kom (2017) 0688 (forslag) - COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet The Netherlands Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Third Report on the State of the Energy Union

Europaudvalget 2017
KOM (2017) 0688
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EUROPEAN

COMMISSION

Brussels, 23.11.2017

SWD(2017) 406 final

COMMISSION STAFF WORKING DOCUMENT

Energy Union Factsheet The Netherlands

Accompanying the document

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN

PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL

COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN

INVESTMENT BANK

Third Report on the State of the Energy Union

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kom (2017) 0688 (forslag) - COMMISSION STAFF WORKING DOCUMENT Energy Union Factsheet The Netherlands Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK Third Report on the State of the Energy Union

Energy Union

–The

Netherlands

The Netherlands

Energy Union factsheet

Macro-economic implications of energy activities

Energy and transport are key sectors for the overall functioning of the economy as they provide an

important input and service to the other sectors of the economy. Together the activity in these two

sectors

accounted for 6.3% of the total value added of the Netherlands in 2015. Similarly, their

share in total employment

was 4.6% of total employment in 2015, of which 4.3% in the transport

sector and 0.3% in the energy sector.

The decarbonisation of the energy and transport sectors will require significant investments and

economic activity beyond the remit of these sectors themselves. The energy transition implies a

structural shift in economic activity. Energy-related investment and jobs will in part migrate from

traditional fossil fuel based activities towards construction, equipment manufacturing and other

services related to the deployment of low carbon and clean energy technologies. At the moment, the

efforts related to the low-carbon and clean energy transition in sectors beyond energy can only be

partially quantified and are therefore not included in this analysis.

Value added of the sector as % of total

economy gross value added

Energy&Transport as % of total GVA:

Employment in the sector as % of total

employment

Energy&Transport as % of total employment:

6.23

[%]

6.35

6.64

6.88

[%]

4.96

4.57

5.57

5.46

2005

2015

2005

2015

EU28

2005

2015

2005

2015

EU28

Energy

Transport

Energy

Transport

(source: Eurostat)

In the case of renewable energy sector, both the direct as well as the indirect effects on employment

are being estimated. According to EurObserv'ER, in 2015, the share of direct and indirect renewable

energy related employment in total employment of the economy in the Netherlands was at about

The indicators used in this country factsheet largely build on indicators developed for the Commission Staff

Working Document "Monitoring progress towards the Energy Union objectives

–

key indicators"

(SWD(2017) 32 final) https://ec.europa.eu/commission/sites/beta-political/files/swd-energy-union-key-

indicators_en.pdf

Gross value added and employment in NACE sectors D-Electricity, gas, steam and air conditioning supply

and H-Transportation and storage

National accounts, Eurostat

Energy Union

–The

Netherlands

0.35%, below the EU average of 0.54%. The turnover of the renewable energy industry in the same

year was estimated at around EUR 3.6 billion, the biggest part being attributed to the wind (EUR 1.5

billion) followed by photovoltaic (EUR 660 million), biomass (EUR 400 million) and heat pumps (EUR

390 million) industries.

(source: EC based on Eurobserv'Er and Eurostat)

An indication of the level of investments in the energy sector in the Netherlands is given by the Gross

fixed capital formation (GFCF)

. These investments, in the electricity and gas sectors, which are taken

as reference sectors, have been on an increasing trend since 2008. They represented around 1% of

the country's GDP in 2015, higher than in the pre-crisis period.

GFCF in energy as share of GDP, Netherlands*

1.2%

1.0%

[% GDP]

0.8%

0.6%

0.4%

0.2%

0.0%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

GFCF=Gross

fix capital formation

(source: Eurostat)

In terms of trade, the Netherlands is net exporter of electricity and a net importer of fossil fuels

(based on gas trade data reported as non-confidential and disseminated publicly) and different

sources of biomass. However, national statistics suggest there have been gas surpluses in both 2006

Gross fixed capital formation consists of resident producers´ acquisitions, less disposals, of fixed tangible or

intangible assets. This covers, in particular, machinery and equipment, vehicles, dwellings and other buildings.

It also includes foreign direct investment (FDI). Steam and air conditioning supply are also included in the

figures mentioned above as Eurostat reports electricity, gas, steam and air conditioning supply together.

Energy Union

–The

Netherlands

and 2014 (see Occasional Papers 196/2014). The trade deficit in energy products has fallen from

about 3% of GDP in 2006 to 1.8% in 2015. The largest decrease is accounted for by petroleum

products. Furthermore, during the same period, the trade deficit for electricity (0.2%) has turned into

a surplus of 0.1%.

Trade balance of energy product and current account

balance

Trade balance of all energy products [%GDP]:

-3.05

0.5

[% of GDP]

-1.81

-2.24

-1.69

0.0

-0.5

-1.0

-1.5

-2.0

-2.5

-3.0

-3.5

2006

2015

Gas

Oil

Coal

Electricity

2006

EU28

2015

(source: Eurostat, based on gas trade data reported as non-confidential and disseminated publicly)

Energy security, solidarity and trust

Energy Mix

In comparison to the average energy mix in the EU, the energy mix of the Netherlands has a much

higher share of natural gas usage (38% vs 22%) and a, albeit less pronounced, higher share of oil

products (40.6% vs 34.4%) in gross inland consumption of primary products. Conversely, nuclear

power (1.4% v 13.6%) and renewables (4.7% vs 13%) have a lower relative importance in the Dutch

energy mix than elsewhere in the EU. The Netherlands has one nuclear power plant at Borsele, which

is currently scheduled to close in 2033.

