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On the difference in progress between the Dutch and Swedish renewable

energy transition: the role of economic interests

MSc Thesis Political Science: European Politics & External Relations Research project: The political economy of energy 2018-2019

June 21st 2019, Amsterdam

Author: Gido ter Heijne UvA-ID: 10318453

Supervisor: Dr M.P. Amineh Second reader: Dr I. Verhoeven

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Abstract

The ‘logic of capitalism’ is used as a theoretical background for understanding the need for a renewable energy transition for environmental and economic sustainability. In the context of climate change mitigation, the EU established the 2020-goals which includes the objective that 20% of the total amount of energy consumed should come from renewable sources. However, some Member States progress faster than others. The Netherlands is an example of a slow transitioning country that may not reach its goal, whereas Sweden has already met its target. Four general constraining factors for the renewable energy transition prevail in the literature: economic interests, presence of fossil fuels, technological limitations and civil unwillingness. Of these reasons, economic interests seem to play a key role in explaining the difference in pace between the Dutch and Swedish renewable energy transition. A comparative analysis between the Netherlands and Sweden shows that economic interests indeed play a key role. To find out whether these economic interests are common to EU Member States in general or whether they are idiosyncrasies that resulted from country-specific characteristics, a random effects regression is conducted on the effect of economic interests of the government and the largest domestic energy companies on the difference in progress between EU Member States. It turns out that the identified economic interests are idiosyncrasies that result from country-specific characteristics of the economy, geography, and energy system of the Netherlands and Sweden. These results show that if there are negative economic interests regarding the renewable energy transition in certain Member States, they will not progress fast enough to meet EU targets as long as these are non-binding.

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Table of Contents

Acknowledgements ... 7

Maps ... 9

Map 1: Map of Europe ... 9

Map 2: Map of the Netherlands ... 10

Map 3: Map of Sweden ... 11

List of Abbreviations ... 12

List of tables and figures ... 13

Chapter 1: Introduction ... 15

1.1

Introduction ... 15

1.2

Literature review ... 16

1.3

Conceptual framework ... 18

1.4

Brief argumentation and hypotheses ... 23

1.5

Methods and data ... 24

1.6

Structure of the thesis ... 25

Chapter 2: A comparison of the Dutch and Swedish energy situation ... 27

2.1

Introduction ... 27

2.2

The EU energy production, consumption, and net imports ... 28

2.3

The Dutch and Swedish fossil fuel reserves and domestic energy production ... 32

2.4

The Dutch and Swedish domestic energy consumption ... 36

2.5

The Dutch and Swedish energy trade: imports and exports ... 41

2.6

Energy policies of the Dutch and Swedish governments within the EU framework 49

2.7

Conclusion ... 52

Chapter 3: Governments, large domestic energy companies, labor unions, green parties and

citizens in the nexus of the Dutch and Swedish energy transition ... 55

3.1

Introduction ... 55

3.2

Overview of the government interests in the renewable energy transition and its

direct relations with the largest domestic energy companies in the Netherlands and

Sweden ... 59

3.2.1. Overview of Dutch government interests in the renewable energy transition and

its direct relations with the largest domestic energy companies... 59

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3.2.2.

Overview of Swedish government interests in the renewable energy transition

and its direct relations with the largest domestic energy companies ... 60

3.3

Overview of the indirect relations between the government and the largest

domestic energy companies in the Netherlands and Sweden ... 61

3.3.1.

Overview of the indirect relations between the Dutch government and the

largest domestic energy companies ... 61

3.3.2.

Overview of the indirect relations between the Swedish government and the

largest domestic energy companies ... 63

3.4

Overview of the largest labor union’s interests in the renewable energy transition

and its relation with the government in the Netherlands and Sweden ... 64

3.4.1.

Overview of the largest Dutch labor union’s interests in the renewable energy

transition and its relation with the Dutch government ... 64

3.4.2.

Overview of the largest Swedish labor union’s interest in the energy transition

and its relation with the Swedish government ... 65

3.5

The role of green movements regarding the Dutch and Swedish renewable energy

transition... 66

3.5.1.

The role of green movements regarding the Dutch renewable energy transition

66

3.5.1.

The role of green movements regarding the Swedish renewable energy

transition ... 67

3.6

The role of citizens regarding the Dutch and Swedish renewable energy transition 67

3.6.1.

The role of citizens regarding the Dutch renewable energy transition ... 67

3.6.2.

The role of citizens regarding the Swedish renewable energy transition ... 68

3.7

Conclusion ... 69

Chapter 4: The effect of economic interests on the renewable energy transition within the

EU ... 73

4.1

Introduction ... 73

4.2

Brief argumentation and sub-hypotheses ... 76

4.3

The effect of economic interests of the government and the largest domestic

energy companies on the difference in progress between EU Member States regarding

the renewable energy transition ... 78

4.4

The effect of economic interests of the government and the largest domestic

energy companies on the share of renewable energy consumption within the EU ... 82

4.5

The cases of the Netherlands and Sweden ... 84

4.6

Conclusion ... 86

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5.1

General conclusion ... 91

5.2

Expected challenges and recommendations ... 94

5.3

Discussion ... 95

References ... 97

Full list (alphabetic order) ... 97

Categorized list ... 111

Interview ... 111

Primary sources ... 111

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Acknowledgements

First of all, I would like to thank my supervisor Dr. Mehdi Parvizi Amineh, for his knowledge,

dedication, and love for his students. He genuinely cared about his students and made sure

that everyone did their research to their full potential. Secondly, I would like to thank my

second reader, Dr. Imrat Verhoeven, for taking the time to review my work. At last, this

thesis is dedicated to Arantxa, Mauro, Paul and Marjet, the most important people in my

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Maps

Map 1: Map of Europe

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Map 2: Map of the Netherlands

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Map 3: Map of Sweden

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List of Abbreviations

AB Aktiebolag

B.V. Besloten Vennootschap CBS Centraal Bureau voor Statistiek CDA Christelijk Democratisch Appel CEO Chief Executive Officer

CH4 Methane

CO2 Carbon dioxide

EBN Energie Beheer Nederland B.V. EC European Commission

ECA Electricity Certificates Act EU European Union

FNV Federatie Nederlandse Vakbeweging GAL Green/alternative/libertarian GDP Gross Domestic Product GHG Greenhouse gas

GL GroenLinks

GLv GroenLinks verkiezingsprogramma IEA International Energy Agency

LO Landsorganizationen i Sverige m3 Cubic meter MdG Miljöpartiet de Gröna MNC Multinational Corporation MS Moderata Samlingspartiet N2O Nitrous Oxide

NOS Nederlandse Omroep Stichting NGO Non-governmental organization PvdA Partij van de Arbeid

