The Renewable Energy Transition
A Comparative Case Study on the Netherlands and Germany
Source: catracalivre.com.br
MSc Thesis Political Science: International Relations Research Project: The Political Economy of Energy University of Amsterdam: Graduate School of Social Sciences
Amsterdam, June 22nd, 2018
Author: Supervisor and second reader: Rein Schaafsma Dr. M.P. (Mehdi) Amineh
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2 Table of Contents
Acknowledgements ... 4
Maps ... 5
List of abbreviations ... 7
List of figures and tables ... 8
Abstract ... 9
Chapter 1: Research Design ... 10
1.1 Introduction ... 10
1.2 Literature review ... 11
1.3 Theory and concepts ... 14
1.4 Brief argumentation and hypotheses ... 17
1.5 Data and methods ... 18
1.6 Structure of the thesis ... 20
Chapter 2: The energy situations in the Netherlands and Germany ... 22
2.1 Introduction ... 22
2.2 Energy Situations ... 23
2.2.1 The Global energy situation ... 23
2.2.2 The Dutch energy situation ... 23
2.2.3 The German energy situation ... 27
2.2.4 Comparison of energy situations ... 30
2.3 Renewable energy situations ... 32
2.3.1 The Global renewable energy situation ... 32
2.3.2 The Dutch renewable energy situation ... 33
2.3.3 The German renewable energy situation ... 34
2.3.4 Comparison of renewable energy situations ... 35
2.4 Conclusions ... 37
Chapter 3: The relation between the government, businesses, and green movements in the Dutch and German energy sectors ... 38
3.1 Introduction ... 38
3.2 Governments and political elites ... 39
3.2.1 The Dutch government and political elite ... 39
3.2.2 The German government and political elite ... 40
3.3 Market actors ... 41
3.3.1 The power and influence of corporate elites ... 41
3.3.2 Dutch market actors ... 42
3.3.3 German market actors ... 46
3.4 Green movements ... 49
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3.4.2 German green movements ... 50
3.5 Conclusions: a comparison between the Netherlands and Germany ... 51
Chapter 4: Policy implementation and results in the Netherlands and Germany ... 54
4.1 Introduction ... 54
4.2 The Netherlands ... 55
4.2.1 Policy strategy ... 55
4.2.2 Renewable energy policies ... 55
4.2.3 Policy results ... 60
4.3 Germany ... 63
4.3.1 Policy strategy ... 63
4.3.2 Renewable energy policies ... 64
4.3.3 Policy results ... 68
4.4 Comparison between the Netherlands and Germany ... 70
4.5 Conclusions ... 73
Chapter 5: Conclusions ... 74
Bibliography ... 79
Appendix 1: EZK interview ... 85
Appendix 2: Shell interview ... 88
Appendix 3: DRIFT interview ... 100
Appendix 4: GasTerra interview ... 115
4 Acknowledgements
With this thesis, my time as a student has come to an end. This does however not mean that I will stop learning and developing myself. Instead, this thesis can also be seen as a beginning, the start of a new period in which I will continue to find exciting challenges that will shape me. I am confident that in my future life, I can apply the knowledge and insights I gained by making this thesis, the apex of the past five years in which I learned and developed myself.
Throughout the process of making this thesis, I could count on continuous guidance and assistance from my supervisor, Dr. Mehdi Amineh. He introduced me to the subject of the political economy of energy and he enthusiastically provided the required feedback. Without him, this thesis would not be what it is now. In addition, my appreciation goes out to my second reader, Dr. Wina Crijns-Graus, for her comments on my work. I would also like to express my thankfulness to my peers Irene and Suzanne, with who I conducted interviews and who gave me support and useful feedback. Also, I want to thank my interviewees for their willingness to share their knowledge and perspectives. And last but not least, I could rely on my friends and family, who helped me to stay focused and motivated me at all times.
5 Maps
The Netherlands
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Germany
7 List of abbreviations
BMWi Federal Ministry of Economic Affairs and Energy (Germany) BOE/D Barrels of Oil Equivalent Per Day
BMU Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (Germany)
CBS Central Bureau for Statistics (the Netherlands) CCS Carbon Capture and Storage
DEN-B Sustainable Energy in the Netherlands; B variation DRIFT Dutch Research Institute For Transitions
EEG Renewable Energy Sources Act (Germany)
EU European Union
EIA Energy Information Administration (United States) ETP Energy Transition Program (the Netherlands)
EZK Ministry of Economic Affairs and Climate (the Netherlands) FDC Federal Cartel Office (Germany)
FNA Federal Network Agency (Germany) GDP Gross Domestic Product
GHG Greenhouse Gas
IEA International Energy Agency kWh Kilowatt hour
MEP Environmental Quality of Electricity Production (the Netherlands) Mtoe Million tonnes of oil equivalent
NEO National Energy Outlook (the Netherlands)
PBL Environmental Assessment Agency (the Netherlands)
PV Photovoltaic
REN21 Renewable Energy Policy Network for the 21st Century TFE Taskforce Energy Transition (the Netherlands)
TOE Tonnes of Oil Equivalent TPES Total Primary Energy Supply
SDE Stimulation of Sustainable Energy Production (the Netherlands) SER Socio-Economic Council (the Netherlands)
8 List of figures and tables
Figure 2.1: Total primary energy supply by source, the Netherlands 26 Figure 2.2: Electricity generation by source, the Netherlands 26 Figure 2.3: Final energy consumption by sector, the Netherlands 27 Figure 2.4: Total primary energy supply by source, Germany 29
Figure 2.5: Electricity generation by source, Germany 30
Figure 2.6: Final energy consumption by sector, Germany 30
Figure 2.7: Energy production by source, the Netherlands 32
Figure 2.8: Energy production by source, Germany 32
Figure 2.9: Share of energy consumption from renewable energy sources 36 Figure 2.10 Share of renewables in gross final energy consumption 36
Table 1: Overview of actors in chapter 3 39
Figure 3.1: Shares of the four strongest suppliers on the market for the
first-time sale of electricity in Germany (excluding renewable energy) 49 Table 2: Overview of production subsidies in the Netherlands 58 Figure 4.1: Subsidies by electricity source under the MPE and SDE(+) 59 Figure 4.2: Financial support by energy source under the EEG, 66 Figure 4.3: Share of energy from renewable sources in gross final
Consumption of energy, 2004-2016 (%) 70
Figure 4.4: Share of solar PV in the gross final consumption of
renewable energy, 2000-2016 (%) 70
Figure 4.5: Share of energy from renewable sources in the primary energy
production, 2000-2016 (%) 71
9 Abstract
This research analyzes why the renewable energy transition and solar energy sector development in Germany was more successful than in the Netherlands. In order to substantiate this, a comprehensive context is established that sets out the stimulating or impeding dynamics for the Dutch and German energy transitions. The applied approach in this research identifies the prevailing wealth-power structures in the Netherlands and Germany, and analyzes the emanating relations between the government, market actors, and social forces in the energy sectors of both countries. In doing so, this research demonstrates that the Dutch wealth-power structure has been more dependent on fossil fuels than Germany’s wealth-power structure, which strengthened the ties between the Dutch government and the fossil fuel industry, giving the fossil fuel industry more power and influence in the Netherlands than in Germany. This was and still is a considerable impediment for the Dutch renewable energy transition. The German renewable energy transition, by contrast, experienced less resistance and more stimulation. Accordingly, this research provides insights in the dynamics that can impede or stimulate renewable energy transitions, thereby contributing to the scientific debate on factors that cause a renewable energy transition to be successful or not.
