Energy: Inspiration for the future

8/3/2019 Energy:Inspirationforthefuture

1/96

Energy:Inspirationforthefuture

EssaysinhonourofJosBrugginksretirementfromECN


2/96

Energy:Inspirationforthefuture

Editedby:PietBoonekampandHeleendeConinck,ECN

2011,Amsterdam

Design:Ricoh,ECN

Copyeditor:MarliesKamp,ECNLayout:ManuelaLoos,ECN

PublishedanddistributedbyRicoh,ECN

2 Energy:inspirationforthefuture


3/96

Tableofcontents

Preface

4

PietBoonekamp&HeleendeConinck

ChangingviewsinDutchpolicymakingandsupportbyECN 6

PietBoonekamp

ChangesinNorthwestEuropeanenergysystems:differentviews,

nocoordinationyet 20

PieterBoot

Energytechnologyandinnovationpolicy:thevalueaddedofmodels 37

Dolf

Gielen

Longtermenergyscenarios:Why!? 44

BobvanderZwaanenHilkeRsler

Thesilentrevolution:solarenergyonitswaytolargescaleuse 50

WimSInke

Thetroublewithbiofuels 57

MarcLondo

MarketsforCleanCookstoves:AThinkPieceforDevelopmentCooperation

Positioning 65

RahulBarua&RaoufSaidi

Climatemitigationandenergyforall:istherearoleforinternational

collaboration? 79

HeleendeConinck

EnergyandDevelopmentPolicy Howtoobtainuniversalaccessin2060? 85

Abouttheauthors 91

JanCloin&TinekeRoholl

Tableofcontents 3


4/96

Preface

ThisbookispublishedattheoccasionoftheretirementofJosBruggink,whois

turning65

on

July

9th,

2011.

From

1979

on

he

worked

in

the

unit

Policy

Studies

of

the

EnergyresearchCentreoftheNetherlands(ECN),whichstartedin1976asthe

EnergyStudyCentre.Asthemanageroftheunit,from1989to2004,heplayedanessentialroleinbuildinganindependentenergyknowledgecentrethatisbothwell

rootedinthetechnicalresearchatECNandalsoplaysacentralroleinsupporting

Dutchenergypolicy,whilealsoholdingarecognizedpositiononenergyandclimatepolicyontheEuropeanandinternationallevel.

Joslongtimewishistowriteabookonenergyfuturesaddressingtheglobalscale

andcoveringthelongerterm.Hisliberamicorumthereforeisnotjustabookof

loveand

appreciation

for

the

contribution

Jos

has

made

to

the

energy

field

in

the

Netherlandsandabroad.Wehopethisbookwillserveasanencouragementanda

sourceofinspirationforJostowritehisbook.Theauthorsofthisbook,peopleJos

hasworkedwithovertheyears,insideaswellasoutsideofECNPolicyStudies,have

madetheircontributionsbecausetheyallfeelapublicationbyJosBrugginkon

energyfutureswoulddefinitelybeworthreading.

Thecentralthemeinthisvolumeis:Isitusefulatalltostudytheenergyfuture?

OverJoscareer,theenergypolicyfieldhaschangedradicallyandnot.Sincethe

late1970swehaveseeneverythingwecouldimagineandmore:fromdirtcheapoil

tocrisis

prices,

Chernobyl,

the

appearance

of

an

environmental

agenda

to

combat

acidificationandclimatechange,andliberalization oftheenergymarketsinEurope

leadingtoaradicallychangedroleofthestateintheenergysystem.Atthesame

time,however,theenergysystemhasbeenremarkablystable.Westilldrivecars

thatrunonoil,wegeneratemostofourpowerfromamixoffossilfuelsandweheat

ourhouseswithgas.Forthecurrentquestions,quantitativetechnoeconomic

analysisdoesnotsuffice;political,technological,socialaswellaseconomicissuesall

affecttheoutcomeandputhighdemandsonourabilitytodointegratedassessment

andreflectcriticallyonourassumptions.

Thisbookbundlesviewsonthefutureofanumberofenergyrelatedissues.