SDE Stimulering Duurzame Energieproductie SEK Swedish Krona

SER Sociaal Economische Raad SP Socialistische Partij

SSA Sveriges Socialdemokratiska Arbetareparti TAN Traditional/authoritarian/nationalist UN United Nations

U.S. United States

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List of tables and figures

List of tables

Table 4.1: Stata output of a random effects regression on the effect of economic interests of the government and market power of the largest domestic energy companies on the share of renewable energy production between EU Member States

Table 4.2: Stata output of a random effects regression on the effect of economic interests of the government and market power of the largest domestic energy companies on the share of renewable energy consumption between EU Member States

List of figures

Figure 1.1: World population since 1800 and UN projection until 2100 Figure 1.2: Global fossil fuel consumption since 1800

Figure 1.3: Overview of capitalist industrialization and its outcomes

Figure 2.1: Total EU energy production by source from 1990 to 2017 (in billion m3) Figure 2.2: Total EU energy consumption by source from 1990 to 2017 (in billion m3)

Figure 2.3: EU GDP per capita (in thousands of euro’s) and average population size (in millions) from 1995 to 2017

Figure 2.4: EU main gas suppliers

Figure 2.5: EU gas imports in absolute values

Figure 2.6: Proven energy reserves in the Netherlands (in million m3) from 2000 to 2016 Figure 2.7: Share in energy production in the Netherlands per source from 1990 to 2017 Figure 2.8: Share in energy production in Sweden per source from 1990 to 2017

Figure 2.9: Share in final energy consumption in the Netherlands per source from 1990 to 2017 Figure 2.10: Share in final energy consumption in Sweden per source from 1990 to 2017

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Figure 2.12: Energy mix of Dutch and Swedish households in 2016 Figure 2.13: Energy mix of Dutch and Swedish transport in 2017

Figure 2.14: Dutch and Swedish average population size (in millions) and GDP per capita (in thousands of euro’s) from 1995 to 2017

Figure 2.15: Dutch and Swedish aggregate net imports of energy (in m3) from 1990 to 2017 Figure 2.16: Dutch and Swedish aggregate energy import dependence (in %) from 1990 to 2017 Figure 2.17: Dutch and Swedish net oil imports (in m3) from 1990 to 2017

Figure 2.18: Dutch and Swedish oil import dependence (in %) from 1990 to 2017 Figure 2.19: Dutch and Swedish gas net imports (in m3) from 1990 to 2017 Figure 2.20: Dutch and Swedish gas import dependence (in %) from 1990 to 2017 Figure 2.21: Dutch and Swedish net imports of coal (in m3) from 1990 to 2017 Figure 2.22: Dutch and Swedish coal import dependence (in %) from 1990 to 2017 Figure 2.23: Dutch and Swedish renewable energy imports (in m3) from 1990 to 2017

Figure 2.24: Dutch and Swedish renewable energy import dependence (in %) from 1990 to 2017 Figure 3.1: An overview of the ownership of the Dutch gas sector

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Chapter 1: Introduction

1.1

Introduction

The aim of this research is to find out whether economic interests play a key role in explaining the difference in progress between the Netherlands and Sweden, regarding the renewable energy transition. Several reasons for a slow transition are mentioned in the existing literature, such as the presence of fossil fuels, technological limitations, economic interests, and societal unwillingness. However, it is unclear whether this is the case for the Netherlands. After having read the existing literature around the topic, it seemed that ‘economic interests` is the most relevant factor of all, regarding the slow progress of the Netherlands. The importance of economic interests is not only expressed in the form of resistance by large domestic energy companies that are afraid to lose market share and consequently suffer from lower profits, but also in the form of governmental worries about declining economic activity, competitiveness of domestic businesses and declining taxes, and in the form of labor unions that are afraid that the transition will increase unemployment. Therefore, the first research questions of this paper is: ‘Do economic interests play a key role in explaining the difference in progress between the Dutch and Swedish renewable energy transition?’ It is also interesting to find out whether these economic interests (if existent) are common to other EU Member States in general. Therefore, the second research question is: ‘Do economic interests play a key role in explaining the difference in progress regarding the renewable energy transition between EU Member States in general?’ The timeframe under observation is from 2007 (when the 2020 goals were first set) until 2017 (because certain important data reaches until then). The actors consist of the government, the largest domestic energy companies, the largest labor union, the green parties and the citizenry of both countries, the Netherlands and Sweden, as they are the main stakeholders in the energy transition.

It is crucial for the EU and its Member States to understand the difference in progress of the energy transition towards renewables between Member States for several reasons. First of all, best practices of the rapidly transitioning countries could be shared with the slower transitioning countries. Secondly, impediments to a fast energy transition in the slower states could be identified and could possibly be overcome. Furthermore, slowly transitioning Member States will be environmentally less sustainable due to the amount of CO2 emissions that fossil fuel-based

economies emit. Due to the global importance of CO2 reductions in order to combat climate change,

it is essential that the slowly transitioning Member States speed up the transition as improved energy efficiency alone will not be enough to become environmentally sustainable.

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1.2

Literature review

In the existing literature, scholars have identified several reasons that hamper the energy transition towards renewables. The most frequently mentioned factors are economic interests, technological limitations, civil unwillingness and the presence of fossil fuels.

The first factor, ‘economic interests’, are incentives to take action that are expected to lead to a profitable result. An example of this is the projected loss in market share and profits of the largest domestic energy companies. The transition towards renewable energy will decrease their competitiveness and market power within the domestic economy. On top of that, most renewable energy sources are not profitable at the moment. This would mean that even when these companies make a strategic switch to renewable energy which is in line with their long-term vision and improves their image, they would suffer relative to the current situation (Fagerberg, 2017; Cai et al., 2018; Darvishi and Varedi, 2018). The duration of the return on investments in the fossil fuel sector is significant due to high initial investments, this could also feed their need to continue extracting fossil fuels, although standard economic theory states that sunk costs should not be taken into account when making future decisions (Kenton, 2019). According to the aforementioned scholars, worries concerning decreased profits and loss of market share of the incumbents could be a reason for the slow pace of the energy transition in states where these companies have substantial amounts of power. The Netherlands hosts one of the largest petrochemical corporations in the world and the fossil fuel industry represents 6% of the Dutch GDP (Fortune 500, 2019; Ministry of Economic Affairs, Agriculture and Innovation, 2011, p.16).