Keywords: Renewable energy transition, solar (PV) energy, energy policy strategy, the
10 Chapter 1: Research Design
1.1 Introduction
This research focuses on the renewable energy transitions in the Netherlands and Germany, thereby aspiring to find out why the German renewable energy transition was more successful than the Dutch renewable energy transition. In order to accomplish this, the renewable energy transitions of the Netherlands and Germany in the period of 2000-2018 will be analyzed from a comparative perspective, with a slight focus on solar photovoltaic (PV) energy. Therefore, the central research question is as follows:
What has caused the renewable energy transition and development of the solar energy sector in Germany to be more successful than the renewable energy transition and development of the solar energy sector in the Netherlands?
In answering this question, the emphasis lies on the different socio-economic configurations of the Netherlands and Germany, and how they have influenced the renewable energy transition trajectories in both countries. To make the research more structured, the body of this research is subdivided into three chapters with a sub-question each:
Chapter 1: What are the energy situations of the Netherlands and Germany?
Chapter 2: What is the relation between the government, businesses, and green movements in the Dutch and German energy sectors?
Chapter 3: What are the Dutch and German policy strategies and their results regarding the renewable energy transitions in the Netherlands and Germany?
In order to provide coherent and substantiated answers to these questions, a comparative case study on the Netherlands and Germany will be conducted. These two countries were selected because the Netherlands is a relatively poorly performing country and Germany is a relatively well-performing country in the field of energy transition and solar energy. By conducting a comparative case study on the Netherlands and Germany, this research aspires to gain valuable insights in and shed light on the processes, factors, and dynamics that can impede or stimulate a successful energy transition in general, and, more specifically, the development of a strong solar energy sector.
This research is valuable because more and more countries are urged to make a transition from traditional fossil fuel-based sources of energy to renewable sources of energy.
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This is not only because of the diminishing fossil fuel stocks all over the world, but also because of the aggravating pressure on the environment due to the use of unsustainable sources of energy, such as oil and coal (Hanif, 2017). The relevance of this research is, therefore, that it provides insights on factors that impede or stimulate an energy transition to renewable energy and, specifically, the development of a strong solar energy sector. Ideally, the insights of this research can contribute to energy transitions worldwide, thereby mitigating environmental harm. A successful energy transition can also contribute to the economic growth of a country, which, in turn, provides jobs and potentially stimulates social security (Rodríguez-Huerta et al., 2017).
The timeframe of the research will be 2000-2018, since an essential, EU-wide motivation for the development of renewable energy was established by the EU Green Paper, which was published in 2000. In response, many advanced renewable energy policies and strategies were implemented in the Netherlands and Germany shortly after 2000, such as the German Renewable Energy Act and the Dutch Energy Transition Program. In terms of geographical delineation, the research will be mostly confined to the national borders of the Netherlands and Germany, which are visualized in the ‘Maps’ section.
1.2 Literature Review
Fouquet and Pearson (2012: 1) define ‘energy transition’ as “the switch from an economic system dependent on one or a series of energy sources and technologies to another”. In general, an energy transition can occur when the “energy services” of a new energy source become “cheaper than the incumbent energy source” (ibid.). An additional explanation for an energy transition to occur is that the “new energy source or its related technology offered enhanced characteristics (including ease of use, flexibility, and cleanness, or exclusivity, novelty or status) that consumers were willing to pay for” (ibid.).
A characteristic of energy transitions is that they are processes that develop gradually and often require a long time to be fully accomplished (Solomon and Krishna, 2011; Bonneuil and Boucekkine, 2016). Solomon and Krishna identify several factors that help to provoke an energy transition. The first factor is the exhaustion of local or regional energy supply, which is naturally accompanied by a growing scarcity. The second factor is the growing costs of a certain energy source “such as wood” relative to other sources “such as coal” (Solomon and Krishna, 2011: 7422). This factor is especially stimulating when the costs of the other energy source is declining at the same time. The third factor relates to the pollution of the
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environment and occurs, for example, when “air or water pollution from energy use becomes so serious, such as from coal, … that an alternative energy source becomes more attractive” (ibid.). The fourth factor concerns technological development and emphasizes that energy transition are sometimes required in order to make use of a new technology, such as electrification to use electrical equipment. The fifth and last factor that is provided states that “efficiency improvements in existing economic activity”, such as the steam engine, are able to advance and stimulate a transition from one resource to another (ibid.).
With regard to the renewable energy transition in specific, Solomon and Krishna state that it will be unavoidable in the long term since the world is “facing global climate change and increasing scarcity and expense of petroleum” (ibid.). In addition, they state that it is difficult to indicate how long the renewable energy transition will take because there are still relatively large stocks of coal and the future of nuclear power is rather uncertain (idem: 7422-7423).
“Direct regulation” is mentioned as the essential policy measures to encourage a renewable energy transition (idem: 7428). The strength of policy tools, such as “R&D funding, taxes, and government subsidies” to stimulate an energy transition, highly depends “on a country’s political economy” (ibid.). For example, in countries “with a more centralized economy such as China have a greater ability to control energy supply and consumption patterns, and thus to transition between major energy sources more rapidly” (ibid.). In addition, research and technology development, deployment policies, governmental backing of R&D, strong networks, favorable economic circumstances, and renewable energy transition mandates are identified as crucial stimulants in the process to achieve renewable energy transition (Solomon and Krishna, 2011; Lutz et al., 2017). Impediments for renewable energy transitions, on the other hand, can arise from societal opposition against renewable energy sources (Susser et al., 2017).
