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The Netherlands

Brief description:

Energy supply

Natural gas and oil dominate the Netherlands primary energy supply, with an aggregate 85% of total. The shares of oil and gas are much higher than the EU-27 average values (37% and 25% respectively). Solid fuel consumption accounts for a 11% of total supply. Renewable energy sources have increased significantly since 1990, although they account for only 4% of energy supply in 2008(below EU-27 average of 8%).

Electricity Generation

Electricity generation is largely based on natural gas with a significant share also contributed by solid fuels.

The participation of natural gas in electricity generation has been steadily increasing since 1990 and in 2004 accounted for 64% of total gross generation. Smaller shares of electricity are produced from nuclear, oil and renewable energy sources. Wind capacity has increased significantly over the past decade and the Netherlands are 6th among EU member states in terms of installed wind capacity with 1.2 GW installed at the end of 2005.

Domestic Energy Production

The Netherlands is the second largest producer of natural gas in the EU. Proved reserves were 1.45 trillion m3 at the end of 2005 (Source: BP Energy Statistics). Natural gas production showed an increase of 15% in 2004 compared to 2003. The Netherlands also produces small quantities of oil, nuclear and renewable energy (at an increasing rate).

GHG emission trends

Dutch GHG emissions was 209 Mt CO2-eq in 2008. Emissions per capita in the same year were 13 t CO2-eq. Hence, Dutch GHG emissions are now back on the same level as in 1990, after a slight increase with a peak in 1996-1997.

Energy and Climate Policy

Netherlands energy and climate policy is embedded in EU policies. The government has transposed the 2009 EU CO2 Storage Directive, with amendments to its Mining Act and decrees dealing with environmental impact and permits coming into force in September 2011. As of July 2012, legislation to amend the Civil Code with regard to long-term liability for CO2 storage was in preparation.

The Netherlands has set the following energy and climate targets:

2% per year energy savings, 20% renewable energy in 2020 and 30% GHG reduction in 2020.

Since 2007, several important policy papers have been adopted or are presented for the implementation of those ambitious goals, the most important are “Schoon en Zuinig” (2007), the Energierapport (2008), and the Innovatieagenda (2008). “Schoon en Zuinig” (“Clean and Frugal”) was adopted by the parliament end of 2007. It is a ‘working program’ elaborating the short-term policies for the current 4-year cabinet period. As before, the main pillars of reaching Kyoto objectives and beyond remain energy conservation and renewable energy, but ‘clean fossil’ is now explicitly mentioned as one of the main options for CO2 reduction.

The “Energy Report’ appeared in mid-2008 and has recently been adopted by the Parliament. It addresses the question how to provide for a reliable, affordable, and clean energy provision for the short and the long term. It calls for a ‘fundamental systemic change’ in order to achieve a sustainable energy system. It takes an international perspective. The strategy and targets for 2020 have nevertheless been criticised for being unattainable with the current set of policies. For instance, the “Energy Report” sketches three future visions without choosing one: The Netherlands as European power house, with a lot of coal and CCS; The Netherlands as ‘energy flex working’ with a lot of off-shore wind and natural gas; and The Netherlands as smart energy city, with a lot of local decentralized power, and a very smart grid.

Among the currently existing climate measures are feed-in premiums to stimulate the development of renewable energy. They are guaranteed for the period between 2007 and 2014 and the level of the premium is differentiated by technology.

Plans for four new coal-fired powers stations have led to opposition and this resulted in an agreement that new power stations should emit less than 350 g CO2/kWh. The government now requires new coal-fired power stations to be built carbon capture ready. And it is also making agreements with plant operators over reductions in emissions in addition to the EU ETS.

In June 2011, the Energy Report 2011 gave its support to CCS as a way to ensure a reliable, cleaner energy supply since Europe is expected to be dependent on fossil fuels for some time yet. In its Policy Document of the North Sea (2009), the government states its belief that CCS will allow a realistic transition from fossil fuel dependence to sustainable energy. As a global leader in the area of CCS, the country also recognises the economic benefits CCS can bring.

CCS

The government has identified CCS as one of 10 areas where the government would like to show more leadership. The Netherlands shows great potential for CCS, due to the amount of (small) depleted gas fields. The government's Energy Report 2011, acknowledges the need for CCS and the economic benefits it could bring. However, it only permits demonstration projects utilising offshore CO2 storage.

The Netherlands has reached phase two of its CCS Roadmap, which includes supporting pilot projects and transposing the EC CCS Directive. Phase three, which runs from 2015 to 2020, includes support for large-scale demonstration projects, while phase four will see the commercial use of CCS and a review of the CCS Directive.