Renewablesarethefastestgrowingenergysource,butarecomingfromalowbase.Whatdoesittakeforthemtomakeadifference?MarcLondoandWimSinkegive

theirviewsonbiomassandsolarenergy,respectively.PietBoonekampreflectson

studyingtheenergyfuturefortheNetherlandsandconcludesthat,despiteallourefforts,therehasbeenlimitedprogresstowardsasecure,affordableandclean

energysupply.However,inanyenergyfuture,energysavingisanobrainer.Pieter

Bootanalysestheambitionandprogressonasustainableenergysysteminfour

NorthwesternEuropeancountries,andhowcoordinationbetweenthemcouldhelp

theirtransition.DolfGielendiscussestheroleofinnovationinallofthis,andBobvan

derZwaanandHilkeRslertalkaboutwhetherwecanforetellanythingatallabout

thatprocess.

Are

the

billions

of

people

without

access

to

modern

energy

finally

goingtogetconnectedandwhatpolicydoesthattake?JanCloinandTinekeRoholl

reflectonthisquestion,whileRaoufSaidiandRahulBaruawonderaboutthe

promiseofimprovedcookstoves.Lastly,HeleendeConinckaddressesthequestion



5/96

Preface 5

whatalltheseinternationaldevelopmentsmeanforclimatechange,andwhich

institutionscanmatter.

The

authors

were

requested

to

base

their

contribution

on

their

experience

in

specific

workingfields.Therefore,thebookwillcoverselectedissuesrelatedtopossible

energyfutures.However,itdoespresentabroadpictureofelementsthatcanplayaroleinthedevelopmentofasustainableenergysystem.Itisourhopethatthebook

doesnotonlyinspireJostousehistalentforcriticalthoughtforhisownwork,but

thattheresultisalsousefulforanyoneinterestedinthewaytheenergy(policy)

systemcanorshouldevolve.

Thepublicationofthisbookowesmuchtothecontributors,who,outof

appreciationforJosBrugginkswork,havespentconsiderableprivatetimewriting

theircontributions. Inaddition,wewouldliketosincerelythankvariouscolleagues

fromECN

Policy

Studies

who

have

put

in

their

personal

effort

to

publish

this

book,

in

particulartheartisticskillsofManuelaLoos,whowasresponsibleforthelayoutand

coverdesign,andthecopyeditingbyMarliesKamp.Lastbutnotleast,ECNPolicyStudies,currentlyundertheleadofRemkoYbema, providedthemeanstoprintthe

book,andtheprintingwasbyRicoh,theinhouseprintshopatECN.

PietBoonekampandHeleendeConinck(editors)

Petten,July2011


6/96

ChangingviewsinDutchpolicymakingandsupport

byECN

PietBoonekamp

Introduction

OneofthegoalsofECNPolicyStudiesis

tosupportpolicymakersinsettingupa

robustandcosteffectiveenergypolicyfortheNetherlands.Since1980theunit

hasproducednumerousoutlookson

energyandemissiontrends,basedon

calculationswith

energy

models

and

the

viewsofexperts.Onemaywonder

whetherthishasbeensuccessful,or

evenwhetherformulatingarobust

policyisactuallypossible.Duringthis

periodseveralmajorneweventstook

placethatwerenotanticipated,nor

weretheireffectsfullyunderstoodbymostpeople.Examplesaretheoilcrisis,

theacidificationproblem,thenuclear

disasteratChernobyl,theEUforced

uptakeoftheliberalizationofenergy

markets,and,ofcourse,theemerging

GHGproblem.Timeandagainthe

effectsoftheneweventshadtobe

incorporatedinnewenergyoutlooks

andinreformulatedenergypolicy.

Obviously,attemptshavebeenmadeto

copewithemergingproblems,possible

trendbreaksandotherknownbuthard

toquantify

issues.

This

has

been

accomplishedinpartbyformulatingsetsofenergyscenarioswithdifferent

assumptionsondrivingforcesand

restrictions.However,lookingback,itisfeltthatamorefundamentalapproach

isnecessarytodealwithnewevents.