It is stressed that in the Dutch energy policy making apparatus, there is a strong focus on economic interests, which has been an impediment to the renewable energy transition (Oteman et al., 2014; Laes et al., 2014). Furthermore, the strong fossil fuel industry in the Netherlands is marked as another impediment to the Dutch renewable energy transition (Oteman et al., 2014). In addition, the absence of a strong renewable energy industry in the Netherlands relates to this point and, in turn, weakens the position of Dutch renewable energy interest groups even more, especially with the absence of influential NGOs to stimulate the development of renewable energy (ibid.).
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successfully stimulated by a society-wide support for renewables and effective and directed policies to promote renewable energy (Oteman et al., 2014; Laes et al., 2014; Pegels et al., 2014). The literature also mentions that, in Germany, investing in renewable energy was attractive for businesses since renewables were perceived as an economic opportunity (Pegels et al., 2014; Laes et al., 2014).
With the regard to the development and diffusion of solar energy in a general sense, Chowdhury, Sumita, Islam, and Bedja (2014: 292) identify that it is “highly dependent on government support to reduce costs”. It is also stated that one of the biggest weakness of solar energy is the unsteady generation of power, which demands sufficient (governmental) interference in the form of financial support and or innovative programs (Chowdhury, 2014: 292). When focusing on Dutch solar (PV) energy, several authors mention that the development of solar energy in the Netherlands has been constrained by ineffective and volatile governmental policies (Verhees et al., 2013; Huijben and Verbong, 2013). The success of German solar energy, on the other hand, was owed to a myriad of stimulating policies (Chowdhury et al., 2014).
All in all, it can be stated that a lot of research has been done on the renewable energy transitions and solar energy sectors in the Netherlands and Germany. The general renewable energy transitions and solar energy sectors have been analyzed extensively and both stimulating and impeding factors have been identified and debated upon. The relative failure of the Dutch renewable energy transition has been attributed to various causes by the academic literature. A reoccurring cause for the unsuccessful Dutch renewable energy transition, which is often stressed in the literature, are the ineffective and unstimulating policies by the Dutch government, which never assumed a guiding role. As for the German case, the relative success of the renewable energy transition has been attributed to a society-wide support for renewables and effective and ambitious federal policies, implemented by an actively steering government.
The addressed academic literature mostly approaches the Dutch and German renewable energy transitions from one or two perspectives. The literature thereby attributes the (un)successful energy transitions in the Netherlands and Germany to various causes, such as styles of transition management (Laes et al., 2014), market- and institutional structures (Oteman et al., 2014), or policy measures (Pegels et al., 2014). These causes are often interconnected, overlapping, and reinforce each other. In many cases, the literature discusses the characteristics of these causes and their influence on the renewable energy transitions without providing a substantiated analysis that explores how underlying circumstances and
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dynamics formed these factors.
The relevance of this research in the existing academic debate therefore is that it provides a comprehensive context that sets out the underlying dynamics that conceived and perpetuate the causes that have impeded or stimulated the Dutch and German renewable energy transitions. It does so by identifying the wealth-power structures in the Netherlands and Germany and by analyzing the relations between the government, market actors, and social forces in the energy sectors of both countries. Subsequently, it establishes how this influenced and determined the renewable energy transition trajectory and solar energy sector development in the Netherlands and Germany. Therefore, this research will provide useful insights into how economic interests and relations between state and society contribute to or impede renewable energy transitions and the development of solar energy sectors.
1.3 Theory and concepts
An energy transition from fossil fuel sources to renewable sources creates tensions in the energy sector of a given country because dominant actors in the energy regime experience pressure to change their practises (Bosman et al., 2013: 6). Consequently, the dominant actors in the energy regime try to adapt to the changing situation by technological innovations, such as carbon capture and storage (CCS) and increasing energy efficiency, which are developments that can uphold most of the existing structure of the energy regime (ibid.). Because of the reinforcement of structures and habits throughout the years and related investments, an energy regime can only adapt to a limited extent (ibid.).
When a transition is in its early stages, there is often resistance from the regime through a lack of urgency, unfavourable policies and regulations, unfeasible alternatives, or a future perspective that is inadequately supported by society (ibid.). If the pressure on an energy regime is sufficient, a tilting point can occur, thereby accelerating the transition through rapid developments, as was the case in Germany (ibid.). Later on, stabilization occurs in the involved societal arrangements and the energy transition is successfully accomplished (Bosman et al., 2013: 6-7). As a result of increasing pressure in the early stages, some actors in the energy regime try to reposition themselves by, for example, proposing gas as an essential fuel to bridge the transition from fossil fuels to renewables (Bosman et al., 2013: 7). Simultaneously, tensions between actors with different interests increase and conflicts may arise (Bosman et al., 2013: 8). That is, in the context of a renewable energy transition in a given country, “Actors with different powers and interests within the regime play critical roles in setting the policy agenda, shaping the discourse and framing, supporting or suppressing
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niches, or just lobbying to obstruct or promote legislation” (Andrews-Speed, 2016: 218). In practise, business actors with vested interests in fossil fuels try to slow down the transition, while green movements aim to accelerate it (Bosman et al., 2013). The ability of these actors to do so and “bring about institutional change, depends, in part, on the political culture of that society” (Andrews-Speed, 2016: 220).
In this research, it is therefore important to identify the prevailing wealth-power structures in the Netherlands and Germany as well as the state and market relations in the energy sectors of both countries, thereby illustrating the political culture of Dutch and German society. To identify the wealth-power structures and to analyze the state and market relations of the Netherlands and Germany, elements of geopolitical economic theory as articulated by Amineh and Guang (2017) will be used. These elements pertain to the domestic sphere because this research focuses on the domestic situations of the Netherlands and Germany, and not on cross-border activities. Wealth-power structures are essential to analyse in this research because the accumulation of wealth through economic activities depends on energy, which is required to uphold the “wealth and power structures” of countries (Amineh and Guang, 2017: 18). When, for example, fossil fuels are important for the accumulation of wealth in a certain country, the wealth-power structure of that country is dependent on fossil fuels, which can be a serious impediment to a renewable energy transition. That is because, in this case, both the government and market actors rely heavily on fossil fuels for the accumulation of wealth and securing prosperity, making them resist structural changes that threaten their economic prospects. Accordingly, a wealth-power structure can determine the configuration of a country’s state-society complex, which is the relation between the government, market actors, and social forces (Amineh and Guang, 2017).
In geopolitical economic theory, a distinction is made between authoritarian or centralized state-society/market complexes and liberal state-society/market complexes (Amineh and Guang, 2017: 12). In a centralized state-society complex, which can be found in China, “civil society, based on social classes and forces, especially a business class, is non-existent, underdeveloped, or too weak to act independently of state power” (Amineh and Guang, 2017: 13). As a result, “these forces are incorporated into the centralized system of governance” (ibid.). Correspondingly, the state dictates the “long term, strategic orientation of society” instead of “the self-regulating market with its strong capitalist class” (Amineh and Guang, 2017: 13).