(source: ESTAT)

Energy Union

–The

Netherlands

Import dependency and security of supply

Although currently comparatively low, energy import dependency is expected to increase. With net

import dependency amounting to around 52% of domestic demand, the Netherlands has an overall

average energy import dependency. Nevertheless the Netherlands is highly dependent on imports of

crude oil and hard coal. Gas production has started to decrease and will continue to do so in the

coming years as a result of production ceilings set for the Groningen field (due to earthquakes) and

lower production levels at other small gas fields following natural depletion. According to the

International Energy Agency, the Netherlands is expected to become a net importer of gas by 2025.

(source: ESTAT)

Imports of uranium and nuclear fuels are not included in Eurostat's energy balances. However, the

Netherlands is a major supplier of uranium enrichment services through the Urenco site at Almelo.

The three European Urenco sites (in the Netherlands, Germany and the UK) account for circa 30% of

global enrichment capacity whereas the Netherlands has only one nuclear power plant at Borsele.

The Netherlands complies (easily) with the N-1- gas requirement. Security of supply is facilitated

through the large indigenous production that, moreover, does not depend on one single production

facility. Indeed, the largest Groningen field is divided into over 20 facilities, and additional national

production is delivered through more than 236 so-called small fields. Notwithstanding the down-

scaling of the annual Groningen production, the measures that are taken assure that under peak

and/or emergency situations maximum required production capacity will still be available.

N-1 rule for gas

198.0%

2016

threshold 100%

(source: gas coordination group)

Energy Union

–The

Netherlands

Internal market

1.1.1. Interconnections and wholesale market functioning

Electricity

(

source: EC services based on ENTSOE) (source: EC services based on ESTAT)

(source: EC services based on Platts and

European power exchanges)

The Netherlands is currently interconnected with Germany, Belgium, the UK and Norway. The

interconnection level

for electricity is 18% in January 2017 for the Netherlands, which is above the

2020 target.

The Netherlands currently has two Projects of Common Interest in electricity to increase

interconnection capacity: Denmark

—

Netherlands interconnection between Endrup (DK) and

Eemshaven (NL) (currently known as

COB‘A a le );

and Germany

—

Netherlands interconnection

between Niederrhein (DE) and Doetinchem (NL).

The COBRA cable will have a capacity of approx. 700 MW, will be around 325 kilometres long, and

will run from Eemshaven (the Netherlands) to Endrup (Denmark) via the German sector of the North

Sea. The cobra cable may, in a later stage, also connect new offshore wind farms to the cable and is

NL most important PCI, related to the North Sea cooperation. Two onshore converter stations

–

one

in the Netherlands and one in Denmark

–

are needed to connect them to the existing grids. Work on-

shore on the COBRA cable has started in both the Netherlands and in Denmark last year. In the

Netherlands the works on the subsea cable have started in January 2017.

Even though the Netherlands has an interconnection rate of 18%, there are occasional cases of

congestion preventing Dutch wholesale prices to respond when wholesale prices in Germany drop as

a result of high renewables penetration. The second PCI on the list will contribute to resolving this

issue.

The interconnectivity level is calculated as a ratio between import interconnection and net generation capacities

of the country (i.e. the 2017 value is the ratio between simultaneous import interconnection capacity [GW]

and net generating capacity [GW] in the country at 11 January 2017, 19:00 pm as resulted from ENTSO-E

Winter Outlook 2016/2017)

Energy Union

–The

Netherlands

The concentration of Dutch power generation market is low, indicated a vigorous competition.

Wholesale electricity prices are in line with the EU average after they converged (downwards)

towards the EU average in recent years.

1.1.2. Gas

For gas, no expansion investments are required to accommodate demand for transportation

capacity. This is consistent with the converging wholesale prices observed at the Northwest

European hubs and the low congestion levels. There are currently no gas PCIs in the Netherlands.

However, the Netherlands developed a strategy to become Europe

gas roundabout , and to

diversify supply sources (LNG, countries of origin).

Concentration in the Dutch wholesale gas supply market gas market is relatively low, below the EU

average. Due to pro-market policy-making the Dutch gas hub TTF has developed into the most liquid

gas hub in the EU, and has below average gas prices.

(source: ACER for the left graph and EC services based on Platts, gas hubs, ESTAT for the right graph)

1.2.Retail electricity and gas markets

1.2.1.Electricity

In 2016, household electricity prices in the Netherlands were at 15.9 euro cents per kWh, below the

EU average. Between 2013 and 2016, average band retail electricity prices for households decreased,

but to a lesser extent than the wholesale prices. This was in spite of a 2.5 percentage point decrease

in taxes and levies.

The Netherlands has the second highest electricity switching rates in the EU (15% in 2015 and 16.4%

in 2016) and consumer satisfaction in electricity services is well above the EU average. With an

ongoing national smart meter deployment programme, the Netherlands has also seen a sharply

increased deployment of smart meters, 21.8% of household customers having smart meters in 2015.