Economic interests do not only include profit-maximizing strategies of corporates, but also governmental worries about declining economic activity and competitiveness of domestic businesses. The Dutch government actively subsidizes fossil fuel intensive industries such as the transport sector amounting to tax breaks of 3.5 billion euros per year (van der Burg and Runkel, 2017). On top of that, the government even directly subsidizes fossil fuels by fiscally supporting the fossil fuel-based generation of electricity with around 500 million euros per year (van der Burg and Runkel, 2017). This shows that the government has economic interests in the fossil fuel market and this may have consequences for their stance on the domestic energy transition.

Large incumbent energy companies and governments may seem the only actors that have vested interests in the fossil fuel sector. However, certain labor unions, where the interests of many employees of the fossil fuel sector manifest themselves, are also afraid of rising unemployment as a consequence of the energy transition. The Dutch “Energieakkoord" (2018, p.108) also states that the transition could lead to job losses and that the labor unions are responsible for so-called

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naar-werk” projects in order to find new jobs for the ones that become unemployed as a consequence of the energy transition. This suggests that labor unions do not have a positive interest in the energy transition at the moment.

The second factor that could form an impediment to the energy transition towards renewables is technological limitations. This refers to the production, processing and consumption technologies that are needed for renewable energy to become a viable alternative to current sources of energy. Scholars such as Scholten and Bosman (2016), Egging and Tomasgard (2018) and Lewiner (2018) claim that there is a lack of appropriate storage methods for wind energy, which makes the dependence on this source risky as it is reliant on weather conditions, and therefore variable. However, the Netherlands has been relatively advanced in the development of renewable energy technologies compared to most EU Member States. In 2001, the Netherlands already had more efficient wind turbines and solar cells than Sweden (Jacobsson and Bergek, 2004, p.829). Therefore, this reason cannot explain the substantial difference in progress between the Dutch and Swedish renewable energy transition.

Civil unwillingness is the third factor that is often said to hamper the energy transition. Jobert et al. (2007) and Lewiner (2018) state that citizens can affect the energy transition in a negative way as they have to suffer the consequences of, for example, having wind parks in their backyards (Kaldelis and Zafirakis, 2011). Furthermore, in general, renewable energy projects have a negative business case, which leads to the question: ‘Who is going to pay for the project?’ If the bill goes to the government or to business, citizens will still have to pay in the end, either through increased taxes or higher energy prices for consumers in order for the government or business to finance initial investments (Appiott et al., 2014; Darvishi and Varedi, 2018; Peters, 2019). On top of that, certain people do not understand the need for the energy transition as they do not comprehend the consequences that our current system has on the environment (van Leeuwen et al., 2018). However, concerning the Netherlands, Löb and Kanne (2018) conclude that the Dutch citizenry is aware of the climate change problem and Kruitwagen et al. (2014) state that Dutch citizens are aware of the urgency. The Netherlands does suffer from the "not in my backyard" problem regarding the visual pollution of windmills because it is a densely populated country (Peters, 2019). The high population density together with the vast amounts of land needed for renewable energy projects makes such projects more challenging in the Netherlands compared to less densely populated countries (Peters, 2019). However, windmills can also be built offshore, although this does require higher initial investment costs (Peters, 2019). Citizen unwillingness may have played a role, but it is probably not the main reason for the slow pace of renewable energy growth in production and consumption of the Netherlands.

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The last reason that is frequently mentioned is the presence of fossil fuels. The resource curse entails that states become too dependent on their natural resources (fossil fuels in this case), which leads to less diversification of their energy supply, industry, and economy (Le Billon, 2004; Amineh and Crijns-Graus, 2017). This also results in a weaker focus on the energy transition. Since the discovery of natural gas in Groningen in the 1960s, the Netherlands is also said to have suffered from the resource curse (Favennec, 2011, p.68). Although diversification of the energy supply may have suffered from the substantial amounts of gas production in the North of the Netherlands, the Dutch economy has been able to diversify and counts multiple strongly developed industries such as chemicals, logistics, and agriculture (Ministerie van Economische Zaken en Klimaat, 2018). On top of that, Norway has also been able to proceed rapidly regarding the energy transition whilst it is one of the leading global oil and gas exporters (European Commission Directorate-General for Trade, 2019). It was able to reinvest its profits from the oil and gas sector to the development of renewable energy (Peters, 2019). Therefore, this reason is probably not the explanation for the significant differences in the pace of the transition between the Netherlands and Sweden.

1.3

Conceptual framework

In this research, concepts of geopolitical economic theory will be used to explain the historical capitalist industrial development that provided the contextual framework for the economic and environmental unsustainability of the current system. The first two concepts, that together form the ‘logic of capitalism’, are the ‘territorial logic of power’ and the ‘capitalist logic of power’ developed by David Harvey in 1985 (Amineh and Yang, 2018, p.25). These two dimensions of expansion have set the context of the current global capitalist system. The ‘territorial logic of power' is the geopolitical dimension, whilst the ‘capitalist logic of power' is the geo-economic dimension, therefore the two combined have been labeled ‘geopolitical economy' (Amineh and Yang, 2018, p.25). The ‘territorial logic of power’ refers to the political and military power within a state or a state-system, whilst the ‘capitalist logic of power’ concerns wealth creation and capital accumulation without boundaries (Amineh and Yang, 2018, p.25). Both concepts are interrelated as one sustains the other. The geopolitical dimension, the cross-border (political and/or military) power projection of a powerful state in foreign territory to gain access to resources and markets sustains the geo-economic dimension, namely the domestic wealth-power structure. The wealth-power structure being the relation between wealth and power accumulation that we currently observe within the system. Reversely, the geo-economic dimension sustains the geopolitical dimension as cross-border power projection needs to be supported by the flow of capital, investments, and trade, as it needs to be financed and controlled.

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Another concept that is important to understand why the current global capitalist system is unsustainable is ‘sequential industrialization’. Since the industrial revolution, fossil fuels have become a vital aspect of our economies. At first, Western countries industrialized, starting with Great-Britain around 250 years ago, after which Belgium, France, Germany, the U.S., and as a first non-Western country Japan in the century thereafter. This gradual process of industrialization in different dimensions of time and space is called sequential industrialization (Amineh and Yang, 2018, p.13). The transition towards mass production based on fossil fuel sources, and an increasing population (see Figure 1.1) and per capita income with a subsequent increase in the consumption of food and energy, has made a significant impact on the world both economically as well as environmentally (Meadows et al., 1972, p.1). Already since the Club of Rome published their article on ‘the limits to growth’ in 1972, these effects have become clear. They argue that the population cannot grow without food, the production of food increases with the growth of capital, capital accumulation requires resources, used resources become pollution and pollution impedes the long-term growth of population and food (Meadows et al., 1972, p.2). As shown in Figure 1.2, the first fossil fuel source that provided the condition for the immense growth of the industrialized economies was coal. Around 1910, oil started to develop as an important source of energy, followed by natural gas a few decades after.