Both Germany and the Netherlands have liberal state-society complexes, in which market actors have significant influence in the political arena and policy-making processes
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(Amineh and Guang, 2017). As a consequence, this means that “privately owned corporations are able, to a certain extent, to operate independently of the state” (Amineh and Guang, 2017: 14). In countries where a liberal state-society complex is present, civil society is able to exert pressure upon the state (Amineh and Guang, 2017). In addition, the policymaking processes of liberal state-society complexes are often characterized by a strong focus on business interests, which is “reflected in the revolving between state and class” (Amineh and Guang, 2018: 12).
The relation between the political sphere and the market can be identified by analysing the relation between the political elite (government and influential officials.) and dominant figures from the business class (CEO’s). It has to be stated that in countries with a liberal state-society complex, the state- and market-actors can be regarded as interdependent, although the exact configuration of the relation between state and market often differs per country. That is, the state depends on taxes originating from the accumulation of capital, and the market “requires state protection and regulation to survive” (Amineh and Guang, 2017: 32). Therefore, the interrelation between governments, market actors, and social forces in the Netherlands and Germany will be analysed to concretize and specify the exact configuration of the Dutch and German state-society complexes. Energy is an essential element herein since it provides continuity and enables the existing economic (power) structures within a country to prevail (ibid.).
The establishment of the wealth-power structures and state-society complexes is essential when comparing two countries in a comparative case study with a focus on the political economy of energy, since wealth-power structures tend to heavily influence and determine state-society complexes and therefore the course of renewable energy transitions and the development of certain energy sectors.
A variable which is structural and virtually applicable to every country is the industrial capitalist development and ensuing industrialization, which boosted energy demand, thereby creating the conditions for environmental harm and resource scarcity worldwide (Amineh and Guang, 2017). As a consequence, the world cannot maintain the current ways of production that are powered by traditional fossil fuel-based energy sources and many societies are in dire need of a renewable energy transition to ensure energy security.
In the realm of energy, there is a categorization of “demand-induced, supply-induced, and structural scarcity, that can exist alongside each other” (Amineh and Guang, 2017: 17). As a result of scarcity, there is an increased lateral pressure upon national governments to ensure a supply of energy, which is exerted by domestic forces. Therefore, “these forces
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provide the context for energy policy objectives of advanced and emerging economies” (ibid.). In many countries, an energy transition plays a major role in this context since it can, in some cases, alleviate the problems caused by energy scarcity. “lateral pressure refers to the build-up of socio-economic pressures on the government by forces released by market actors in order to expand economic transactions beyond state boundaries” (Amineh and Guang, 2017: 27). When it comes to renewable energy transitions, lateral pressure is highly relevant to analyze because it “refers to any societal demand that cannot be met by available domestic resources” (ibid.).
All in all, an energy transition creates tensions, pressures, and resistance in the energy sector of the country in which the transition takes place. When the pressure increases, dominant actors in the energy sector try to reposition themselves by, for example, promoting gas as transition fuel or reducing GHG emissions. These repositioning efforts can be regarded as attempts to uphold the existing economic structure of the energy sector under pressure. In the case of a renewable energy transition, actors with different interests play an essential role in determining policy. Fossil fuel-based businesses aim to slow down, while green movements aspire to accelerate the renewable energy transition. The capacity of these actors to slow down or accelerate depends on a country’s political culture, which is in this research determined by the wealth-power structure and the relation between the state and market.
1.4 Brief argumentation and hypotheses
As articulated by the theoretical framework, the initiation, trajectory and the success or failure of an energy transition in a given country is not only determined by the wealth-power structure, but also by the emerging composition of the interrelation between the government, market actors, and social forces. That is, when the accumulation of wealth in a given country is for a large share dependent on fossil fuels, it is likely that the corresponding state-society complex is configured in a way that protects the interests of the fossil fuel sector, which tends to be an obstruction to a renewable energy transition. If, on the other hand, the accumulation of wealth in a certain country is less dependent on fossil fuels, it is less likely that the corresponding state-society complex is configured in a way that protects the interests of the fossil fuel sector, thereby giving less resistance to a renewable energy transition. When applying this line of reasoning to the Netherlands and Germany, it would mean that the Dutch economy is more dependent on fossil fuels for the accumulation of wealth than the German economy. Therefore, the Dutch government would have a higher interest in protecting the fossil fuel sector than the German government. Thus, market actors whose revenue is largely
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based on fossil fuels would have more power and influence in the Dutch state-society complex than in the German state-society complex. Correspondingly, this would mean that green movements in favour of a renewable energy transition have less power and influence in the Netherlands than in Germany. This, in turn, would be a large impediment for the Dutch renewable energy transition and would explain why the German renewable energy transition has been more successful. The line of reasoning described in this section will be analysed throughout this research and constitutes the following two hypotheses:
H1: Since the Dutch wealth-power structure is dependent on fossil fuels, large, fossil based energy companies have a high degree of political influence and green movements are less influential in the Netherlands, which has been an impediment to the renewable energy transition and the development of Dutch solar energy.
H2: Since the German wealth-power structure is less dependent on fossil fuels, green movements have a higher amount of political influence and large fossil fuel-based energy companies are less influential in Germany, which has stimulated the renewable energy transition and the development of a strong solar energy sector.
1.5 Data and methods
The research method that will be employed to answer the research question will be mostly based on qualitative methods. This research includes textual analysis of peer-reviewed theoretical articles, books, and policy papers provided by Dutch and German governmental institutions. In order to get a grasp of the energy situations of the Netherlands and Germany, data provided by companies, governments, and specialized organizations, such as the World Bank, Eurostat, and IEA will be analyzed. Through the research conducted through both textual- and data-analysis, the activities of the governments, most dominant market-actors, and green movements in the Dutch and German (solar) energy sectors will be compared, explored, and the interplay between them will be analyzed. In addition, interviews with a policymaker, business representatives, experts, and a politician will be conducted to gain better insights in the practicalities involved in the Dutch and German renewable energy transitions. When it comes to identifying the state-society complexes of the Netherlands and Germany, the relation between the government, dominant market actors, and social forces needs to be analyzed. Important to note is that the main objective of the research is to analyze the interplay between the actors, and not to provide an in-debt analysis of the activities of all the individual actors.
