IEA encourages the Netherlands to push for decarbonisation and electricity-market integration

In an in-depth review of Dutch energy policies launched today, the International Energy Agency welcomes the renewed focus on energy efficiency and renewable energies. The report also commends the Netherlands’ investment in energy infrastructure in recent years toward becoming an energy hub, noting that this could strengthen Europe’s security of supply through improved access to flexible and competitive energy supplies. The Dutch refining and petrochemical industry is a successful example of how to combine competitiveness and energy efficiency by integrating the whole supply chain. This can be considered as an important achievement, given that global energy price differences are growing, which impacts the competitiveness of European industry.

Yet the report notes that despite the many encouraging policy steps it has taken in recent years, the Netherlands remains one of the most fossil-fuel-intensive economies among IEA member countries, and it urged the country to step up its decarbonisation efforts. “Promoting lower-carbon energy use, especially in industry and transport, makes economic sense and can improve both sustainability and competitiveness,” said IEA Executive Director Maria van der Hoeven as she presented the report Energy Policies of IEA countries – The Netherlands 2014.

As the country is moving towards becoming a net importer of natural gas in the coming decade, it is time to re-assess its energy security and to look at different cost-effective pathways to guide the transition. The IEA sees opportunities from developing indigenous resources, such as renewable energies or unconventional fuels, as well as increased energy efficiency or nuclear energy. This will require not only an efficient energy market but a stable policy framework beyond 2020. In this regard, the swift finalisation of the EU 2030 energy and climate framework can support a long-term energy policy and investment in low-carbon technologies in the Netherlands.

As a major energy hub, the Netherlands can benefit from stepping up the co-operation with its neighbours on competitive electricity markets and system operation, notably for pooling reserves to meet demand peaks at the regional level. “Integrating the electricity systems across borders with new interconnections ensures resource efficiency. Europe’s energy markets need to be efficient and make renewable energies an integral part,” Executive Director Van der Hoeven noted.

Strong action by the government is needed to deliver on those challenges. Among the key recommendations, the IEA report calls for:

• Timely implementation of the priority actions for 2020, through regular monitoring and progress reviews, and preparation of a longer-term policy framework.
• Consolidation of security of supply during the transition to becoming a net gas importer by assessing the security and resilience of the energy system, and by supporting the development of indigenous potential, including energy efficiency, renewable energies and the remaining natural gas production potential in small or/and unconventional gas fields.
• Support for efficient, competitive and innovative power markets at regional level. This can be done by exploring options to harness demand response, integrating variable renewable generation into balancing and market-based dispatch. Strengthening co-ordination between system operation and network regulation as well as harmonisation of renewable supports are also important elements.

Energy Policies of IEA Countries – The Netherlands 2014 Review is available for free download here.

About the IEA

The International Energy Agency is an autonomous organisation that works to ensure reliable, affordable and clean energy for its 29 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA’s initial role was to help countries co-ordinate a collective response to major disruptions in oil supply. While this remains a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing authoritative research, statistics, analysis and recommendations.

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