The development of Dutch CCS policy within a European context comprehends several aspects, including solving the legal CCS issues (Mining Act and Environmental Act), ensuring policy and market conditions for capture readiness of new power plants, clarity on the availability of storage capacity, development of financial instruments to reduce financial risks of CCS and clarification on maintenance and monitoring after abandonment of

CO2 storage sites. The EUs CO2 Storage Directive will be implemented in Dutch legislation through an amendment of the Mining Act. Moreover, some amendments will be made in the Environmental Management Act and decisions and regulations based on this act, as well as one change in a decision based on the Water Act. A Bill presenting the proposed implementation of the CCS Directive was presented to the Parliament in March 2010.

The aim of the authorities is that CCS should be ‘market-conform’ with the help of the ETS: The CO2 emissions reduction should generate ‘credits’ and thus funding for the CCS investments.

The current situation for CCS deployment has faced some difficulties, as the case being for several European countries. The cabinet was aiming at two large-scale demo projects (out of the 12 proposed by the EU) in 2015 or earlier if possible. One of them, Shells project in Baarendrecht, was cancelled in 2010 due to local resistance. Further, two demonstration projects on CCS with process emissions were planned, but both got delayed or cancelled.

CCS storage capacity in the Netherlands is estimated to be 11,266 Mt – of which 1,150 Mt capacity is in depleted gas fields and 715 Mt in aquifers.  The largest storage potential is onshore (appr. 10000 Mt)

Four Kingdoms Initiative 
As oil-producing nations, the UK, Norway, the Netherlands and Saudi Arabia established the Four Kingdoms Initiative in 2008 during the International Energy Forum’s ministerial meeting in Rome. It aims to explore the potential for collaboration on CCS between countries committed to its development and deployment. A workshop to focus on the role of EOR in reducing storage costs was held in Saudi Arabia in early 2011. A second workshop is planned for 2012.

Research activities

The CATO programme:

CATO-2 is the Dutch national R&D program for CO2 capture, transport and storage. A consortium of nearly 40 partners cooperates to make governments plans realistic. CATO-2 follows and prepares all steps in the CCS chain.

The first CATO program was initiated in 2001 and acquired funding in 2003 (25.4 million, 50% of which was funded by the Ministry of Economic Affairs). The program continued until the end of 2008; some PhD work ongoing until 2009.

The aim of CATO-1 was to identify whether and how from an economical, technical, social and ecological point of view CCS would contribute to a sustainable energy system in the Netherlands. And under which conditions CCS could be implemented in the Dutch energy system. A prime characteristic of the programme was that all major stakeholders and a number of research groups from very different fields of expertise were working together within an integrated framework. CATO-1 has provided several innovations that have put the Netherlands in a leading position in the international CCS community.

The CATO-2 program is a demand driven R&D program and focuses on facilitating and enabling integrated development. This means that government and industries set the priorities within the research program: the ‘problem owners' are leading. The core of the CATO-2 program (ca. 70% of the R&D effort) exists of 11 sites that each offer opportunities for applied research on CCS. Combined they cover the entire CCS chain. The remainder of the resources will be spent on general applied research on cross cutting issues in support of these initiatives and on fundamental (application potential 5 to 10 years) research.

CATO-2 research will be performed in five Sub Program lines. Dissemination and international cooperation are listed under program coordination.

The five subprogram’s are:

•    CO2 Capture

•    Transport and CCS chain integration

•    Subsurface storage of CO2 and monitoring storage

•    Regulation and safety

•    Public perception

The mid-term external review of CATO-1 took place at the end of August 2007. The international review committee formulated the following conclusions with regard to the follow-up of the program:

 "CATO has developed into a successful research network in the Netherlands and has "de facto" become the Dutch national CCS program. It should be noted that this was not the original intention but through the nature of the activity, CATO has initiated numerous CCS projects in the Netherlands that are now highly relevant to the new national Dutch policy on climate change where CCS is recognised as an important element. CATO is therefore a ‘gift to government' and has established a much needed basis of a national capability in CCS. CATO is well linked to CCS research activities internationally and especially in Europe. It is one of the few national European CCS programs covering the entire CCS chain. The active participation of industry, research institutes universities and NGO's makes CATO a powerful consortium which is similar in nature to the highly influential ZEP EU Technology Platform."

Storage

In February 2011, the government announced that it was not prepared to permit onshore geological storage and is currently only permitting CCS projects for offshore storage.

 

Sources:

CATO2 [www.co2-cato.nl]

Climate policy tracker 2010 [http://www.climatepolicytracker.eu/sites/all/files/Netherlands.pdf]

European Commision, 2009

Harmelink et al (2010): „Support to the implementation of the CCS directive” 

UNFCCC 2009.

Vergragt (2009): CCS: the next technological lock-in? A case study from The Netherlands

The Ministry of Housing, Spatial Planning and the Environment (VROM 2007).


Support mechanismes in The Netherlands:






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