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Governments and their related institutions are the main policymaking actors when it comes to renewable energy policy. To what extent they are susceptible to pressure exerted by market or social actors depends not only on the power of other actors, but also on their own interests and the power structures in which they operate. To analyze the influence of governmental actors on the renewable energy transition and solar energy sectors, mainly policy papers provided by the abovementioned institutions, peer-reviewed articles, and data provided by governments themselves will be studied.
In both the Netherlands and Germany, the dominant actors on the energy market will be analysed. Analyzing these market actors is essential in this research because, according to geopolitical economic theory as articulated by Amineh and Guang (2017), corporations are able to influence politics and policymaking in liberal state-society complexes. These liberal state-society complexes, in turn, are found in both the Netherlands and Germany, albeit in different forms. Since corporations have considerable influence in (energy) policies, it is of high importance to analyze to what extent they impede or stimulate a renewable energy transition. In order to establish how corporations influence the renewable energy transition, policy documents provided by governments, peer-reviewed articles and books, and company data will be analyzed. Company data and strategies will be mostly gathered from the annual reports published by the companies under analysis (e.g., Shell Annual Report 2016, RWE Annual Report 2016).
In both countries, the social forces that will be analyzed include green movements, such as GroenLinks and Die Grünen. As specified by Amineh and Guang (2017), social forces are able to exert pressure upon the state in countries where the liberal state-society complex is prevalent, such as the Netherlands and Germany. Therefore, it is important to include green movements in the analysis since they can urge governments to implement extended policies to ensure and stimulate a renewable energy transition.
By mapping out the activities and interrelations of all these parties through the analysis of primary and secondary data, the state-society complexes and the dynamics involved in both the Dutch and German (solar) energy sectors can be further uncovered and analyzed in a more detailed way. By doing all this, a substantiated answer can be provided to the main research question and the related sub-questions.
20 1.6 Structure of the thesis
In order to provide a comprehensive answer to the main research question, this thesis is structured in five chapters.
The second chapter provides an overview of the energy situations of the Netherlands and Germany. In order to do this, data on energy production and consumption will be explored as well as energy imports and exports. The purpose hereof is that it creates the general energy context upon which the following chapters of the thesis can build further. In addition, this chapter elaborates on the prevailing wealth-power structures in both countries. Therefore, the guiding sub-question of the second chapter will be the following: What are the energy situations in the Netherlands and Germany? To answer this question, the general energy situations in both countries will be analysed. In the second section, the renewable energy resources in both the Netherlands and Germany will be reviewed. By doing so, this chapter serves as an introduction to the energy-dependent wealth-power structures of the Netherlands and Germany.
The third chapter focuses on the role of government institutions, business actors and green movements in the Dutch and German energy sectors. In doing so, the interrelation of these actors in the sphere of energy will be explored and analysed from a comparative perspective. The purpose of this chapter is, therefore, to explore and identify the how the Dutch and German wealth-power structures are reflected by the energy sectors in the Netherlands and Germany, thereby illustrating the relation between the state and (energy) market in both countries. As a result, the central sub-question of the third chapter is as follows:What is the relation between the government, market actors, and green movements in the Dutch and German energy sectors? In answering this question, this chapter analyses the position of the government or political elite, the roles of business actors, and the influence of green movements in the Dutch and German energy sectors, thereby also exploring the relation between the involved actors and establishing the configuration of the state-society complexes in both countries
The fourth chapter researches how the previously mentioned wealth-power structures and state-society complexes influenced the development of Dutch and German renewable energy by focusing on the implementation of policies and results with regard to the renewable energy transitions and solar energy sector development in the Netherlands and Germany. In doing so, this chapter builds upon the previous chapters, which contributes to understanding how the different configurations of the energy sectors in the Netherlands and Germany caused the German renewable energy transition to be more successful than the Dutch renewable
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energy transition. The following sub-question is central in this chapter: What are the Dutch and German policy strategies and their results regarding the renewable energy transitions in the Netherlands and Germany? In this chapter’s analysis, the energy policy strategies of the Netherlands and Germany will be set out. Also, the national renewable energy policies in both countries will be analysed, thereby illustrating how they were created and implemented. In addition, this chapter focuses on the results of the energy policies for the Dutch and German renewable energy transitions in general. Ultimately, the impact of the renewable energy policies on the development of the solar energy sector in the Netherlands and Germany will be examined.
The fifth and final chapter is comprised of the conclusions and recommendations. This chapter summarizes the findings of each chapter and answers the main research question. In addition, chapter 5 provides insights and recommendations.
22 Chapter 2: The Energy Situations in the Netherlands and Germany
2.1 Introduction
As articulated by the theoretical framework and literature review in chapter 1, a country’s wealth-power structure can influence a renewable energy transition to a large extent. When, for example, the accumulation of wealth through economic activities is highly dependent on energy from fossil fuel resources in a given country, it is likely that the development of renewable energy is met with resistance because it can threaten the interests of the fossil fuel sector. Therefore, when analysing and comparing the renewable energy transitions in two countries, it is essential to give an indication of the nature of the wealth-power structures in both countries. Accordingly, the purpose of chapter 2 is to provide an overview of the energy situations of the Netherlands and Germany, thereby identifying the Dutch and German wealth-power structures. In doing so, this chapter creates the necessary general energy context upon which the following chapters of the thesis can build further. In order to paint a clear picture of the Dutch and Germany energy situations, data on energy production and consumption will be explored as well as more detailed data on the specific energy resources in each country. In addition, this chapter elaborates on the renewable energy resources that are currently present in both countries. Therefore, the guiding sub-question of this chapter will be the following: What are the energy situations in the Netherlands and Germany?
To answer this question, section 2.2 first gives a short overview of the global energy situation and subsequently focuses on the general energy situations and in the Netherlands and Germany from a comparative perspective, thereby also giving an overview of the Dutch and German economies in relation to energy. By doing so, section 2.2 provides the necessary context to analyse energy policy for the rest of the research. Section 2.3 serves to review and compare the current renewable energy resources and related developments in both the Netherlands and Germany. In addition, this section starts with a review of the current global renewable energy situation, thereby contextualizing the circumstances with regard to renewables in the Netherlands and Germany.
23 2.2 Energy Situations
2.2.1 Global Energy Situation
Currently, the global energy situation is experiencing ongoing and far-reaching changes. The stocks of fossil fuels and other non-renewable resources are diminishing worldwide and become more and more scarce (Werker et al., 2017; Schipperus and Mulder, 2015). At the same time, the global energy consumption continues to increase as a result of industrialization and population growth and this increasing consumption is projected to sustain for at least several decades (EIA, 2017). As a result, and in order to maintain a secure supply of energy, many countries and “stakeholders have explored alternatives such as solar, wind, geothermal, biogas and biowaste energy” (Werker et al., 2017: 10). Therefore, as of today, renewables are, globally speaking, “the fastest-growing energy source”, while “fossil fuels are expected to [continue to] meet much of the world’s energy demand” (EIA, 2017: 20). Of these fossil fuels, oil is still the biggest energy source, although its global share is gradually decreasing (ibid.). Natural gas, on the other hand, “is the world’s fastest growing fossil fuel, increasing by 1.4%/year”, while the growth rate of the use of coal is estimated to continue to be rather flat in the coming decades (ibid.).