Figure 1.1: World population since 1800 and UN projection until 2100

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Figure 1.2: Global fossil fuel consumption since 1800

Source: Ritchie, H., & Roser, M. (2017, October 02). Fossil Fuels. Retrieved from https://ourworldindata.org/fossil-fuels

According to the Prebisch-Singer hypothesis, that serves as a cornerstone of dependency theory, industrialized countries would import raw materials from less economically developed countries (LEDCs) and export finished products that required eminent technology (Singer and Sarkar, 1991). Technology adds much value to a product which has resulted in a deterioration of the terms of trade between industrialized countries and LEDCs (Singer and Sarkar, 1991). This has led to surpluses in industrialized countries which can either be invested domestically or abroad. The ongoing process of buying cheap raw materials abroad, adding technological value and exporting the final goods is inherent to the capitalist industrial development that our global economy is based on, with welfare (and subsequently power) maximization and surplus reinvestment as its raison d’être. This is reflected in GDP growth and an increase in fossil fuel consumption during the last 200 years.

However, fossil fuels are non-renewable whilst the production of goods is an ongoing process. The non-renewability of our main sources of energy is incompatible with the growing world population and the inherently capitalist feature being the need for continuous economic growth. This creates severe competition and a struggle for fossil fuel reserves (Amnieh and Yang, 2018, p.28). The hegemons will project their power onto overseas territories to assure their share of the world’s reserves (Amineh and Yang, 2018, p.28). Fossil fuel scarcity is becoming an increasingly serious threat, especially to the energy supply security of countries that lack domestic reserves.

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To understand the economic aspect of the system’s unsustainability, the concept of ‘resource scarcity’ needs to be addressed. There is an increase in per capita GDP in the two most populated countries in the world (industrializing China and India) and in the largest consumer blocks (the U.S. and the EU) which have the highest marginal propensity to consume (Amineh and Yang, 2018, p.15). Moreover, there is an increasing population in consumer countries (Amineh and Yang, 2018, p.15). This, together with the improvement in technology which has rendered the access to fossil fuels more important, creates demand-induced scarcity. On the other hand, the dwindling of fossil fuel reserves creates supply-induced scarcity (Amineh and Yang, 2018, p.15). These two forms of scarcity are important for this research as they create energy supply security issues.

A concept that derives from the combination of resource scarcity and an energy-intensive economy is ‘import dependency'. Countries that produce small amounts of fossil fuels, but require substantial amounts due to their fossil fuel based economy, have to import the difference between their production and consumption. This is called import-dependency and forms a threat to the energy security of predominantly fossil fuel poor regions with energy-intensive economies, such as the EU (Amineh and Crijns-Graus, 2017, p.364). There are several ways to decrease this dependency, namely increasing energy efficiency (which in a ceteris paribus condition decreases consumption), increasing supply security (for example through diversification of suppliers) and transforming the energy system to one of renewable energy (Amineh and Yang, 2018, p.9). The first two solutions are short-term, whilst the last one is unfeasible in the short run as it entails a full-blown transformation of a country’s economy and infrastructure, which requires huge investments and advanced technology.

The energy transition is a slow process whilst improving the energy supply security is not economically nor environmentally sustainable on the long-term. It is not economically sustainable because fossil fuel reserves are shrinking over time and it’s not environmentally sustainable because fossil fuels emit substantial amounts of greenhouse gas emissions, such as carbon dioxide and methane (Höök and Tang, 2013, p.797). The concept of ‘climate change’ is crucial to understand the environmental unsustainability of the current capitalist system. The increase in fossil fuel consumption throughout the last two centuries has had severe effects on our climate in the form of rising global temperatures and subsequently melting polar ice due to the re-radiation of heat by greenhouse gasses, of which most are produced anthropogenically (Höök and Tang, 2013, p.797), back towards the earth. This has several consequences for life on earth including life for human beings. Examples of consequences are extreme drought in certain parts of the planet and rising sea levels, which will most likely lead to mass migration and a struggle for territory and resources (Benarie, 1987).

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The discrepancy between short-term economic welfare and long-term economic and environmental sustainability has created a dealignment of interests between several stakeholders in the energy transition and this is also reflected in the political domain, especially within the EU. Voters have left the previously dominant center parties and have predominantly moved on the GAL-TAN dimension, either towards the Green/alternative/libertarian (GAL) generally promoting the long-term sustainability of the system, or the Traditional/authoritarian/nationalist side of the political spectrum, generally supporting policies that increase short-term economic welfare (Marks et al., 2006, p.157). Because of this, several actors within society try to exert pressure on the governing bodies to try to influence decision-making from above. Examples of these actors are businesses, NGOs, green movements and citizen groups. This form of influencing is called lateral pressure and is mostly directed at the government. When business tries to affect governmental policy, it is called lobbying and can be done through formal and informal ties with government bodies or representatives. The governing authorities try to resolve the problems of resource scarcity and environmental change by implementing policy, both short-term and long-term. To solve the problem of resource scarcity in the short and medium run, energy supply security policy is developed to minimize disruptions in energy supply. An example of such policy is supplier diversification or the increase in energy efficiency. The environmental concerns are harder to address because they need a transformation of the system towards one of renewable energy. Increased energy efficiency and the switch from coal and oil to gas are non-sustainable solutions to decrease the amount of greenhouse gas emissions as energy efficiency would have to increase by unrealistic amounts for it to be a sustainable option on its own and gas is also a non-renewable and scarce resource. This paper will focus on the energy transition as a long-term solution to both the scarcity problem as well as environmental concerns. To find an overview of the logic behind the conceptual relations explained above, see Figure 1.3.

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Figure 1.3: Overview of capitalist industrialization and its outcomes

Source: Amineh and Yang (2018); Amineh and Crijns-Graus (2017)

1.4

Brief argumentation and hypotheses

The pace of the energy transition has been much slower in the Netherlands than in Sweden. According to the literature, the presence of fossil fuels is a constraining factor to the renewable energy transition. Nevertheless, Norway was able to transition rapidly whilst it has the largest oil and gas reserves within Europe. A second factor that was mentioned in the literature on cases of slow energy transitions was civil unwillingness. Dutch citizens seem to understand the urgency of a renewable energy transition. However, they are not prepared to pay the costs of a transition and they do not want visual pollution “in their backyard”. Then, technological limitations were stated as an impediment to the energy transition. The Netherlands is technologically advanced with respect to renewable energy relative to other Member States, even compared to Sweden in 2001. At last, the largest domestic energy companies earn more from fossil fuel projects as the expected returns are

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higher, whilst for most renewable energy projects, expected returns are negative. This makes a renewable energy transition less attractive for incumbent fossil fuel companies. As mentioned in Section 1.2, the Netherlands has a significant fossil fuel sector which will suffer from a renewable energy transition. Furthermore, this sector also represents a significant part of the Dutch economy which is important for the Dutch government and a substantial amount of employment which is important for the Dutch labor unions. Therefore, this probably explains much of the difference in progress between the Dutch and Swedish renewable energy transition and economic interests seem the most compelling driver.