Thispapertriestoprovidebuilding

blocksforsuchanapproach,basedon

ananalysisoftheperiodfrom1970

onwards.

Firstanoverviewispresentedofthe

developmentsfor:

policygoalsusedinDutchenergypolicy(secure,affordableandclean

energysupply)

optionsandconcretechangesinthe

energysystem

to

meet

these

goals

majorexternaleventsinfluencingthe

policygoalsandoptions.

Optionisdefinedhereasatypeof

changeintheenergysupplysystem,in

suchawaythatpolicygoalsarerealized

toalargerextent.Forinstance,the

optiondiversificationcancontributeto

securityofsupply.Optionsencompass

differentconcretechanges,e.g.

diversificationcantaketheformofashiftfrom(Russian)gastocoalin

electricityproduction.Eventsare

developmentsthatsuddenlyhappen(e.g.anuclearaccident),have

unexpectedeffects(e.g.treedyingdue

toacidifyingemissions)orchangethe

waytrendsareperceived(e.g.the

Brundtlandreportontheimportanceof

thegreenhouseproblem).

Giventhesedevelopments,the

followingissuesareanalysed: Howdidthemajoreventsinfluence

theoptions? Didthe significanceofpolicygoals

changeduetotheevents?

Finally,observationsaremadeabout

overalltrendsandmechanisms,leading

tosuggestions

on

how

to

deal

with

futuredevelopments.



7/96

Policygoals

Thegoalsofenergypolicyareasecure,

affordable

and

clean

energy

supply.

Thesethreegoalswerealready

mentionedinthefirstWhitePaperon

Energyof1974andarestillvalid.

Securecanbefurtherdividedinto

securityofsupply(SoS)andreliabilityofdelivery.Thefirstissueinvolvesscarcity

ofresourcesandavailabilityofprimary

energycarrierswhereitisneeded.An

exampleistheinterruptionofgas

supplyto

Europe

in

2006

due

to

a

conflictbetweenRussiaandtheUkraine

ongaspayments.Thesecondissue

relatestothetimelyandappropriate

deliveryofsecondaryenergycarriers,

wherecapacityproblemsinrefineriesor

outageforelectricitynetworksplaya

role.

Affordablereferstothecostsofenergy

tothe

economy

in

general,

and

competitivelypricedenergyfor

industrial

users

in

particular.

What

is

affordablecanbesubjectofdiscussion,

butitisgenerallybelievedthatthevery

highoilpricesaround1980contributed

totheeconomiccrisisatthattime.

Competitive pricesareimportantfor

energyintensiveindustriesthatoften

selltheirproductsattheworldmarket,

e.g.aluminumandsteel(electricity)or

basechemicalsandpaper(gasoroil).

Aclean

energy

supply

means

that

the

burdenonthenaturalenvironment

and/orhumanhealthisaslowaspossible.Inpracticethemostimportant

energyrelatedissuesareacidification

duetoSO2andNOxemissionsandthe

emissionofCO2thatcontributestothe

greenhouseeffect.Therisksofnuclear

energy,e.g.dischargesofradioactive

substances,arealsopartofaclean

energysupply.

Optionstomeetthegoals

Energypolicyhasseveraloptionstoattaintheabovementionedgoals.

Theseoptionsweredevelopedinthe

courseoftimewhenandwhereitwasneeded,evenbeforeenergypolicywas

explicitlyformulatedinthefirstWhite

Paper

on

Energy

of

1974.

Below,

the

followingpolicyoptionsaredescribed:

diversification, storage,savings,

renewableenergy,cleantechnologies

andnonphysicaloptions.

Diversificationofprimaryenergysupply

hasbeenthemainoptionwithregardto

asecureenergysupplysincethefirstoil

crisisin1973.Atworldlevel

diversificationmeantsubstitutingcoal

andnuclear

energy

for

oil

or

gas.

In

the

Netherlands,thefocuswaslessonreplacinggasduetotheavailabilityof

largenationalgasreserves.

