On 12 July 2013, representatives of employers' organisations, employees' organisations, environmental organisations and the government ("parties"), led by the chairman of the Social and Economic Council (SER), entered into an outline agreement for a national energy policy providing for sustainable growth (the "National Energy Agreement for Sustainable Growth"). The coming weeks will be used to fill in the details and to assess the financial implications, so that final decisions can be made around the end of August.
Aim and scope
According to the SER and the Minister of Economic Affairs ("Minister"), the outline agreement provides a solid basis for the adoption of a national energy policy that will give the Netherlands an economic boost and make an important contribution towards the realisation of a climate-neutral energy supply in 2050. The final agreement – the National Energy Agreement for Sustainable Growth – will contain provisions on energy conservation, clean technology and climate policy. Implementation of the National Energy Agreement will, it is claimed, result in an affordable and clean energy supply and open up possibilities for the Netherlands in the clean technology markets. According to the SER, the National Energy Agreement will also lead to billions of euros in investments and in turn to thousands of additional jobs. Furthermore, it will improve the competitive position of Dutch businesses and create new opportunities for entrepreneurs.
Reduce CO2 emissions
The Netherlands has, together with other countries, declared its commitment to realising a fully climate-neutral energy supply in 2050. According to the Minister, this will require agreement at European level on an accelerated CO2-reduction path for the period after 2020, in order to realise a total CO2-reduction of 80-95% in 2050 compared to 1990. To be able to do this in a cost-effective manner, structural improvements in the European Union Emission Trading Scheme (ETS) are crucial. The parties to the National Energy Agreement will strive to bring about such improvements.
The parties have agreed on a comprehensive package of energy conservation measures. It is expected that these measures will enable the Netherlands to amply meet the EU target: a 1.5% energy savings per year at end-user level.
The parties have also agreed on the establishment by the end of 2013 of a revolving fund whose purpose is to facilitate energy conservation in the housing sector. The fund will make it possible for private individuals to install energy conservation measures in their homes, and will thereby also create additional employment in the construction sector. In addition, all homes will be given an energy label (for guidance purposes only), and a coherent plan for the use of industrial residual heat will be introduced.
Another agreed measure is that if a number of conditions are met, obsolete coal plants will be closed. One of these conditions is the abolition of the coal tax by 2016. It is expected that three coal plants (Nijmegen, Zeeland and the Amerplant) will be closed in 2015, and two (both at Maasvlakte) in 2017. The possibility of producing renewable energy by co-incinerating biomass in coal plants will be limited. The government will take the lead in developing a long-term view on CO2 capture and storage (CCS), taking into account public backing.
The parties have agreed to postpone from 2020 to 2023 the target date on which 16% of all energy used must be produced from renewable sources. However, the 14% target required under EU legislation must still be met in 2020, and the agreed approach is directed at achieving that level.
One of the new measures is the introduction of a tax credit for private individuals who co-operate in projects for the local production of renewable energy. In addition, the parties have made agreements with banks and investors to improve the fundability of large-scale renewable projects. The SDE+ subsidy scheme will remain the most important instrument for promoting investments in renewable energy.
The outline agreement attaches great importance to wind energy, to be produced both on land and at sea. The provincial governments have already agreed to provide the space necessary for the production on land of 6000 MW of wind energy per year in 2020. Substantial investments will be made in the production of wind energy on land, with additional possibilities for participation by private individuals. In addition, a specific legal framework for the production of wind energy at sea – resulting in 4500 MW per year in 2023 – must be ready in 2015.
Innovation and employment
Many of the agreed measures are aimed at increasing innovation. According to the Minister, innovation is essential to achieving the ambition, set out in the outline agreement, of ranking in the top 10 of the Clean Tech Ranking (an international league table for countries with smart sustainability solutions) in 2020. In order to be able to implement innovative solutions, the funding opportunities must increase. The previously mentioned arrangements with banks and investors and an innovation programme that will facilitate the financing of demonstration projects in the field of clean technology should, it is claimed, ensure that funding opportunities indeed increase.
The SER and the Minister are very positive about the outline agreement and the prospects for the successful conclusion of the National Energy Agreement for Sustainable Growth. The other parties, in particular the employees' organisations and the energy sector, are also mainly positive. On the other hand, a number of politicians have been somewhat critical, arguing that the outline agreement contains too many ambiguities and is not specific enough. In the next few weeks, the parties will together refine the outline agreement and fill in the details. In addition, the financial consequences of the agreed measures will be calculated and submitted to the parties. The final decisions will be taken at the end of August.