This leads to the following hypothesis:

H1: Economic interests play a key role in explaining the difference in progress between the Dutch

and Swedish renewable energy transition

Due to the fact that most renewable energy projects have a negative expected return on investment and most EU Member States’ energy system is still fossil fuel-based, one can expect that governments and businesses all over the EU have economic interests in protecting the status-quo. Furthermore, labor unions will probably fear increased (temporary) unemployment resulting from a transition in Member States were the fossil fuel sector is significant. On top of that, in Member States were these economic interests do not seem significant, the progress regarding the renewable energy transition will probably be average.

This leads to the following hypothesis:

H2: The economic interests play a key role in explaining the difference in progress regarding the

renewable energy transition between EU Member States in general

1.5

Methods and data

To answer the first hypothesis (H1), the economic interests of the actors in the renewable energy

transition and the power relations between them will be analyzed by comparing the Dutch and Swedish cases. This is done to see whether the difference in progress between the Dutch and Swedish energy transition is due to different economic interests of their respective state, large energy companies, and the largest labor union and whether this effect is emphasized by a strong relation between actors with similar interests. The necessary data can be found in government publications, annual reports and databases mainly.

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To answer the second hypothesis (H2), a panel data regression of 26 EU Member States

between 2007 and 2017 will be conducted. This shows whether an EU broad effect can be observed of economic interests of the government and the largest domestic fossil fuel companies on the share of renewable energy production and consumption. Note that until Chapter 3, this paper will refer to ‘largest domestic energy companies', whilst in Chapter 4, it will refer to ‘largest fossil fuel companies'. This is because in the comparative analysis the largest domestic energy companies are relevant, independent of whether they are fossil fuel corporates or other types of energy companies, whilst for the regression analysis, it is crucial that only fossil fuel companies are included in the data. If an EU broad effect exists, ‘economic interests’ is a common factor that explains the difference in progress between EU Member States regarding the renewable energy transition. If an effect does not exist, ‘economic interests’ is an idiosyncratic factor that explains the difference in progress between the Dutch and Swedish energy transition. ‘Economic interests’ will have to be operationalized in order for the effect to be measured. Due to the fact that one part is qualitative and the other is quantitative, the concept of ‘economic interests’ has to be defined in different ways. Because the qualitative part does not need quantifiable variables per se, the concepts will be operationalized in the introduction of each analysis. The data for the regression analysis is found at Eurostat (2018a; 2018b; 2018c) and European Commission (2014).

1.6

Structure of the thesis

This thesis consists of five chapters. Chapter 2 (A comparison of the Dutch and Swedish energy situation) treats the energy situation of both countries in terms of its energy production, consumption, imports, exports, and policy. This answers the first sub-question: ‘What is the current energy situation in the Netherlands and Sweden?’ using data from Eurostat, the climate accords and policy statements of the respective governments and relevant ministries. Chapter 3 (Governments, large domestic energy companies, labor unions, green parties and citizens in the nexus of the Dutch and Swedish energy transition) treats the core interests of the main actors involved in the renewable energy transition and the relations between them. This answers the second and third sub-question: ‘What are the economic interests of the government, the largest energy companies, and the labor unions in the Dutch and Swedish renewable energy transition and what is their relation?’ And: What is the role of green movements and citizens in the Dutch and Swedish renewable energy transition? To answer this, the Dutch and Swedish climate accords and policy statements will be used, as well as profit and loss accounts and balance sheets of the largest domestic energy companies, and statements and publications by the respective labor unions. Chapter 4 (The effect of economic

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interests on the renewable energy transition within the EU) will include an analysis on the regression output, after which the results are related to the cases of the Netherlands and Sweden. Finally, Chapter 5 (Conclusion) discusses the main findings and finishes with a concluding statement and discussion.

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Chapter 2: A comparison of the Dutch and Swedish energy situation

2.1

Introduction

This chapter focuses on the energy situation of the Netherlands and Sweden. The energy situation is an overview of the historical energy balances of a country. It shows the way in which a country secures its energy supplies and which forms of energy it is dependent on. More specifically, it assesses the domestic energy reserves, production, consumption, imports and exports of the various forms of energy. Production and consumption patterns show whether a country suffers from domestic (supply- or demand- induced) scarcity or abundance in energy resources. By analyzing the imports and exports one can observe the import dependency of a country. Due to the historical component of this chapter, the time frame under observation will be from 1990 until 2017. Apart from analyzing this data, the energy policy of the Netherlands and Sweden will be treated within the contextual framework of the EU energy policy. The analysis of the key variables (reserves, production, consumption, imports, and exports) shows the current energy situation and whether the energy transition has progressed so far (what has actually been done). On the other hand, the policy analysis shows what plans have been made (what government institutions want to achieve) and where the focus of the energy strategies of the Netherlands and Sweden lie. The research question of this chapter is: What is the current energy situation in the Netherlands and Sweden?

The six sections ahead will provide an answer to this question. Section 2.2 contains the domestic energy reserves and production of the Netherlands and Sweden. Thereafter, the Dutch and Swedish energy consumption will be analyzed in Section 2.3. Sections 2.2 and 2.3 combined give an answer to whether there is domestic scarcity or abundance of energy within the Netherlands and Sweden. Section 2.4 shows the energy trade (imports and exports) and the subsequent (import) dependence that results from these statistics. Section 2.5 evaluates the Dutch and Swedish energy policy within the contextual framework of the EU energy policy, after which section 2.6 concludes the chapter. Most of the data for sections 2.1-4 will be retrieved from Eurostat and IEA. For section 2.5, most information will be collected from the European Commission and relevant government institutions such as the Dutch Ministry of Economic Affairs and Climate and the Swedish Ministry of the Environment.