Diversificationalsoservedthegoalof

affordableenergycosts,ascoalprices

werelowerthanoilandgaspricesand

nuclearelectricitywas(expectedtobe)

cheaperthanthefossilbased

alternatives.Someformsof

diversification

contribute

to

a

clean

supply,e.g.nuclearenergywithregardtotheCO2emissions.Butthisisnotthe

casewhenreplacinggasbycoalin

powerstations.Aspecialcaseof

diversificationistheuseofliquefiedgas

(LNG) insteadofgasthroughpipelines;

heretheflexibletransportation mode

overlongdistancescanincreasesecurityofsupply.

Inthe

1960s,

coal

was

replaced

in

most

endusesectorsbynaturalgasfromthelargeGroningengasfield.Therefore,

substitutionbetweenprimaryenergy

Preface 7


8/96

carrierswasrestrictedtoelectricity

productionandpartofindustrialenergy

use.Intransportonlyveryrecently

options

for

replacing

oil

have

become

practical,e.g.naturalgasorelectricity.

Inthe1970s,theBorsselenuclearplant

replacedfossilbasedplants.

Substitutionbetweengasandoilhas

beenpracticedindualfiringpower

stationsuptothe1980s,substitutionof

gasbycoalbyretrofittinggasbased

poweror,inthe1980s,bynewcoal

powerplantsreplacingoldgaspower.

RecentlyLNGhasstartedtoreplaceimport

of

gas

through

pipelines.

Storageofenergycarriersisanotheroptiontoenhancesecurityofsupply.

Foroilastrategicoilreserveisavailable

intheRotterdamarea,tomeetatleast

90daysofoildemandincaseof

disruptionsofoilsupply.Fornaturalgas

theGroningengasfieldwithitslarge

(spare)capacityactedastheswing

producerfor

the

Netherlands

and

part

ofEurope.Inordertoplaythisroleas

longaspossiblethegasinthe

Groningenfieldhasbeenmaintainedas

muchaspossiblebyrestrictionson(new)gasuse,andbygivingpriorityto

extractionofgasfromsmallgasfields

undertheNorthSea. Whenthecapacitydecreased,compressorswere

installedtocompensateforthelower

pressurein

the

gas

reservoir

and

a

peak

gasinstallationwasbuiltinthe

Maasvlakteareainthe1980s.Inthe

ninetiesemptygasfieldswereusedto

createsparecapacityforseasonal

fluctuations.Electricitystoragesystems

werehardlyused,onlyintheformof

flexibleimportsbasedonpumpedhydro

systems.Reliabilitywasfoundinspare

generationcapacityabovethe

maximumannualloadand

arrangementswithlargeindustrialusersoninterruptiblesupply.

Energysavingsserveallthreegoalsof

energypolicy;theylowerthe

dependenceonprimaryenergycarriers

from

foreign

sources,

they

lower

the

costsofenergyuseandtheylimitthe

variousemissions.Ifthesaving

measuresarecosteffective,theymake

energyusemoreaffordableandthey

canalsoimprovethecompetitivenessof

energyintensiveindustry.Savingscanberealisedbyreducingenergydemand,

e.g.byinsulationofdwellings,orbya

moreefficientconversionofprimary

energyinsecondaryenergycarriers.A

specificexample

is

combined

heat

and

power(CHP),whichsavesenergy

comparedtotheseparateproductionof

electricityinpowerstationsandheat

productioninboilers.However,because

electricityproductionwithCHP

generallyisbasedongas,itdoesnot

alwayscontributetodiversification.

Someeffectsofrenewableenergy

sourcesare

the

same

as

for

diversification. Theylowerthe

dependenceonforeignenergysources

(secure)andlimitemissions(clean).

However,ingeneraltheydonot

contributetolowerenergycosts

(affordable)andinsomecasestheir

outputisnotavailablewhenneeded

(reliability).