2.2.2 The Dutch Energy Situation
Although modest progress in the field of sustainability and renewable energy has been made, the Netherlands can still be regarded as “one of the most fossil fuel- and CO2-intensive economies among IEA member countries” (IEA, 2014: 10). That is, since the Dutch economy heavily relies on energy-intensive industries, such as “petrochemical, iron and steel, horticulture and agriculture”, and the transport sector, fossil fuels make up approximately 93% of the energy mix (ibid.; IEA – the Netherlands, 2017). In addition, the Netherlands is home to a highly “competitive oil-refining” industry, illustrating the importance of fossil fuels for the Dutch economy (IEA, 2014: 9). Furthermore, when regarding the Dutch energy system from a more historical perspective, it can be stated that there are “large interests in the domestic gas industry, with gas revenues of 14 billion euros in 2012, and in the fossil fuel dependent heavy industry” (Oteman et al., 2014: 8). In addition, the Dutch government received 15.2 billion euros of gas revenue in 2013, reflecting the importance of gas for the accumulation of wealth of the government (ECN, 2014: 143). In the international energy
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trade, the Netherlands plays an important role, since it is “one of Europe’s largest hubs in energy trade and support energy security” (IEA, 2014: 9). The Netherlands has gained this status because of its “open market approach, [which] resulted in innovative, energy-efficient industrial processes” and its well-developed energy infrastructure (ibid.). When examining the statistics of the total value of Dutch export in 2016, it becomes clear that fossil fuels make up a relatively big share with approximately 12.2%, thereby illustrating the economic dependence of the Netherlands on fossil fuels (Harvard, 2017). In addition, petroleum products were the most important export and import products for the Netherlands in 2016 (WITS, 2018a). Also, in that same year, the share of fuels in the total value of Dutch export and import was 9.7% and 13.2% respectively (WITS, 2018b). Furthermore, in 2010, the energy sector accounted for 10.9% of the Dutch GDP, which is a considerable amount. When examining the contribution of the energy sector to the Dutch GDP from 2000 to 2016, it becomes clear that fossil fuels accounted for almost all the economic gains, while renewables accounted for only a marginal share of up to 0.2% of the Dutch GDP (ECN, 2017: 186). In terms of employment opportunities, the fossil fuel sector has also been more important, since from 2000 to 2016, the fossil fuel sector accounted for more than 40,000 jobs every year, while the renewable energy sector accounted for 1000 to 5000 jobs, although its share has been increasing through the years (ECN, 2017: 187). Therefore, fossil fuels have been a significant source of income and economic prosperity for the Netherlands throughout the years and were responsible for the acquisition of large amounts of revenue, while renewables have been relatively insignificant in an economic sense.
The total primary energy supply of the Netherlands amounted to 75.2 million tons of oil equivalent (Mtoe) in 2016 (IEA - the Netherlands, 2017). In the period of 2005-2016, the “gross final energy consumption fell steeply in the Netherlands”, mostly due to ongoing energy savings and policy actions (CBS, 2017c: 7). When analyzing the Dutch energy mix in a more detailed way and thereby examining figure 2.1, it becomes even more apparent how dependent the Netherlands is on fossil fuels for their energy supply security. In addition, the considerable share of natural gas, which is the Netherlands’ most important energy resource, has a lot to do with the vast reserves used for gas production in the Dutch province of Groningen, demonstrating the availability of fossil fuels in the geographical territory of the Netherlands. In this case, it has to be noted, however, that the production of gas is decreasing relatively quick, partly as a result of the increasing amount of earthquakes in Groningen, caused by the far-reaching exhaustion of gas reserves (IEA, 2014; Postma and Jansen, 2018). Consequently, “the Netherlands is expected to shift from a net exporter to a net importer of
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gas around 2025” (IEA, 2014: 10). This predicted shift can be perceived to have far-reaching consequences for the Dutch energy supply security since “industries (21%) and power generation (35%) rely on natural gas” (ibid.). In addition, essentially all Dutch households depend on gas for heating (ibid.). Therefore, the Netherlands is preparing its industry and other consumers for significant changes in the gas balance, which also poses a serious challenge for the Dutch energy security in the future (ibid.). This has to do with the fact that “when a country’s production of gas decreases and eventually stops, it will lose both a secure form of energy supply and a source of income” (Schipperus and Mulder, 2015: 117). For the Netherlands, an appropriate policy reaction to meet this challenge would be to import gas or to develop and utilize alternative forms of energy, such as renewables (ibid.).
For energy coming from oil and coal, which are the second and third most important energy sources, the Netherlands heavily relies on imports since it has relatively little oil resources and it does not produce coal (IEA - the Netherlands, 2017). In the Netherlands, oil is mainly used in the transport sector, where it is the predominant energy source, “and as a raw material in the chemical industry” (CBS, 2017c: 7). The consumption of oil continued to be more or less the same after 2005, which contributes to the forecast that oil will adopt the role of “natural gas as the largest energy carrier in the energy mix” (ibid.). As for coal, the recent operationalization of three coal-fired power plants boosted the consumption of coal, with a peak in the Dutch coal consumption around 2015 as a consequence. Furthermore, it is anticipated that the consumption of coal will “be above pre-peak levels” in the years to come (ibid.).
As illustrated by figure 2.2, the generation of electricity is also dominated by fossil fuel-based energy resources, although to a lesser extent than in the total primary energy supply. Nuclear power plays a marginal role in the Dutch energy system, which is reflected by minor investments in the nuclear sector and by the fact that there is only one operating nuclear power plant in the Netherlands (Oteman et al., 2014: 8). In addition, the Dutch government has initiated the process of phasing out nuclear energy completely, thereby discarding the nuclear option (ibid.). What needs to be clarified is that, of the 9% share of renewables in figure 2.2, solar energy accounts for 2% and wind energy accounts for 7%.
There are certain international developments in the international energy market that affect the Dutch electricity market, since the Dutch economy is open and highly influenced by trade. These developments include the “low carbon prices and the strong competitiveness of coal over gas in power generation in Europe” (IEA, 2014: 10). In addition, energy policy strategies in countries surrounding the Netherlands have the potential to influence the Dutch
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economy to a large extent, which, in its turn, can pose challenges to the Dutch energy policy strategy (ibid.).
