Renewable Energy policy Netherlands

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Ir. K.W. Kwant

Programme advisor

Novem

Renewable Energy policy

Netherlands

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Novem: Netherlands Agency for Energy and Environment

• 500 employees

• Management of programmes for governments

• International

collaboration: IEA

and EU

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Netherlands - Korea

•1653 - first sailor wrote a

•book about Korea

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•European Policy

•National Policy

•Fiscal support

•Green Energy Market

•Future and Collaboration

•Conclusion

Contents

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European Energy Policy

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European Green Book: basic facts

Energy self sufficiency is impossible to achieve

An energy-intensive economy:

consumption + 1 to 2%/ year

Europe-30: final energy consumption (in mtoe)

0 250 500 750 1000 1250 1500 1750

1990 2000 2010 2020 2030 Industry Transport

Households, service s

The EU’s resources are limited

Europe-30: energy production, reference scenario (in mtoe⁾

0 250 500 750 1000 1250

1990 2000 2010 2020 2030 Oil

Natural gas

Solid fuels R ene wa bles

Nuc lea r

Coal: cost of production is 4 - 5 times the world price Oil: cost of production 2 - 7 times the world price, 8 years’ reserve

Natural gas: 2% of the world ’s reserves, 20 years’

reserve

Uranium: 2% of the world ’s reserves, 40 years’ reserve Renewables: potential abundance

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The basic energy situation

Less than perfect energy options

New and renewable energy sources: a political priority

0 25 50 75 100 125 150 175 200

1990 2000 2010 2020 2030

production Europe-30: renewables

(reference scenario in mtoe)

• Renewables offer a potential to be exploited

• EU target: 12% of total energy consumption in 2010

• They have differing growth prospects

• Their takeoff assumes that financial or tax incentives will be provided

•No energy option on its own can meet the Union’s needs

•The Union’s room for manoeuvre as regards energy supply is restricted

Impact on the European Union

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European Targets 2010

• Renewable Energy: 12 %

• Electricity: Each country an addtional 5 to 15 %.

• Biofuels for transport:

– 2005: 2 %

– 2010: 5.75 %

• Heat: no targets

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Renewable Energy Consumption

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Renewable Electricity Targets 2010

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Biofuel markt in Europe

biodiesel

Bio-ethanol

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Netherlands

Climate and energy policies

• Climate

– Kyoto: 6% CO2 reduction as compared to 1990 – Reduction of acidification (NOx)

• Energy:

– Energy efficiency improvement (30% in 2020)

– Renewable energy: 5% in 2010 en 10% in 2020

– Renewable electricity: 9% in 2010 (EU directive)

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Strategy in liberalized market

• Agreements with sectors

• Greening of fiscal system

• Consumer driven market

– since 2001 using green certificates

• After 2003: Production Support

• Research and Development

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Fiscal support for renewable

• For Investment equals 30 % subsidy:

– Green funds, Tax credits, Fast depreciation

• For Production of Electricity from Renewable sources:

– increased energy tax: 6.02 € cts/kWhe

– pay back to renewables: 2.0 € cts/kWhe

– no tax on green electricity since 1-1-1999

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Fiscal Regime:

Regulatory Energy Tax

Year 1996 1997 1998 1999 2000 2001 2002

ELECTRICITY consumption in Euro cents

0 – 10.000 kWh 1.34 1.34 1.34 2.25 3.72 5.83 6.02

10.000 – 50.000 kWh (*) 1.34 1.34 1.45 1.47 1.61 1.94 2.00

50.000 – 10.000.000 kWh – – – 0.22 0.22 0.59 0.60

> 10.000.000 kWh – – – – – –

NATURAL GAS consumption in Euro cents

0 – 5.000 m³ 1.45 2.90 4.32 7.25 9.45 12.03 12.10

5.000 – 170.000 m³ (*) 1.45 2.90 4.32 4.74 5.19 5.62 5.65

170.000 – 1.000.000 m³ – – – 0.32 0.70 1.04 1.02

> 1.000.000 m³ – – – – – –

(*) Producer of green energy gets this amount of money in addition (art 36o) till 2003 + Consumers of Green Energy pay this tax (art 36i) partly

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The principle of making renewable

interesting for power producers

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The principle of making renewable interesting for power producers

Deficit

Price Power Producers 3,2 EUct Cost Price

Renewable Electricity 5,4-8,0 EUct

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The principle of making renewable interesting for power producers

Green funds

Deficit

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The principle of making renewable interesting for power producers

Green funds Fiscal instruments

Cost Price Renewable Electricity 5,4-8,0 EUct

Price Power Producers 3,2 EUct Deficit

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The principle of making renewable interesting for power producers

Cost Price Renewable Electricity 5,4-8,0 EUct

Price Power Producers 3,2 EUct Deficit Green funds

Fiscal instruments

Energy Tax 5,9 EUct

Green Electr.