Cleantechnologies

involve

end

of

pipe

measuresthatremove(alargepartof)

theunwantedemissionsfromthe

conversionprocess.Thisoptiononly

contributestothegoalofacleanenergysupply.Duetotheextracostsitdoes

notfavouraffordableprices,nordoesit

improvethesecurityofsupplyorthereliability.Theearliestexamplesof

appliedcleantechnologiesare

desulphurization units,andlowNOx

burnersinpowerstationsandindustrialboilersorfurnaces.Thesetechnologies

limitedtheacidifyingemissions,which

causedharmtonature,especiallyto



9/96


forests.Inthe1990s,the3waycatalyst

incarsandadaptationstodieselengines

alsolimitedotheremissions,suchas

ozone,

particles

and

hydro

carbonates,

whicharedetrimentaltohumanhealth.

Theuseoflowsulphurfuelsisnotatechnologyoptioninitself,butitasked

forremovaltechnologyinrefineries.

Finally,carboncaptureandstorage

(CCS)isproposedtolimittheCO2

emissionsof(coal)powerstationsor

largeindustrialprocesses.

Allpreviouslymentionedoptionscontribute

to

the

goals

by

influencing

thephysicalpropertiesoftheenergy

supplysysteminsomeway.Nonphysicaloptionscontributetothegoals

inanotherway,e.g.cheapgasfor

industryorpowerstations,contributing

toaffordablepriceswhilelimitingthe

emissions.

The

first

case

was

applied

in

1980throughtheGigantenscheme;

thesecondonein1989whenSEP

importedNorwegiangasatcoalkWh

costsforthenewEemspowerplant.

AnotherexampleistheEmission

TradingSystem(ETS)thatmakesit

possibletohavemorecoalpower

(bettersecurityofsupply),in

combinationwithbuyingemission

allowances(attheexpenseofaffordability),

without

influence

on

CO2

emissionsattributedtotheNetherlands

(notharmingthegoalforclean).

Majorexternalevents

Themajorexternaleventsarelistedin

Table1,includingtheir(estimated)

durationofinfluenceontheoptionsand

goals.

Thefirstoilcrisisresultedinaphysical

reductionofoilsupplytoOECD

countriesbyOPEC.EspeciallytheUSA

andtheNetherlandswerehitbecause

oftheirsupportforIsraelinthe1973

war.Butshortagesweremitigatedfast

byredirectingoiltransports,supplywas

backontrackafterayear,andoilprices

dropped

again.

The

sense

of

vulnerabilityinfluencedpolicyuptothe1990s.Thevisionontheroleofthe

Groningengasfieldchangedcompletely

duringthe1970s.Inthe1960sitwasthoughtthatthegasreservesshouldbe

exhaustedasfastaspossiblebefore

cheapnuclearenergywouldmakeit

uncompetitive. Inthe1970sthisidea

wasabandonedanditwasrealisedthat

thegas

reserves

could

play

a

beneficiary

roleinthelongerterm.Restrictionson

gasusewereformulatedin1978,but

duetoitscontributiontothegovernmentbudget,thispolicy

stagnatedin1981.Whenitbecame

clearthatmanysmallgasfields

compensatedforthedepletionofthe

Groningenfield,therestrictivepolicy

wasabandonedaltogetherinthe1990s.

The

most

important

effect

of

the

second

oilcrisiswasthehighpriceofenergy,

whichwasexpectedtolast.However,

theinfluenceofthiseventonpolicy

decreasedafterthepricefallof1986.


10/96

10

Energy:inspirationforthefuture

Table1:Overviewofeventswithsubstantialinfluenceontheenergysupplysystem

Event Durationinfluence

Comments

Firstoil

crisis

1973

1990

Gradual

end

of

influence

RoleofGroningen 19781995 RolediminishedinEUgasmarket

Secondoilcrisis 19791986 Sharpdropinpricesby1986

Acidificationproblem 19841995 Startandendyearnotprecise

Chernobylaccident 19862005 Newnuclearplannedaroundendyear

Brundtlandreport 19882008 Endyear>meetinginCopenhagen

EUpolicies 1992now AccelerationafterTreatyofMaastricht

Marketliberalization 1996now QuestionedafternetworkbreakdownNetworkbreakdown 2003 NewYorkandItaly