According to the Dutch National Energy Outlook 2017 (NEO), “the Netherlands has been a net importer of electricity” during recent years (CBS, 2017c: 3). It is expected, nonetheless, that the import of electricity declines, which makes the Netherlands a net exporter after 2023 (ibid.). It has to be noted in this case that, since the Netherlands is highly dependent on international developments, it depends on the energy situations in other countries, such as Belgium and Germany (ibid.). In addition, the NEO observes that “the rate of energy savings is increasing” (CBS, 2017c: 4). This development, in turn, has the potential to influence the energy security of the Netherlands in a positive way. Another significant observation, which is also applicable to Germany and potentially affects the ongoing renewable energy transition, is that it is projected that the “prices for oil, gas, and CO2 will remain low until 2020” (CBS, 2017c: 6).
The data in figures 2.1 and 2.2 comes from Netherlands - Most Recent Key Energy Data (IEA - the Netherlands, 2017) 41% 14% 38% 1% 1% 5%
Figure 2.1: Total primary energy supply
by source, the Netherlands (2016)
Natural gas Coal Oil
Renewables Nuclear
Biofuels & waste
46%
35%
1% 9%
3% 6%
Figure 2.2: Electricity generation by
source, the Netherlands (2016)
Natural gas Coal Oil
Renewables Nuclear
27
The data in figure 2.3 comes from Final energy consumption by sector (Eurostat, 2018d)
2.2.3 The German Energy Situation
With its energy-intensive and large economy, Germany can be regarded as a big player in the global energy market with a high energy demand and as a “leading exporter of machinery, vehicles, chemicals, and household equipment” (IEA, 2013: 20). In 2016, Germany’s GDP was 3.478 trillion current US$, which makes it one of the largest economies in the world (World Bank, 2018). In addition, “Germany is the largest energy market in Europe” (Renn and Marshall, 2016: 225). Even though fossil fuels are still the most important energy source, renewables have been growing rapidly during last years and have become an essential source of energy in the German energy mix. When examining the statistics of the total value of German export in 2016, it becomes clear that fossil fuels make up only a marginal share with approximately 1.8%, thereby suggesting that the economic dependence of Germany on fossil fuels is relatively small, especially when compared to the 12.2% share of the Netherlands (Harvard, 2017). In 2016, the share of fuels in the total value of German exports and imports was 1.6% and 7.1% respectively, which is much lower than the Netherlands (WITS, 2018c). In the conventional German electricity sector, there were 117,000 jobs in 2015, while there were 330,000 jobs in the renewable energy sector, which indicates that the German conventional energy sector is economically less significant when compared to the Netherlands, while the German renewable energy sector is relatively more significant than the Dutch renewable energy sector (BMWi, 2016: 131-132)
The relatively large German coal sector, which is the biggest in Europe, produces high quantities of coal and still contributes to the German reliance on fossil fuels (IEA - Germany,
30%
29% 20%
7% 14%
Figure 2.3: Final energy consumption by
sector, the Netherlands (2016)
Industry Transport Residential
Agriculture/Forestry Services
28
2017; Renn and Marshall, 2016). There are, however, policies implemented with the ambition to gradually abandon coal production, but newly constructed coal-fired power plants, “representing one of the biggest investment waves into domestic coal capacities since the post-war reconstruction”, are not contributing to realize these ambitions (IEA, 2013: 10). Therefore, it is expected that coal will “remain a cornerstone of Germany’s electricity production well into the medium term” (IEA, 2013: 11).
Germany holds an important position in the European natural gas trade because of its strong “supply and storage infrastructure” and its capable domestic gas facilities (IEA, 2013: 10). The domestic gas market has advanced over the last years with increased competition as a beneficial consequence (ibid.). A paramount element in the German gas sector was the construction of the Nord Stream pipeline, which contributed to the “diversification of gas supply routes into Germany” (ibid.).
While the usage of oil has been decreasing during the last years, it still continues to be the most important German energy source (IEA, 2013; IEA - Germany, 2017). Since Germany has little domestic oil stocks, it is highly reliant on the import of oil to fulfill its high demands, with Russia as its most essential import partner (IEA, 2013; IEA - Germany, 2017). The German oil infrastructure is diversified and adequately flexible and is made up of various pipelines and import stations (IEA, 2013). Germany’s “domestic oil market is liberalized and characterized by a large number of market participants”, and the supply of oil is reliable and consistent (IEA, 2013: 10).
The total primary energy supply of Germany was 311.5 Mtoe in 2016 (IEA - Germany, 2017). In order to meet its high energy demand and “despite efforts to improve energy security through domestic production”, Germany is still dependent on the import of energy, which “account for 60% of total primary energy supply” (Renn and Marshall, 2016: 226). Figure 2.4 paints a more detailed image of the current German energy mix and shows that it is more diversified than the Dutch energy mix, with a bigger share of German energy coming from renewables, biofuels and waste, and nuclear power. Historically, the German nuclear sector has been relatively big and significant in the German energy system (Oteman et al., 2014). That is, at the historical peak, “coal and nuclear have made up more than 85% of Germany’s electricity generation” (Renn and Marshall, 2016: 224). However, as a result of widespread public pressure which was stimulated by numerous international nuclear disasters, such as the Fukushima calamity in 2011, the German government made the decision to speed up the termination of the nuclear energy program (IEA, 2013; Oteman et al., 2014; Renn and Marshall, 2016). The phasing out of nuclear energy, in turn, demands for further changes and
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policy measures in the German energy system to ensure energy security, such as stimulating the ongoing renewable energy transition while maintaining “a balance between sustainability, affordability and competitiveness” (IEA, 2013: 9). More concretely speaking, this means that nuclear power “will be replaced by electricity from renewable sources, natural gas turbines, a decrease in consumption and demand side management” (Oteman et al., 2014: 10).
Germany’s electricity generation, which is visualized by figure 2.5, is highly diversified and “benefits from strong interconnections with neighboring countries” (IEA, 2013: 11). Also, this electricity system has adequate energy production capacities, which has so far enabled it to endure the decreasing input of nuclear power over the past years (ibid.). The big share of renewables is especially notable and high in relation to other IEA countries. Of the 21% share of renewables in the total German electricity generation, 12% comes from wind power, 6% from solar power, and 3% from hydropower (IEA - Germany, 2017).