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2.2

The EU energy production, consumption, and net imports

Figure 2.1: Total EU energy production by source from 1990 to 2017 (in billion m3)

Source: Eurostat (2018a)

Figure 2.1 shows that the aggregate energy production within the EU has decreased by 20% since 2000. Especially, the production of fossil fuels has declined substantially, of which coal (solid fuels) declined the most (it almost halved since 2000). The share of renewable energy has increased by 114% between 2000 and 2017. Moreover, the amount of nuclear energy production has remained relatively constant. 200 400 600 800 1.000 1.200 1.400 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 To ta l energy p ro d u ctio n b y so u rce (in b ill ion m 3)

EU energy production by source

(1990-2017)

Solid fossil fuels Oil and petroleum products Natural gas

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Figure 2.2: Total EU energy consumption by source from 1990 to 2017 (in billion m3)

Source: Eurostat (2018b)

Aggregate energy consumption, on the other hand, has remained relatively stable. This means that the gap between energy production and consumption has grown and suggests that imports have increased. The amount of coal consumption has decreased significantly between 2000-2017, whereas the amount of natural gas consumption first increased and then decreased to approximately the same level as in 2000. On top of that, oil consumption has decreased slightly. The renewable energy consumption grows similarly to renewable energy production which suggests that there is not much renewable energy trade between the EU and its external partners. This is logical as the infrastructure for renewable energy is still in an early stage of development.

Combining Figure 2.1 and 2.2, one can conclude that the EU had to import the growing gap between energy production and consumption, increasing the import dependence and putting pressure on the EU energy supply security.

500 1.000 1.500 2.000 2.500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 En ergy co n su m p tio n b y so u rce (in b ill ion m 3)

EU energy consumption by source

(1990-2017)

Solid fossil fuels Natural gas Nuclear

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Figure 2.3: EU GDP per capita (in thousands of euro’s) and average population size (in millions) from 1995 to 2017

Source: Eurostat (2018c); Eurostat (2018d)

Due to a sharply increasing per capita GDP and a rising population size within the EU, as shown in Figure 2.3, the EU will suffer from domestic demand-induced scarcity. The EU population is very wealthy on average GDP per capita shows an upward trend. Together with a rising population size, this leads to increased aggregate consumption of goods and services, and consequently increasing energy consumption. 465 470 475 480 485 490 495 500 505 510 515 0 5 10 15 20 25 30 35 Av era ge p o p u lat ion s ize (in m ill ion s) An n u al G DP p er cap ita (in th o u san d s o f eu ro 's )

EU GDP per capita and population (1995-2017)

GDP per capita Population

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Figure 2.4: EU main gas suppliers

Source: Eurostat (2018e). Statistics Explained.

Figure 2.5: EU gas imports in absolute values

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In Figure 2.4, one can observe the EU's main gas suppliers. Russia and Norway represent three-quarters of the total share of gas supplies to the EU. In combination with Figure 2.5, it is can be concluded that the price of gas has dropped but that the amount of gas from Russia has increased (because value is mass times price). This has made the EU even more dependent on Russian gas than it already was.

2.3

The Dutch and Swedish fossil fuel reserves and domestic energy production

In order to give an appropriate picture of the Dutch and Swedish energy situation, the statistics on fossil fuel reserves and domestic energy production of the last decades will be displayed. Because in this way, not only the current situation is shown, but also its dynamics and trends. Due to the fact that Sweden does not have a significant amount of proven fossil fuel reserves, these will not be shown.

Figure 2.6: Proven energy reserves in the Netherlands (in million m3) from 2000 to 2016

Source: CBS (2017a)

Figure 2.6 shows the pattern of Dutch energy reserves from 2000 until 2016. Between 2000 and 2009, the energy reserves declined mildly, followed by a sharp decrease in the years thereafter.

0 500 1000 1500 2000 En ergy r es erv es (in m ill ion m 3)

Proven energy reserves in the Netherlands

(2000-2016)

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This huge drop in energy reserves is mainly due to a 54% decrease in proven gas reserves since 2000. This is due to extraction, but also due to a downward revaluation of the existing gas reserves and the absence of substantial new discoveries (CBS, 2017b). An upward revaluation can happen when technological advances lead to a reassessment of previously improbable production possibilities, whereas downward revaluation can happen when constraining factors for extraction arise. In 2016, 846 billion m3 gas reserves remained together with some small oil deposits that account for only 4%

of the Dutch energy reserves and have remained at the same level since 2000 (CBS, 2017b).

Ever since the Dutch discovered their gas reserves in the north of the country in the 1950s and 1960s, they have been exploited. Natural gas is still an important contributor to the Dutch economy (representing around 6% of the Dutch GDP in 2011) (Ministry of Economic Affairs, Agriculture and Innovation, 2011, p.16). However, these resources are non-renewable and fewer and smaller discoveries have been done since. The CBS (2017b) estimates that more than 80% of the initial reserves have been extracted. On the other hand, in 2016, known reserves were expected to meet Dutch domestic energy needs for another 16 years (based on 2016 net production) (CBS, 2017b). After houses were damaged as a result of earthquakes in Groningen which were linked to the gas extraction, the Dutch government restricted the amount of gas extraction. Furthermore, the amount of coal reserves in the Netherlands are negligible and it has not been extracted since the 1970s (CBS, 2019). Due to the fact that proven energy reserves in the Netherlands are shrinking rapidly, it could be said that it suffers from fossil fuel supply-induced scarcity. Sweden has suffered from fossil fuel supply-induced scarcity for a long time.

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Figure 2.7: Share in energy production in the Netherlands per source from 1990 to 2016

Source: Eurostat (2017a)

Figure 2.7 shows the share in energy production in the Netherlands per source. What draws the most attention is the share of gas production. Since 1990, gas has been the predominant source of energy production. However, the production has declined from around 65 million m3 to around 45 million m3 and its share has dropped from around 90% to 80% of the aggregate energy production in the Netherlands. The oil production has more than halved between 1990 and 2016. However, this has always been a very small share of the Dutch energy production. Coal has not been produced in this time frame and the renewable share has increased from hardly any to around 10% of the aggregate production. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sh ar e in en ergy p ro d u ctio n

Share in energy production the Netherlands

(1990-2016)

Other Coal Renewables Oil Gas

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Figure 2.8: Share in energy production in Sweden per source from 1990 to 2016

Source: Eurostat (2017a)

The amount of proven fossil fuel reserves in Sweden are negligible. The production of coal made up around 1% of the share in Swedish energy production, whereas the other fossil fuels have not been produced at all. Figure 2.8 illustrates that already in 1990, 40% of the energy production came from renewable sources. This has even increased to around 50% in 2016. ‘Other` is predominantly made up out of nuclear fuel (Ministry of Sustainable Development Sweden, 2005, p.20).

