9.6 TWh in 2017.  At the end of 2015, 2,525 onshore wind turbines generated 3,000 MW of electricity, which represents  only 5 percent of the Netherlands’ total requirement.  By 2020, the Netherlands needs onshore wind capacity of 6,000 MW –  an increase of 3,000 MW which could be attained through  1,000-1,500 new onshore wind turbines.

The Netherlands successfully issued its first and subsidy free tender for offshore wind energy in 2017 and 2019, signs of a booming renewable energy sector.  Currently, there are six offshore wind farms off the coast of the Netherlands:  Egmond aan Zee (108 MW), Eneco Lucterduinen (129 MW) Gemini (600 MW), Irene Vorrink (17 MW), Lely (2 MW), and Princess Amalia (120 MW).  The 320 MW Windpark Friesland is scheduled to come online by 2021, and the 760 MW Hollandse Kust Zuid 3 and 4 farms are supposed to come online by 2023.


Opportunities

The Dutch government’s commitment to increase to wind energy is an important opportunity for U.S. companies, with the aim is to have 4.5 GW of 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.

The Dutch government is accelerating collaboration on smart grids with its Intelligent Grids Innovation Program.  To provide a boost to large-scale application, this program has supported 94 pilot projects in residential districts, city centers, office parks, industrial estates, and agricultural areas.

There is a growing number of local energy cooperatives that focus on energy production (particularly collective solar and wind projects) and energy conservation.  In 2015, these cooperatives’ contributions represented only one percent of the total peak power of all solar panels in the Netherlands andthree percent of onshore wind energy capacity. These percentages are expected to rise sharply in the coming years, with installed capacity of collective wind projects expected to grow from 82 MW in 2015 to 232 MW by 2019.

The cut in natural gas production will result in a shift from low calorific gas to high calorific gas.  To meet demand, the Netherlands will need to import high calorific gas from Russia and LNG from Qatar, Australia and the United States.  Apart from LNG, there may also be opportunities for U.S. suppliers of products and technologies needed to convert from low to high calorific gas, including nitrogen plants, along with the need to look for cleaner sources of energy, possibly by using more biomass.

 

Web Resources

Market  Analyses:               Top Market Report - Smart Grids

Energy Market Resource Guide 2017

Netherlands National Energy Outlook 2017 Summary


SME Resources:                   Posted on the website of the Global Energy Team.

Contact:                                Alan Ras, Commercial Specialist                                  
U.S. Commercial Service – The Netherlands
alan.ras@trade.gov | +31 70 310 2418

 

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