The Data in figure 2.4 comes from Germany - Most Recent Key Energy Data (IEA - Germany, 2017) 23% 24% 32% 4% 7% 10%
Figure 2.4: Total primary energy supply
by source, Germany (2016)
Natural gas Coal Oil Renewables Nuclear30
The data in figure 2.5 comes from Germany - Most Recent Key Energy Data (IEA - Germany, 2017)
The data in figure 2.6 comes from Final energy consumption by sector (Eurostat, 2018d)
2.2.4 Comparison of Energy Situations
The energy sectors of both the Netherlands and Germany are still dependent on fossil fuels and fossil fuels play a significant role in the economy of both countries. However, especially the Netherlands is highly reliant on fossil fuels for the accumulation of wealth and the realization of economic gains because of its role as a trading hub and its dominant industries which are mostly driven by conventional sources of energy (DRIFT researcher, 2018). In addition, the enormous gas reserves in Groningen have contributed to the fact that the Dutch
13% 43% 1% 21% 13% 9%
Figure 2.5: Electricity generation by
source, Germany (2016)
Natural gas Coal Oil Renewables NuclearBiofuels & waste
28%
30% 26%
16%
Figure 2.6: Final energy consumption
by sector, Germany(2016)
Industry Transport Residential Services
31
energy sector is still highly dependent on natural gas and rather undiversified, although the production of gas in the Netherlands is currently decreasing rapidly. In comparison with Germany, the economy of the Netherlands has, in the last decades, been more energy intensive, which means that the Dutch economy required more energy per unit of GDP than Germany (IEA, 2013, 2014). Also, the import and export of fuels and petroleum products has been far more important for the Netherlands than for Germany. For the coming years, it is predicted that the Dutch energy sector will continue to rely heavily on fossil fuels to ensure energy supply security. With regard to the Dutch electricity generation, fossil fuels are also dominant, while the role of nuclear power becomes increasingly more irrelevant. Furthermore, the share of renewables in the electricity generation is still relatively small and lags behind when compared with Germany and most other IEA countries
In the German energy sector, by contrast, renewables play a more important role. Even though this is the case, fossil fuels continue to be the main source of energy, with oil and coal as the most essential ones. For the accumulation of wealth and realization of economic gains, however, Germany is less dependent on fossil fuels than the Netherlands. In contrast to the Dutch energy mix, the German energy mix is comparatively diversified with a bigger role for renewables and nuclear power. With regard to German nuclear power, however, there have been made plans that it will be replaced by, among other things, renewable sources. Also the generation of Germany’s electricity is highly diversified, with an even bigger share of renewables in the mix. Ultimately, figures 2.3 and 2.6 show that the Dutch and German economic sectors have a comparable share in the final energy consumption, with the transport and industry sectors as the largest consumers. Figures 2.7 and 2.8 demonstrate that the energy sector of Germany highly diversified in comparison to the Netherlands. Striking is the immense share of natural gas in the Dutch energy production, which illustrates that, although the gas production is decreasing, the Dutch economy and society is still highly dependent on gas.
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The data in figures 2.7 and 2.8 is derived from the IEA website, Country balances for 2015.
2.3 Renewable Energy Situations
2.3.1 The Global Renewable Energy Situation
With regard to current global renewable energy trends, the Renewable Energy Policy Network for the 21st Century (REN21) argued in their Renewables 2017 Global Status Report that the “costs for electricity from solar PV and wind is rapidly falling”, which provides a positive outlook for the development of these specific forms of renewable energy worldwide (REN21, 2018). In addition, the report argues that these developments contribute to making renewables “now cost-competitive with new fossil fuel and nuclear sources, and even more so if distorting subsidies are taken into account (renewables receive only one-quarter of the subsidies given to fossil fuels)” (REN21, 2018: 9).
Apart from these positive global trends in the electricity segment, there are also more negative developments occurring. For example, the transport and heating and cooling segments worldwide are lagging behind when it comes to the use of renewable energy (REN21, 2018). That is because of fact that the growth of renewables in the global transport sector was especially weak, mostly due to the relatively high costs of implementation and high “barriers to electrification…[related] to the lack of a robust electricity supply” (REN21, 2018: 13). 82% 4% 2% 2% 10%
Figure 2.7: Energy production by source, the Netherlands (2015)
Natural gas Oil Renewables Nuclear
Biofuels & waste
5% 36% 3% 11% 20% 25%
Figure 2.8: Energy production by source, Germany (2015) Natural gas Coal Oil Renewables Nuclear
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2.3.2 The Dutch Renewable Energy Situation
When analyzing the current Dutch energy situation with regard to renewable energy, it becomes evident renewables play a relatively marginal role in the Dutch energy sector. That is because the Netherlands is still highly reliant on fossil fuel-based energy, especially in comparison with other countries. That is, when it comes to the total Dutch energy supply, renewables make up an approximate share of 6% – with biofuels and waste included – while the average of IEA countries is 10% (IEA - the Netherlands, 2017). In terms of electricity generation in the Netherlands, the share of renewables is somewhat higher with 15%, although still relatively low when compared with other IEA countries, who have an average share of 24% of renewables in their electricity generation (ibid.). Important to note here is that, of this 15% share, 6% comes from biofuels and waste, leaving only 9% for solar (2%) and wind energy (7%), which can be considered as a small share when compared with other advanced countries, such as Germany and Denmark (ibid.).
In the Dutch gross final energy consumption, renewable sources – biomass included – made up a share of 6% in 2016, which makes it nearly impossible for the Netherlands to reach its EU target of a 14% share of renewable energy by the year 2020 (CBS, 2017a; Dutch Government, 2017). From 2015 to 2016, energy consumption from solar and wind energy increased while energy consumption from biofuels and waste decreased, which resulted in only a slight increase in the consumption of renewable energy (ibid.). Within the total renewable energy consumption, biomass accounted for the largest share with 63%. Important to highlight is that while the consumption of biomass decreased by 2%, “solar and wind energy increased their shares by over 20% on average” (ibid.).
With regard to the total Dutch gross inland energy consumption in 2016, the share of renewables was 4.7%, in which solar energy accounted for a 0.2% share (Eurostat, 2018b). Although, this share may seem irrelevant at first sight, it must be noted that, during the last years, solar energy has grown significantly (CBS Statline, 2017). Wind energy accounted for a 0.9% share of the total Dutch gross inland energy consumption in 2016, making the wind energy sector more than 4 times bigger than the solar energy sector in this respect (Eurostat, 2018b.). In addition, the wind energy sector also experienced a significant and strong growth during the last years, albeit less rapidly than the solar energy sector (CBS Statline, 2017). A recent development for wind energy are the decreasing costs, which are especially applicable to offshore wind energy, which makes investing in wind energy projects in the North sea more attractive for the Netherlands (CBS, 2017c). The renewable energy resource with the