A comparison of the aggregate energy production in the Netherlands and Sweden shows that in 1990, the Netherlands produced twice the amount of energy than Sweden and this declined to around 1.3 times the amount of Swedish energy production. This is mainly due to the sharp decrease in Dutch gas production between 2013 and 2016. The amount of aggregate energy production in the Netherlands is decreasing whilst in Sweden, it is increasing. Despite the drop in Dutch energy production, there has been an increase in the share of renewable energy production. However, when compared to the still very significant share of gas production, it is still small.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sh ar e in en ergy p ro d u ctio n

Share in energy production Sweden (1990-2016)

Other Renewables Gas Oil Coal

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2.4

The Dutch and Swedish domestic energy consumption

Figure 2.9: Share in final energy consumption in the Netherlands per source from 1990 to 2016

Source: Eurostat (2017a)

The Dutch aggregate energy consumption consists predominantly out of fossil fuels, as shown in Figure 2.9. Although the share in renewable energy consumption is increasing, it is still only around 5% of the aggregate energy consumption. The other 95% of the energy consumption is derived from fossil fuels. In 2016, the share of gas was 39%, the share of oil was 40%, and the share of coal was 21%. Therefore, in comparison with 1990, the share of gas decreased by around 6%, whilst the share of oil and coal increased around 2-3%. The aggregate energy consumption in the Netherlands increased substantially between 1990-2004 (25%) and then saw a slight decrease between 2004 and 2016 (7%). 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sh ar e in fin al en ergy con su m p tio n

Share in final energy consumption the Netherlands

(1990-2016)

Renewables Gas Oil Coal

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Figure 2.10: Share in final energy consumption in Sweden per source from 1990 to 2016

Source: Eurostat (2017a)

Figure 2.10 shows that Sweden's final energy consumption is dominated by renewables, oil, and electricity (being the main component of ‘other’). The share in renewable energy consumption has increased substantially between 1990 and 2016, namely by around 10%. The share in ‘other’ has decreased since 1990, just like the share in oil consumption. In 2016, only around 30% of Sweden’s energy mix is based on fossil fuels.

In comparison to the Netherlands, Sweden consumes much fewer fossil fuels relative to alternative forms of energy. This means that Sweden is less dependent on fossil fuel supplies (production and imports) than the Netherlands. On top of that, the renewable energy consumption of Sweden is 37%, in contrast to the 5% of renewable energy consumption in the Netherlands, in 2016.

To give an appropriate picture of the energy consumption in the Netherlands and Sweden it is interesting to zoom in on the fossil fuel intense industries and their energy mix. For the Netherlands, the most energy-consuming sector is the industry sector with around 60 billion m3 of final energy consumption in 2016 (CBS, 2018). After that, there is the transport sector with around 12.4 billion m3 of final energy consumption in 2017 and households with slightly less, namely 11.7 billion m3 of final energy consumption in 2016 (CBS, 2018). In Sweden, the most energy-intensive

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sh ar e in fin al en ergy con su m p tio n

Share in final energy consumption Sweden

(1990-2016)

Other Renewables Gas Oil Coal

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sectors are households with 14.9 billion m3 in 2016, thereafter industry with 14.6 billion m3, followed by the transport sector which consumed 9.0 billion m3 in 2017 (Swedish Energy Agency, 2019). In Figures 2.8, 2.9 and 2.10, the three aforementioned sectors of the Netherlands and Sweden are compared.

Figure 2.11: Energy mix of Dutch and Swedish industry in 2017

Source: Eurostat (2017a)

Figure 2.12: Energy mix of Dutch and Swedish households in 2016

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Figure 2.13: Energy mix of Dutch and Swedish transport in 2017

Source: Eurostat (2017a)

One of the most interesting differences between the Dutch and Swedish most energy-intensive sectors is the difference in energy consumption by industry. Dutch industry consumes around four times the amount of Swedish industry. Even per capita, Dutch industry consumes around 3,500 m3 of energy whilst for Swedish industry, this is around 1,500 m3 per capita. Furthermore, Figure 2.9 clearly shows that Dutch industry on top of being the most energy intensive sector, consumes predominantly fossil fuels, amounting to around 85% of total energy consumption in the sector. Whereas in Swedish industry, only 20% of total consumption corresponds to fossil fuels. Dutch energy consumption in the industry sector consists for around 50% out of oil, for approximately 30% out of gas, and for around 5% out of coal. The Swedish industry consumes for almost 40% renewable energy, 35% electricity and 10% coal. One can conclude that Dutch industry is significantly more fossil fuel dependent than Swedish industry, first of all due to its relative size and second of all due to its energy mix.

Observing Figure 2.12, Swedish households consume more energy than Dutch households, per capita as well as the aggregate. The majority of Dutch households are intensive gas consumers. Gas amounts to around 73% of their consumption, followed by around 20% of electricity consumption. Again, in Sweden, their energy mix consists predominantly out of electricity and heat. Under 10% of their energy mix consists of fossil fuel consumption. Therefore, even with a higher per capita energy consumption, Swedish households have a much lower per capita fossil fuel consumption.

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Figure 2.13 shows that the Dutch domestic transport sector consumes around 40% more than the Swedish domestic transport sector. Per capita the Swedish domestic transport sector consumes around 25% more than the Dutch sector. Once again, if one looks at the energy source that is used in this sector, the Dutch domestic transport sector consumes hardly any other form of energy than oil. The Swedish transport sector uses predominantly coal, renewables and electricity. Therefore, this sector is also much more fossil fuel dependent in the Netherlands than in Sweden.

Combining all this data, the Dutch economy is much more fossil fuel intensive than the Swedish economy. Together with the conclusions drawn from the production section, it is clear that the Netherlands, and more specifically the Dutch economy, is very dependent on the supply of fossil fuels. In the next section, the imports will be put forward and compared to the exports to see the energy trade situation of the Netherlands compared to Sweden.

Figure 2.14: Dutch and Swedish average population size (in millions) and GDP per capita (in thousands of euro’s) from 1995 to 2017

Source: Eurostat (2018c); Eurostat (2018d)

As shown in Figure 2.14, the population of both the Netherlands and Sweden has increased since 1990. Combined with the increase in annual per capita income, this creates domestic demand-induced scarcity in both countries. The average population size grows faster for the EU as a whole

0 2 4 6 8 10 12 14 16 18 0 5 10 15 20 25 30 35 40 45 50 Av erage p op u lation s ize (i n m illi on s) An n u al G DP p er cap ita (in th o u san d s o f eu ro 's )

Dutch and Swedish population and GDP per capita

(1995-2017)

NL GDP/capita SW GDP/capita NL Population SW Population

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than for the Netherlands and Sweden. Due to a similar growth in per capita GDP for the Netherlands, Sweden and the EU as a whole, this leads to even more demand-induced scarcity for the EU than for the Netherlands and Sweden.

