On September 11 2012 parliamentary elections were held in the Netherlands. They were won by the liberal Volkspartij voor Vrijheid en Democratie (VVD), the party of outgoing Prime Minister Mark Rutte, with 41 of the 150 seats in the lower house of Parliament - a gain of 10 seats. The social democratic Partij van de Arbeid (PvdA) won 39 seats, increasing its presence by nine. The right-wing, Eurosceptic Partij voor de Vrijheid (PVV) was reduced to 15 seats, but remains the third party in the Netherlands, with the same number of seats as the country's equally Eurosceptic Socialistische Partij (SP) on the left wing.

As no party has an absolute majority, coalition negotiations will be held in the coming weeks in order to form a government. The decline of the Christian-democratic CDA (from 20 seats to 13) makes a centre-right Cabinet a distant prospect. The VVD and PvdA are currently in the process of negotiating a coalition agreement.

Energy was an important topic throughout the campaign, with attention focusing in particular on the country's ability to reach EU targets for sustainable energy and carbon dioxide emissions. At present, the Netherlands is ranked 24th in the European Union's sustainable energy league table, with its 3.8% share lagging well behind the target of 14% by 2020. The carbon dioxide targets are equally unlikely to be met.

The parties set out various manifesto plans to meet the EU targets. The most commonly suggested measures and their main proponents can be summarised as follows:

  • the introduction of a supplier's obligation to include a percentage of sustainable energy in the supply portofolio - VVD and PvdA;
  • an increase in onshore wind capacity to 5,000 megawatts (MW) - VVD, CDA, SP and D66;
  • up to 30% co-firing of biomass in coal-fired power generators - PvdA, CDA, SP and D66;
  • an increase in offshore wind power of up to 5,000MW - SP;
  • support for photovoltaic power by further facilitating the set-off of self-produced power against consumed power - PvdA and D66;
  • an expansion of SDE+, the existing sustainable energy subsidy scheme - CDA, SP and D66; and
  • an increase in tax incentives, such as energy investment deductions and free amortisation facilities - D66.

As the next government will be a coalition, it is possible to try to predict the most likely measures that the Netherlands will adopt in the coming years in its attempt to meet the EU targets, with particular attention falling on proposals that enjoy cross-party support. For example, an obligation on suppliers to include sustainable energy in the supply portfolio seems likely to be adopted, as this measure is supported by both the VVD and the PvdA. The position of liberal democrats D66 may have a strong bearing on the future of photovoltaic power and SDE+, and on any enhancement of tax facilities for renewable investments.

The outcome of negotiations between the parties in the coming weeks will decide national energy policy for the next four years. These four years may prove crucial to the future of the energy sector in the Netherlands and to the country's ability to meet its targets. They will also be indicative of the direction of Dutch energy policy - and perhaps even the technologies used to reach these goals. For example, offshore wind power is unlikely to receive government support, as only the SP was in favour of it. However, four years is a long time in politics - technological advances, new insights and improved cost-recovery periods may yet bring about a change in course.

For further information please contact Roland de Vlam or Max WF Oosterhuis at Loyens & Loeff NV by telephone (+31 20 578 5785), fax (+31 20 578 5800) or email ([email protected] or [email protected]).