6,8 EUct

Sales price normal electricity 17,1 EUct

Sales price green

electricity 18,1 EUct

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The principle of making renewable interesting for power producers

Deficit Green funds

Green Electr.

6,8 EUct

Payback 1,9 EUct

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The principle of making renewable interesting for power producers

Green funds Fiscal instruments

Green Electr.

6,8 EUct

Payback 1,9 EUct Green Certificate Deficit

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The principle of making renewable interesting for power producers

Profit Green funds

Green Electr.

6,8 EUct

Payback 1,9 EUct Green Certificate

Profit

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Marketing of green energy

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Green electricity for consumers

Sales of Green Electricity (GWhe)

0 500 1000 1500 2000 2500 3000 3500 4000

1996 1997 1998 1999 2000 2001 2002 Year

GW h e

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Green electricity Market

• Sharp increase in demand

• Production behind demand

• Since 1 januari 2002: import from other countries

• How to produce more in the

Netherlands?

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Sales of Green Electricity

0 1 2 3 4 5 6

1990 1992 1994 1996 1998 2000 2002

IDomestic Production Import

%

Bron: CBS/NOVEM

% of total energy

consumption 13%

electricty consump tion:

15.000

GWh

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Domestic Production

0 500 1000 1500 2000 2500 3000 3500 4000

1990 1992 1994 1996 1998 2000 2002

Bio-energie Windenergie

Waterkracht Zonne-energie Bron: CBS/ NOVEM

GWh

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From Fiscal Support to Production support

• Before 1/1/2003

– Tax: 6 €cts/Kwhe – Nihil tariff for

green electricity – Production

support 2

€cts/kWhe

• After 1/1/2003

– green electricity:

2.8 cts/kWhe

• After 1/7/2003: MEP national production of electricity

• guarantee for 10 yrs

– wind, bio, solar: 6.8

€cts/kwh

– cofiring: 4.8 €cts – Waste incineration:

2.8, if efficiency > 27

%.

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Fixed Feed in

MEP support €ct/kWhe

Change after jul03 Jan04 Jul04 Jan05 Ecotax reduction green

electricity

2.9 2.9 1.5 0

Biomass > 50MW (3yr) 4.8 4.0 5.5 7.0 Mixed waste/biomass 2.9 2.9 2.9 2.9

Biomass <50 MW 6.8 6.7 8.2 9.7

Wind at sea/solar 6.8 6.7 8.2 9.7

Wind at land 4.9 4.9 6.4 7.8

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From 1-7-’03 (REB+MEP)

costprice green power 5,4-11,0€ct/kWh

difference

Cost price regular power

3,2 €ct/kWh

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FROM 1-7-’03 (REB+MEP)

Green- financing

difference

costprice green power 5,4-11,0€ct/kWh

costprice regular power

3,2 €ct/kWh

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After 1-7-’03 (REB+MEP)

Cost price green power 5,4-11,0€ct/kWh

Verschil

Cost price regular power

3,2 €ct/kWh Green-

financing EIA / VAMIL EIA / VAMIL

Sales price regular power

17,1 €ct/kWh EcoTax = REB

6,4 €ct/kWh

Profit

Sales price regular power 17,1 €ct/kWh

Profit

Green Power 2,9 €ct/kWh

EcoTax = REB 3,5 €ct/kWh Green

certificate MEP

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More Information MEP, sales green certificates

Greencertificates, by Tennet:

www.certiq.nl MEP subsidy:

www.enerq.nl

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Lessons Learned

• Green Certificate as tradable unit

• Green Electricity Market creates

public involvement for Sustainability

• Harmonised EU market required for demand support

• Obligation for producers could be the

most efficient mean to achieve targets

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Future Cooperation

• Implementation:

– Certificates, Support systems

• Research Programmes

– Energy Transition: H2, Biomass, fuels – Sustainable buildings, transport,

production

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Thank you