2.5

The Dutch and Swedish energy trade: imports and exports

Figure 2.15: Dutch and Swedish aggregate net imports of energy (in m3) from 1990 to 2017

Source: Eurostat (2017a)

Figure 2.15 shows the aggregate net imports of energy for the Netherlands and Sweden. Where Sweden’s energy imports have decreased, Dutch energy imports have risen significantly since 1990. There are two turning points at which the gap between Dutch energy imports and exports started to grow substantially, namely in 1996 and in 2014. In the next parts of this section, an explanation for these turning points will be found through a more detailed analysis of the Dutch and Swedish energy net imports. In 1996, this was due to an increase in energy imports combined with a small decrease in energy exports, whereas in 2014, this was due to a very significant increase in imports which overruled the effect of an increase in exports (Eurostat, 2017a).

0,0 10.000.000,0 20.000.000,0 30.000.000,0 40.000.000,0 50.000.000,0 60.000.000,0 Aggre gat e n et im p o rts o f en ergy (in m 3)

Aggregate net imports of energy (1990-2017)

Netherlands Sweden

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Figure 2.16: Dutch and Swedish aggregate energy import dependence (in %) from 1990 to 2017

Source: Eurostat (2017a)

Import dependence is equal to the net imports of a country divided by its final energy consumption. The Netherlands used to have a lower aggregate energy import dependence than Sweden. However, this has changed since 2000 and more drastically since 2013. Comparing Figure 2.15 with Figure 2.16, one can observe similar turning points for the Dutch import dependence as for the Dutch net imports. This means that consumption did not change significantly at these points and that net imports increased. 0% 10% 20% 30% 40% 50% 60% 70% Impo rt d ep n d en cy r at e (in % )

Aggregate energy import dependence (1990-2017)

Netherlands Sweden

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Figure 2.17: Dutch and Swedish net oil imports (in m3) from 1990 to 2017

Source: Eurostat (2017a)

Net oil imports have been much lower in Sweden than in the Netherlands, as shown in Figure 2.17. This is because the Netherlands is an important fossil fuel trading Member State, specialized in oil refining and an important transit country. The Netherlands exports and imports significant amounts of oil and although both imports and exports of oil have grown since 1990, its imports have grown more rapidly than its exports since 1995.

0,0 10.000.000,0 20.000.000,0 30.000.000,0 40.000.000,0 50.000.000,0 60.000.000,0 70.000.000,0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Oil n et im p o rts (in m 3)

Net oil imports (1990-2017)

Netherlands Sweden

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Figure 2.18: Dutch and Swedish oil import dependence (in %) from 1990 to 2017

Source: Eurostat (2017a)

Although Dutch oil net imports have grown by 25% between 1990 and 2016, oil import dependence has only grown slightly, as shown in Figure 2.18. This is due to an almost parallel increase in oil consumption throughout this period. Nevertheless, Dutch oil import dependence has been very high for at least three decades.

Figure 2.19: Dutch and Swedish gas net imports (in m3) from 1990 to 2017

Source: Eurostat (2017a)

0% 20% 40% 60% 80% 100% 120% 140% 160% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Impo rt d ep en d en cy r at e (in %)

Oil import dependence (1990-2017)

Netherlands Sweden

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Figure 2.19 shows that Sweden’s gas net imports have been constant for the last three decades. However, the Netherlands used to be a significant gas exporter, but is decreasing its gas production and is importing the difference since 2013. This trend is probably going to continue due to earthquakes in Groningen. This is also the explanation for the huge increase in aggregate energy net imports and aggregate energy import dependence.

Figure 2.20: Dutch and Swedish gas import dependence (in %) from 1990 to 2017

Source: Eurostat (2017a)

As can be observed from Figure 2.20, the Dutch gas import dependence is negative but increasing. It still exports more gas than it imports. However, this is changing rapidly. Sweden has a high gas import dependence, but it consumes negligible amounts.

-100% -50% 0% 50% 100% 150% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Impo rt d ep en d en ce ra te (in %)

Gas import dependence

Netherlands Sweden

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Figure 2.21: Dutch and Swedish net imports of coal (in m3) from 1990 to 2017

Source: Eurostat (2017a)

Dutch net imports of coal are higher than Swedish net imports of coal, as presented in Figure 2.21. This is mainly because the Netherlands consumes more coal, as both produce negligible amounts and this difference has to be imported. Dutch coal net imports started to increase in 2012 due to a decrease in exports.

Figure 2.22: Dutch and Swedish coal import dependence (in %) from 1990 to 2017

Source: Eurostat (2017a)

0,0 5.000.000,0 10.000.000,0 15.000.000,0 20.000.000,0 25.000.000,0 30.000.000,0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 N et im p o rts o f co al (in m 3)

Net imports of coal

Netherlands Sweden

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Figure 2.22 shows that coal import dependence is slightly increasing in Sweden and slightly decreasing in the Netherlands. The increase in Sweden is due to a decrease in coal consumption, whereas the decrease in the Netherlands is due to an increase in coal consumption.

Figure 2.23: Dutch and Swedish renewable energy imports (in m3) from 1990 to 2017

Source: Eurostat (2017a)

Sweden is net importing renewable energy on top of a rapid increase in renewable energy production, as reflected in Figure 2.23. This means that Sweden is increasing its renewable energy consumption significantly. The Netherlands net exports renewable energy. However, this is a negligible share of its total energy exports.

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Figure 2.24: Dutch and Swedish renewable energy import dependence (in %) from 1990 to 2017

Source: Eurostat (2017a)

Figure 2.24 illustrates that Sweden's renewable energy import dependence is slightly rising. This is due to an increase in imports and consumption of renewable energy. Dutch renewable energy import dependence is unimportant due to its low share in renewable energy consumption. This is the reason for the high volatility of the Dutch renewable energy import dependence

On the whole, Dutch import dependence of fossil fuels is rising due to an increase in gas import dependence and a slight increase in oil import dependence. Sweden’s aggregate import dependence is decreasing, this is due to alternative forms of energy other than fossil fuels or renewable energy as for these sources, import dependence was either stable or increasing. Sweden does not have the same import dependency issues as the Netherlands. This is also largely due to the substantial amount of renewable energy production and consumption. Renewable energy can be produced domestically as no reserves are needed, this results in less need for energy imports. Sweden suffers from demand- and supply-induced scarcity. However, it has used the energy transition as a solution to this problem. As shown in sections 2.3 and 2.4, the Netherlands also suffers from demand- and supply-induced scarcity combined with import dependency as shown in this section. An appropriate solution to the import dependence and scarcity problem of the Netherlands is transitioning to a renewable energy system combined with an increase in energy efficiency. However, why hasn’t the Netherlands been able to increase the share of renewable energy throughout the last decades? The scarcity problem has only become serious since 2013 when the Dutch government started to decrease the domestic gas production. Before that, it could be said

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