Gasdisruptions 2006now Strengthenedbyseconddisruption2009

Copenhagen

GHG

2008

now

Kyoto

Protocol

in

disarray

Fukushimaaccident 2011now Influenceremainstobeseen

Thestartoftheacidificationproblem

cannotbepinpointedtooneparticular

year.Theproblemwasalready

highlightedinthe1971reporttothe

ClubofRome.ThisEUwideproblem

becameanintenselydebatedissuein

Germanyin1984,whenitwasclaimed

thatonethirdofthetreesinforests

wereheavily

damaged

or

dying

(Grosse

Waldsterben).InthefirstNMP(national

environmentalplan,[RIVM,1989]) itwasstillamajortheme,butmoreand

moreitappearedthattheeffecton

treeswasnotasclearandurgent.However,theresearchersholdonthe

effectsinthelongerterm[PBL,2010].

TheChernobylaccidentledto

radioactiveprecipitation

all

over

Europe

andrestrictionsontheuseofcropsand

dairyproducts.Theaccidenthappened

shortlybeforetheofficialgovernment

decisiontobuildtwonuclearpower

plants,whichplanswereabandoned

directly.

TheBrundtlandreportwaspublishedat

theendof1987andputthegreenhouse

problem,which

for

decades

was

discussedonlyinacademicforums,on

theglobalpoliticalagenda.Especiallyin

theNetherlandsthemessagecame

throughloudandclearanditbecame

themostinfluentialeventforenergy

policyinthe1990s.RecentlyitbecameclearthattheKyotoProtocolwillnotbe

extended;lookingbacktheCopenhagen

meetingof2008canbeseenasthe

turningpoint.

EUpolicies

have

gained

more

and

more

influenceonDutchenergypolicy.Here

1992istakenasthestartingpoint,

becausetheTreatyofMaastrichtgave

theEuropeanCommissionmoreroom

toformulateapolicytopromotetheinternalmarket,includingthatfor

energy.Thisprocessledtoalarge

numberofdirectives(forenergyefficientbuildings,carsandappliances,

foremission

trading

and

for

the

structureofgasandelectricitymarkets)

andisstillongoing.

Marketliberalisationforelectricityand

gaswasputontheagendainthe1995

WhitePaperonEnergy.Itinfluencedin

particularthewayenergypolicyshould

realiseitsgoals,e.g.withmarketbased

instrumentssuchasenergytaxesand

emissiontrading,

instead

of

the

former

relianceonsemigovernmentalactors

likedistributioncompaniesandsocial

housingcorporations.Inthelastdecade


11/96

thenewmarketsystemwasmoreor

lessimplementedintheNetherlands

anditsfunctionasanewdriverof

changes

in

the

energy

system

subsided.

Thiswasstrengthenedbyquestions

aboutthereliabilityofthemarketbased

electricitysystem(seenetwork

breakdown).

ThenetworkbreakdownsinNewYork

andItalyin2003causedmajor

disruptionsinelectricitysupplyand

raisedmanyquestionsaboutthe

reliabilityofthesystemunderamarketregime.

Moreover,

interruptions

of

electricitydeliveryoccurringin2000and

2001inCaliforniaprovedtobetotheresultof aflaweddesignofthemarket

system.

ThedisruptionsofRussiangassupply

toEuropeinJanuary2006and2009,

causedbyadisagreementbetween

RussiaandUkraineonpaymentsforgas,

showedthat

a

third

party

can

jeopardise

acontractbetweensupplierand

consumer,leavingbothRussiaandthe

EUpowerlesstorestorethesituation.

Thisdevelopmenthasagainputfocus

onthevulnerabilityofEuropesgas

supply,

which

is

expected

to

grow

in

the

future.

TheCopenhagenmeetingfailedto

produceagreementsatworldwidelevel

tolimittheemissionsofgreenhouse

gases.TheexemplaryroleoftheEUhas

notledtoachangeinbehaviourof

othercountriesintheworld.Recentlyit

becameclearthattheKyotoprotocol

willnotbecontinuedafter2012.

Thebreakdownofseveralnuclearplants

inFukushimainMarch2011onceagain

stressedtherisksofnuclearpower,

althoughtheeffectsinotherpartsof

theworldremainedquitemodest.The

responsesweremixed,rangingfromacompleteGermannuclearexitto

expansionasplannedinChina.The

Dutchgovernmenthasannouncedthat

itwill

continue

with

its

plans

for

one

or

twounits.