Energy Union

–The

Netherlands

(source: ACER)

(source: Eurostat)

1.2.2.Gas

The Netherlands has one of the highest gas switching rates in the EU, at 15%, suggesting strong

consumer engagement in the market. Between 2013 and 2016, average band retail gas prices for

households decreased by 5 euro cents per kWh. Nevertheless, in 2016, household gas prices in the

Netherlands were over 25% above the EU average at 8.1 euro cents per kWh, which can be explained

by a higher share of taxes and levies.

Almost 30% of household customers in the Netherlands had gas smart meters in 2015, by far the

highest of any Member State.

(source: ACER)

(source: Eurostat)

Energy Union

–The

Netherlands

1.2.3. Market performance indicators

According to the periodical survey of the European Commission, Netherlands consumers are close to

the EU average with regards to consumers' satisfaction with electricity and gas services.

(source: DG JUST survey)

1.3. Energy affordability

Energy affordability is understood as consumers' ability to pay for their energy needs without this

negatively impacting their comfort and livelihood. Affordability can be measured by looking at how

much people in the lowest income bracket have to pay for their energy needs (or, in other words, by

calculating the share of energy expenditure in total household expenditure for the quintile of

population with the lowest income). In the Netherlands, the share of energy in total household

expenditures of this quintile of the population was 6.5% in 2013/2014, well below the EU28 average

of 8.6%. In 2015 in the Netherlands, 8% of citizens below the at-risk-of poverty threshold consider

that they are unable to keep their home adequately warm, a decrease of 1.5 points from 2005. This

can at least partially be explained by the rapidly improving efficiency of residential buildings.

(source: ad-hoc data collection of DG ENER based on HBS with the support of Eurostat and national statistics)

Energy Union

–The

Netherlands

Energy efficiency and moderation of demand

The Netherlands' 2020 energy efficiency target is 60.7 Mtoe expressed in primary energy

consumption (52.2 Mtoe expressed in final energy consumption). The Netherlands is on track to

meet the target of 1.5% energy efficiency savings on an annual basis (Art. 7) and has to keep its

efforts to ensure the targets are met, given that the latest available data show a slight increase in

their energy consumption trends.

(source: Eurostat)

Primary energy intensity of the Dutch economy as a whole has decreased from 2005, while

remaining below the EU average. Between 2005 and 2015, the primary energy intensity of the

economy (expressed by the ratio of primary energy consumption over GDP) has decreased annually

by 1.6 %. This is lower than the EU average of 2 % annual change.

Overall, the split of final energy consumption by sector in the Netherlands is similar with the one at

the EU level. Nevertheless, the share of energy consumption in agriculture (horticulture) is notably

higher than for the EU as a whole (7.8% vs 2.3%) but is declining and the share of energy

consumption in the residential sector is slightly lower than at the EU average (19.7% vs. 25.4%).

(source: Eurostat)

Although a significant (final) energy intensity reduction has been recorded in the industrial sector, i.e.

about 14.9% between 2000 and 2015, this is less than the average energy intensity reduction in the

EU28 over the same period (i.e. 18.8%). The energy intensity in industry also remains above EU

average.

Energy Union

–The

Netherlands

The specific energy consumption per square meter in the residential sector is below EU average and

decreased by almost 1 p.p. faster than the EU average over the 2005-2015 period. This is mainly due

to improved housing insulation and increased roll-out of energy efficient household appliances.

(source: Eurostat)

(source: Odyssee database)

Energy in transport

Between 2005 and 2015 in the Netherlands, the final energy consumption in transport recorded an

average annual reduction of 0.6 %, while GDP increased annually by 1 %. This occurred in a context

of increase of freight transport activity (except 2009, a year of economic recession), i.e. 8.5%

between 2005 and 2015. Regarding transport performance, the Netherlands report the highest use

of inland waterways in freight transport, given the existence of a network of navigable rivers and

canals in the country.

(source: Eurostat)

(source: Eurostat and DG MOVE pocketbook)

The share of collective land transport in all passengers' transport increased between 2005 and 2015

by 2 percentage points (from 11.8% to 13.9%) indicating a higher use of collective transport means

(including trains, motor coaches, buses and trolley buses) in the Netherlands. This share is below the

EU average (of 17.3% in 2015).

Energy Union

–The

Netherlands

(source: Eurostat)

The Netherlands is characterised by a high density of population and a detailed network of roads,

canals and transport infrastructure in general. It is also a typical cycling country in the EU.

The Netherlands is leading the Member States in the transition towards automated mobility.

Automated mobility is believed to have a very important potential in terms of energy efficiency and

more rational use of our resources. To that end, they organised in April 2016 a dedicated ministerial

meeting where the Amsterdam Declaration on automated mobility

was adopted. Several pilot

projects are running and they are very active with field operational tests. The Dutch have a

comprehensive perspective in the way that they not only look at road vehicles (cars, busses and

trucks), but equally ships, inland vessels and drones.

The Netherlands has been investing a lot in additional road infrastructure (notably the widening of

the A2 highway connecting Amsterdam to Utrecht). This has so far resulted in a better flow of the

road traffic and decreased congestion and thus less wasted emissions. There are no road tolls in the

Netherlands. An attempt to introduce a highway toll was made in 2010, but it has since then been

discarded.

Decarbonisation of economy

GHG emissions

In 2016, GHG emissions in the Netherlands were around 8% below 1990 levels, which is a lower

reduction than the EU average of -22%. The Netherlands committed to a non-ETS target of a 16 %

reduction in emissions by 2020 compared to 2005 levels. Non-ETS emissions were reduced by 20%

between 2005 and 2016. According to the latest national projections submitted to the Commission

and taking into account existing measures, the 2020 target is expected to be met by a margin of 10

percentage points.

https://english.eu2016.nl/documents/publications/2016/04/14/declaration-of-amsterdam

Energy Union

–The

Netherlands

(source: EC and EEA)

According to EEA estimates, the GHG intensity of the Netherlands' economy was below the EU

average, decreasing at a similar pace since 1990. In 2016, the GHG emissions per capita in the

Netherlands were 40% above the EU average, increasing from around 25% above the EU average in

1990.

In 2015, the largest sectors in terms of GHG emissions were the energy sector (more than 1/3 of the

total GHG emissions) followed by industry (18%), transport (16%) and agriculture, forestry and

fishery (15%).

(source: EC and EEA)

Preliminary accounts under the Kyoto Protocol for the Netherlands show overall emissions of 0.7 Mt

eq. as an annual average in the period 2013-2015. For comparison, the annual average of the EU-

28 accounted for removals of 119.0 Mt CO

eq. The Netherlands is one of four EU Member States

which show overall emissions in this preliminary accounting exercise and the only Member State

with no accounted data for Forest Management.

Removals by Afforestation are lower than emissions by Deforestation. Overall, there is a decreasing

trend in emissions, mainly due to increasing removals by Afforestation over the course of the three-

year period. This trend is partly compensated by slightly increasing emissions by Deforestation.

Energy Union

–The

Netherlands

Note: Forest Management credits are capped and presented as yearly averages when the total Forest

Management credits of the considered period exceed the simulated cap over the same period.

(source: EC and EEA)

emissions in transport and alternative fuelled vehicles

The average CO

emissions of new cars in the Netherlands were in 2016 below the EU average, and

decreased considerably between 2005 and 2016 by 37.7%

(compared to 27.3% reduction for the EU

average). This is notably the result of tax incentives in the transport sector.

EU legislation sets mandatory CO

emission reduction targets for new cars and vans. By 2021, the

fleet average to be achieved by all new cars is 95 gCO

/km. For new vans, the fleet average is set at

147 gCO

/km by 2020.

(source: European Environment Agency)

The number of electric charging points in the Netherlands has more than quadrupled from 2013 to

2016, from 5 878 to 26 700 units, the highest number of charging points in the EU in 2016. The sale

of alternative fuel vehicles is also among the highest in the EU.

It should be noted that these figures refer to test cycle CO2-performance and not to observed real-world CO2-

performance of new vehicles.

Energy Union

–The

Netherlands

(European Environment Agency)

(European Alternative Fuels Observatory)

National Policy Frameworks under Directive 2014/94/EU on alternative fuels infrastructure have to

establish targets, objective and measures for the development of the market of alternative fuels in

the transport sector and the deployment of the relevant infrastructure. The Netherlands has

submitted its National Policy Framework as requested under article 3 of the Directive 2014/94/EU.

A detailed assessment of the Dutch National Policy Framework in terms of its compliance with the

requirements of Directive 2014/94/EU on alternative fuels infrastructure, its contribution to

achievement of long-term energy and climate objectives of the Union and coherence of its targets

and objectives in terms of cross-border continuity has been published as part of the Communication

on Alternative Fuels Action Plans (COM(2017)652) and the related staff working document

SWD(2017)365.

1.4. Adaptation to climate change

Dutch adaptation policy has two components: the 2016 National Climate Adaptation Strategy

Adapti g

with

A itio

(December 2016) and the 2012 Delta Programme. The Adaptation Strategy

is complementary to the Delta Programme. It describes how climate change will affect life in the

Netherlands, drawing particular attention to those effects which are likely to have significant impact

in the years ahead, such as water management, health, agriculture and forestry, recreation,

infrastructure and energy.

The next step is to produce a Climate Adaptation Implementation Programme, publication of which

is scheduled for the end of 2017.

The Delta Programme involves many measures for adaptation. The aim is to ensure that flood risk

management, freshwater supply, and spatial planning will be climate-proof and water-resilient by

2050, in the face of increasing weather extremes. The

DeltaPla

for Spatial

Adaptatio

(DSA) has

been established. Following the Delta Decision on Spatial Adaptation, it will specifically follow a

territorial approach.

Energy Union

–The

Netherlands

The Monitoring and Evaluation framework for climate change adaptation is under development.

1.5. Taxes on energy and transport and fossil fuel subsidies

The overall tax burden on energy and transport in the Netherlands amounts to 2.9%, around 0.5 p.p.

higher than the EU average. It is particularly the tax burden on transport vehicles that is higher, while

fuel taxation is slightly below the EU-average. Taxation of heat and electricity is somewhat above the

EU-average, and has also shown an increase since 2007. The tax burden on vehicles and transport

fuels has in contrast fallen since 2007. Both the registration and the circulation tax for cars in the

Netherlands consider CO2 emissions in their rates. Overall, revenues from environmental taxation

are higher in the Netherlands than in the majority of Member States.

Energy & Transport related taxes as % GDP

Total transport and electricity taxes [%GDP]:

2.94

[% GDP]

2.90

2.28

2.37

2007

2014

Heat & Electricity

Transport Vehicles

2007

EU28

Transport Fuel

2014

(source: Eurostat)

Fossil fuel subsidies decreased sharply in the Netherlands after 2013, when the differentiated tax

scheme for diesel according to its uses was terminated. This happened because the policy was

environmentally harmful, and implementation of the policy was costly as monitoring diesel use by

activity was expensive. Netherlands currently only provides consumption tax concessions for natural

gas and electricity used in heating the buildings of non-profit organisations.

Energy Union

–The

Netherlands

(source: OECD Inventory of Support Measures for Fossil Fuels 2015)

1.6. Renewable energy

The Netherlands is the only Member State that did not reach its 2013/2014 indicative RED trajectory

of 5.9% in gross final energy consumption. With a 5.84% renewable energy share in gross final

energy consumption in 2015, the Netherlands is also expected to miss its 2015/2016 indicative RED

trajectory of 7.6%. While the National Energy Outlook 2016 projected an acceleration of the increase

in the renewable energy share towards 2020, it is still uncertain if the Netherlands will fully deliver

on the 2020 target without additional efforts. At the same time, the national target of 16%

renewable energy in 2023 agreed upon in the National Energy Agreement is expected to be met.

Following the results of the National Energy Outlook and the evaluation of its National Energy

Agreement in October 2016, the government has proposed an acceleration of its plans to support

renewables in 2017. These measures include, amongst others, an increased budget for their main

support scheme (SDE+) for renewables from EUR 2.5 billion in 2015 to EUR 9 billion in 2016 to 12

billion in 2017. The 2016 tender has supported 2.3 GW of additional renewable energy projects, and

the first tender round of this support scheme in 2017 has supported 3.2 GW of renewable energy

projects. Following the successful separate tendering processes for 1380 MW of offshore wind, the

government has also proposed additional tenders for offshore wind before 2020, and an extension of

new policy support initiative for small renewable heat projects (ISDE) that has been opened in 2016.

Furthermore, the Netherlands has put all of the necessary elements in place to facilitate to reduce

administrative barriers.

Finally, the government published its 'Energy Agenda 2050', which is their proposal to achieve the

2050 that were previously set out by the "national energy outlook" and the 'national energy

agreement'. The energy agenda is based on the premise to achieve the EU target of 14% RES in 2020

and the national target of 16% in 2023. Use of the cooperation mechanisms under the Renewables

Directive could be considered as a way to help achieving the 2020 renewable energy target, if

necessary.

(source: Eurostat-SHARES)

Energy Union

–The

Netherlands

(source: Eurostat-SHARES)

It is estimated that as comparing to 2005, the Netherlands avoided in 2015 about 3.1 % of the fossil

fuel in gross inland consumption and about 3.3 % of GHG emissions at national level due to the

deployment of the renewable energy systems.

This is considerably lower than the EU-28 average,

which for fossil fuel and GHG emission avoidance stood at 10.1 % and 9.1 % respectively.

(source: EEA)

1.7. Contribution of the Energy Union to better air quality

Since the introduction of the 'National Air Quality Cooperation Program'

in 2009, the Dutch

authorities have reported an average reduction of PM

and NO

concentrations of 0,8 µgr/year and

0,6 µgr/year respectively

. Nevertheless, air quality in the Netherlands continues to give cause for

concern. For the year 2013, the European Environment Agency estimated that about 11,530

premature deaths were attributable to fine particulate matter (PM

2.5

) concentrations and over 1,820

to nitrogen dioxide (NO

) concentrations

In Dutch: Nationaal Samenwerkingsprogramma Luchtkwaliteit (NSL), https://www.government.nl/topics/environment/air-

quality/measures-to-tackle-air-pollution

European Environment Agency (EEA), Air quality in Europe

–

2016 report, Annex 1

European Environment Agency, 2016,

Air Quality in Europe

–

2016 Report

, table 10.2. The report also includes details

as regards the underpinning methodology for calculating premature deaths.

Avoided GHG emissions mentioned here have a theoretical character as these contributions do not

necessarily represent 'net GHG savings per se' nor are they based on life-cycle assessment or full carbon

accounting.

Energy Union

–The

Netherlands

For both pollutants the Netherlands reported exceedances of the binding EU air quality standards

For the year 2015, the Netherlands reported exceedances of the limit value for PM

in 1 out of the 9

air quality zones in the Netherlands while exceedances of the limit value for NO

were reported in 2

of the 9 zones as shown in the figure below

Air quality zones in exceedance of EU air quality standards

[number of zones]

NO2 Annual limit value PM2.5 Annual limit value PM10 Daily limit value

number of zones exceeding

number of zones not exceeding

(source: EEA)

There are indications that the health-related external costs from air pollution in the Netherlands are

more than EUR 13 billion/year (income adjusted, 2010), which includes the intrinsic value of living a

healthy life without premature death as well as the direct costs to the economy such as healthcare

costs and lost working days due to sickness caused by air pollution

The Energy Union can substantially contribute to addressing these air quality problems through

measures reducing emissions of both GHG and air pollutants such as PM and nitrogen oxides (NO

)

from major contributing sectors such as (road) transport, energy production, industry and residential

heating (e.g. stoves and boilers) as shown in the figure below

Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality and cleaner

air for Europe, OJ L 152, 11.6.2008, p.1-44

Compliance data as reported by the Member States as part of their official annual air quality report for the calender year

2015 (available on the European Environment Agency's (EEA) Eionet/Central Data Repository),

http://cdr.eionet.europa.eu/nl/eu/aqd

See also the EU Environmental Implementation Review Country Report for the Netherlands, SWD(2017)52 final of

3.2.2017

National emission data as reported by the Member States to the EEA (available on the EEA's Eionet/Central Data

Repository), http://cdr.eionet.europa.eu/nl/eu/nec_revised

Energy Union

–The

Netherlands

Agriculture

Commercial, institutional and households

PM2.5 emissions by sectors - 2015*

4.6%

21.2%

NOx emisisons by sectors - 2015*

1.5%

17.2%

Energy production and distribution

Energy use in industry

Industrial processes and product use

Non-road transport

Other

Road transport

Waste

4.0%

4.8%

34.7% 0.3%

8.0%

0.3%

22.3%

0.0%

13.5%

14.2%

16.0%

37.2%

*NECD data submitted by MS to EEA at 28th May 2015

(Source: EEA. This table reflects only sources of primary PM

2,5

emissions.)

Research, innovation and competitiveness

1.8. Research and innovation policy

In the 2013 Energy Agreement for Sustainable Growth, the Dutch government committed to an

ambitious level of public investment on clean energy research and innovation (R&I), most notably in

the demonstration phase of the technology cycle, giving a strong boost to investments in this field.

The following ambitions of the Energy Agreement for Sustainable Growth form the core of the Dutch

gover e t s pu li fu di g o

it e ts up to 2020:



A grant programme for demonstration projects with considerable export potential in the

area of energy innovation. Under this programme, launched in 2014, Dutch companies may

receive up to EUR 6 million per project to demonstrate new sustainable energy technologies

and energy efficiency innovations.

Investments in offshore wind energy projects demonstrating innovative techniques aimed at

achieving a cost reduction of 40% through process innovation.

A financial allocation of EUR 50 million per year during 2016-2019 from the Stimulation of

Sustainable Energy Production (SDE+) operating fund for energy innovation aimed at making

renewable energy production in the Netherlands more cost-effective.

Additional public funding made available for innovative energy efficiency projects in the built

environment, with a view to accelerating the cost-effective adoption of energy efficiency

technologies.



Furthermore, funding will be maintained at more or less current levels for activities in the following

areas: (a) Fundamental research on clean energy technologies; (b) Public funding for clean energy

technologies in collaboration with the private sector and knowledge institutions; (c) Applied research

into energy innovation.

The Netherlands is a very active contributor to the ongoing work of the Strategic Energy

Technologies (SET) Plan. It participates in eleven (out of fourteen) temporary working groups for the

Energy Union

–The

Netherlands

implementation of the integrated SET Plan, and leads the one dedicated to offshore wind and co-

leads the one dedicated to carbon capture and storage/use.

Regarding the Horizon 2020 programme, The Netherlands has so far received 7.2% of the EU

contribution devoted to the 'secure, clean and efficient energy' part of the programme. As of

September 2017, 277 participations from Dutch organisations have been awarded over EUR 131

million in Horizon 2020 energy projects. This includes a grant of almost EUR 3.5 million to the Energy

Research Centre of the Netherlands for its participation in project STEPWISE (CO2 capture), and five

grants totalling over EUR 9.6 million to Dutch beneficiaries participating in project PROMOTION

(offshore transmission networks).

The Netherlands joined the Mission Innovation

initiative as a fully-fledged member in November

2016, during the Conference of Parties in Marrakesh (COP22). As a result, it has committed to

doubling funding of the main programs of clean energy R&I

from a base-line level of EUR 100

million per year

to EUR 237 million in 2020. This funding will be dedicated to research,

development and demonstration programs supporting renewable energy technologies (including

offshore and onshore wind), energy-efficiency technologies, carbon capture and storage, and other

crosscutting technologies.

1.9. Investments and patents in the Energy Union R&I priorities

In 2015, public (national) investments in the Energy Union R&I priorities reached EUR 181 million,

having increased by 18% compared to 2014. The largest share of these investments (41%) was

attracted by the Renewables R&I priority of the Energy Union, followed by the Smart Systems priority

(21%). In the period 2007-2015, the maximum annual public investment was EUR 350 million,

reported in 2010. In 2014, the most recent year for which data for most Member States are available,

public investment per GDP in the Netherlands was lower than the EU average.

Private investment in the Energy Union R&I priorities in 2013 was estimated at EUR 846 million (5%

of the private R&I investment in Energy Union R&I priorities in the EU). The focus was on Efficient

Systems, which received 37% of these investments, followed by the Smart System priority with a

share of 28%.

In 2013, the latest year for which complete patent

statistics are available, 141 companies and

research organisations based in the Netherlands filed 298 patents in low-carbon energy technologies

(5% of the EU total). The focus was on Smart System (38%), followed by Renewables and Efficient

system (23% each).

In 2013, private R&I investments and patents in Energy Union R&I priorities were higher than the EU

average when normalised by GDP and by population respectively. In the period 2007-2013, both

private R&I investments and the number of patents in Energy Union R&I priorities increased on

average by 6% and 15% per year, similarly to the respective indicators at EU level.

http://mission-innovation.net/

Programmes funded by the Ministry of Economic Affairs and the Ministry of the Interior and Kingdom Relations

average annual financing during 2013-2015

In the context of this document, the term 'patent' refers to patent families, rather than applications, as a measure of

innovative activity. Patent families include all documents relevant to a distinct invention (e.g. applications to multiple

authorities), thus preventing multiple counting. A fraction of the family is allocated to each applicant and relevant

technology.

Energy Union

–The

Netherlands

Note: The international comparison (right) is shown for 2014 (The Netherlands had reported EUR 132 million).

Reporting at EU level for 2015 is not as complete, and very few countries have reported for 2016.

(Data sources: Public investment as available in the International Energy Agency RD&D Statistics database

for

codes relevant to Energy Union RIC priorities. Patent data based on the European Patent Office PATSTAT

database

. Private investment as estimated by JRC SETIS. Detailed methodology available from the JRC

1.10.Competitiveness

In 2014, the real unit energy costs (RUEC) in the Netherlands 23(17.2) were above those at the EU

average (15.3), more than double than those in the US but below those in Japan, Russia and China.

The electricity prices paid by industrial customers in the Netherlands are below the EU and OECD

averages but still higher than e.g. in the United States and Mexico. Conversely, gas prices for

industrial consumers are around the EU average but above OECD average.

http://www.iea.org/statistics/RDDonlinedataservice/

https://www.epo.org/searching-for-patents/business/patstat.html#tab1

https://setis.ec.europa.eu/related-jrc-activities/jrc-setis-reports/monitoring-ri-low-carbon-energy-technologies

This indicator measures the amount of money spent on energy sources needed to obtain one unit of value

added.

Energy Union

–The

Netherlands

(source: ECFIN)

(source: ESTAT and IEA)

Regarding the competitiveness in renewable energy, the Netherlands are not specialised in either

wind or solar energy as indicated by revealed comparative advantage indicators

below 1. No

progress has been made in the wind sector since 2005, despite a meteorological advantage. In terms

of solar energy the comparative advantage has improved since 2005 but remains below one. The

relative trade balance

shows that the Netherlands are a net exporter of wind components, in

particular power electronics, yet considerably below the EU average. Like the EU28, the Netherlands

are a net importer of solar energy equipment.

Revealed Comparative Advantage -

RCA

absolute change 2005 - 2015:

0.25

0.5

Relative Trade Balance - RTB

absolute change 2005 - 2015:

0.00

-0.07

0.22

1.0

-0.02

0.08

-0.08

0.06

[-]

0.0

-0.5

-1.0

solar

wind

2005

2015

solar

wind

solar

wind

2005

2015

solar

wind

EU28

(source: UN comtrade)

j is the country and w is the reference group, the World economy. 2005 refers in the text to the indicator average

over the 2000-2009 period, while 2015 represents the average over the 2010-2016 period. The same applies for

the RTB indicator - see below.

�� −��

The RTB indicator for product "i" is defined as follows:

��

where

��

is the value of product's

"i" exports and

��

imports.

��

+��

��

The RCA index for product "i" is defined as follows:

RCA

∑ X,

Xw,

∑ Xw,

where

is the value of exports, and

Energy Union

–The

Netherlands

Regional and local cooperation

The Netherlands is a member of the Pentalateral Energy Forum, which was created in 2005 by Energy

Ministers from Benelux, Germany and France in order to promote collaboration on cross-border

exchange of electricity and natural gas. Supported by the European Commission, it further develops

the regional electricity and gas market as part of the single European market. The Netherlands also

participates in the German-led round-table on market developments.

Regional cooperation on infrastructure development is necessary to optimise the identification of

regional infrastructure priorities and to coordinate cross-border investments. The Netherlands is

member of three Regional Groups which have been established under the TEN-E Regulation:

Northern Seas Offshore Grid, North South Electricity Interconnections in Western Europe, and North

South Gas Interconnections in Western Europe.

During the Netherlands Presidency of the Council of the EU in 2016, large steps were taken to

promote regional cooperation around the North Seas, resulting in the Political Declaration on Energy

Cooperation between 10 North Seas Countries, as signed in June 2016. The cooperation, driven by a

High level group and various working groups, focuses primarily on the cost-effective deployment of

offshore wind generation, but also refers to interconnection and market integration in its objectives.

European Territorial Cooperation

–

'Interreg'

–

under EU cohesion policy provides further

opportunities for cross-border, transnational and interregional cooperation, including in the Energy

Union areas.

Cities and urban areas have a key role in the energy and climate challenge. The Urban Agenda for the

EU, established by the Pact of Amsterdam in May 2016, better involves cities in the design and

implementation of policies, including those related to the Energy Union. It is implemented through

Partnerships, in which the Commission, Member States, cities and stakeholders work together on a

number of important areas, including on Energy Transition, Urban Mobility, Air Quality, Climate

Adaptation and Housing. The Netherlands is participating in the partnerships on Air Quality, as

coordinator and with the city of Utrecht as member, Energy Transition, with the city of Tilburg as

member, Urban Mobility, with the city of Nijmegen as member, and Housing, as member.

17 cities of the Netherlands participate to the Covenant of Mayors, and have sustainable energy

action plans. As seven of the largest cities in the Netherlands are signatories, these plans cover over

3.5 million people and 20.6 % of the population. All together, these municipalities committed to

reduce by 2020 the GHG emissions by 33.8% (as compared to 1990 baseline).

(source: JRC 2016. Notes: SEAP=sustainable energy action plan, GHG=greenhouse gas emissions)

Energy Union

–The

Netherlands

In the Netherlands, by September 2016, 3 cities (covering 0.92 million inhabitants) have committed

to conduct vulnerability and risk assessment and develop and implement adaptation plans in the

framework of the Covenant of Mayors for Climate and Energy.

Cohesion policy and EU-supported clean energy investments

EU cohesion policy makes a key contribution to delivering the Energy Union objectives on the

ground, including investment possibilities to implement energy policy objectives in the Netherlands

which are complemented by national public and private co-financing, aiming at optimal leverage. It

also ensures integrated territorial solutions to energy and climate challenges, supports capacity

building and provides technical assistance.

Over 2014-2020, cohesion policy is investing some EUR 71 million in energy efficiency and renewable

energy improvements in public and residential buildings and enterprises, as well as in renewable

energy and smart electricity distribution grids in the Netherlands. Cohesion policy is also investing

significantly in R&I and in SME competitiveness in the Netherlands, based on the regional strategies

for smart specialisation. For the Netherlands, the strategies include a focus on low-carbon

technologies. At this stage, at least EUR 50 million is foreseen for investments in R&I and adoption of

low-carbon technologies in the Netherlands, but this is expected to increase further in line with the

evolving content of the smart specialisation strategy.

ERDF and Cohesion Funds allocation on energy,

low-carbon transport and low-carbon R&I

Total alocation [mn EUR]

121

140

120

[Million EUR]

100

Energy and Low-carbon R&I

Low-carbon transport

(source: DG REGIO)

investments are expected to contribute to around 1,000 households with improved energy

consumption classification and around 70 MW of additional capacity of renewable energy

production. For example, the project partners of Oosterschelde Tidal Power, including SMEs and

knowledge institutions, are developing a power plant and test centre on the Eastern branch of the

river “ heldt to

further explore the potential of tidal energy while at the same time providing power

to 1,000 households. The contribution from the European Regional Development Fund (ERDF) 2014-

2020 amounts to EUR 745 000.

As another example, households are increasingly turning in to producers of energy who could be able

to supply their locally produced energy to the energy market. With the support of the 2007-2013

European Regional Development Fund (ERDF) programme "North", Hanze University Groningen, the

hese

Energy Union

–The

Netherlands

University of Groningen, the Energy Research Centre of the Netherlands ECN, Gasunie Engineering &

Technology, TNO-ICT, and Icopal BV under the project "Flexines" are jointly developing applications

that will facilitate the entrance of households in this market and to help them make the right choices,

as suppliers and as users. The contribution from the ERDF was EUR 448,000.

Through its support to sustainable transport systems, The Connecting Europe Facility (CEF) also

contributes to the goals of the Energy Union. Following Dutch participation to the CEF

–

Transport

2014-2015 Calls, the Dutch action portfolio comprises 38 signed grant agreements, allocating EUR

260.3 million of actual CEF Transport Funding to Dutch beneficiaries (state-of-play February 2017)

The transport mode which receives the highest share of funding is rail (40% of actual funding);

however, road has the highest number of actions.

The Netherlands are highly investing in Rail and the development and implementation of the

European Railway Traffic Management System (ERTMS). The highest co-funding is allocated to the

realisation of the new Theemsweg railway section in the Port of Rotterdam, which will remove the

bottleneck in the rail freight access of main port Rotterdam towards three Core Network Corridors

connecting the port with its European hinterland. The other studies within rail concern cross-border

rail connections. The CEF Programme contributes to the improvement of the Dutch Road network by

co-funding the development of new technologies and innovation, the deployment of Intelligent

Transport Systems and Services (ITS) and safe and secure infrastructure. In terms of new

technologies and innovation five multi-national actions are supported. These actions concern studies

including real-life pilots aiming at greening road freight transport, public and private transport

through the promotion of the use of LNG, hydrogen and electric-driven vehicles. The Netherlands

also demonstrate a strong commitment in promoting the use of LNG as a marine fuel, improving the

environmental performance of maritime transport via the deployment of new technologies on

vessels and supporting compliance with Marpol Annex VI rules.

Note that European Economic Interest Groups and International Organisations are excluded from the

analysis.

Source: INEA