Overviewofevents,optionsandgoalsovertime

Thedevelopmentshavebeenputontimelinesfrom1970to2011(seeTable

2).Eacheventismarkedonthetime

linefortheadjoiningpolicygoal(see

upperpart).Thetimelinesfortheoptionswerefilledwithconcrete

changesintheenergysupplysystem(seelowerpart).Theintensityofthe

colourofthetimelinedepictsthe

importanceof thegoal(upperpart)or

thefocusontheoptions(lowerpart)overtheperiod.



12/96

ChangingviewsinDutchp

Table2:Timelineforevents,optionsandgoalsintheperiod19722011

OC=oilcrisis

Peak=pricehike2008foroil

Giganten=gasforcoalparityprice

TMI=Harrisburgnuclearaccident

Ukraine=disruptionRussiangassupply

MDE=Publicdiscussiononnuclearenergy

NIP=NationalInsulationPlan

DH=DistrictHeating

MAP=

Environmental

Action

Plan

distribution

companies

VA=VoluntaryAgreementonsavings

BM=Benchmarkcovenantindustryon

EPR=EnergyPremiumScheme(saving

S&Z=Clean&EfficientsavingsprogramIPW=IntegralWindProgramme(R&D

MEP=EnvironmentalQualityElectricit

SDE= StimulatingSustainableEnergy(

SGPP=Selectivegassupplyforpower

BIPC=FuelPlanPowerPlants

RRSO2

=

Removal

of

SO2

from

stack

ga

SEPCov=Covenantontechnologicalm

1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 199

SECURE

SecurityofSupply OC1 RoleGroningen Berlin

Reliabledelivery

AFFORDABLEHighcosts OC1 OC2 pricedrop

Competitive prices Giganten Coalgasparity

CLEAN

Envi ronment Cl ubv.Rome Waldsterben

Climate Brundtland EUpolicy Kyoto

Radiation TMI Tsjernobyl

DIVERSIFICATION

Substitcoal Minesclosed GtoC coalpower

Substnuclear Borssele Moratorium MDE 2PP GHGoption

STORAGE

Emergency/peak IEA/oil LNGpeak Alkmaarpeak Lang

Gasreserves noexports smallf ie lds Re stri cti ve oi lpower coalind. import STEG,CHP

SAVINGS

Enduse Gas

oil

parity NIP WIR

ET MAP VA BM

CHP DH CHPind. CHPJV VA

RENEWABLES IPW MAP 10% REB

CLEANTECHNOLOGIES SGPP BIPC? RRSO2 SEPCov Bugg. 3waycatalyst

Events(pergoal)

Optionsandchanges


13/96


14/96

blockedthinkingaboutnewplantsfor

years,untilpublicresistancegradually

fadedanditbecameanoptiontosolve

the

greenhouse

problem.

Moreover,

the

productionofexistingplants(Borssele

andDodewaard)wasquestioned,butin

the1990sanextensionofthelifetimeof

Borsseleupto2003wasalreadyagreed

on, andnowitwillevenrununtil2033.

Withcoalatitsplannedcontribution,

otheralternativesfornuclearwere

foundinadditionalelectricityimports

(partlybasedonnuclear)andcombined

heatandpowerbasedongas.Inaddition,

renewable

energy

received

moreattention,ashighlightedbythe

IntegralProgramWindandtheexperimentalwindfarmofthe

combinedelectricityproducers(SEP)in

Sexbierum.

TheBrundtlandreportstrengthenedall

previousactionsonresourceuseand

environment,butitalsointroduced

reductionof

CO2

emissions

as

a

major

newtheme.Especiallyinthe

Netherlandsitledtomanyactionson

energysavingsandtheuseof

renewablesources,bygovernment,industry(VoluntaryAgreements)and

electricitycompanies(Environmental

ActionPlanandHeatplan).Itraised

fundamentalquestionsabouttheroleof

cheapenergyasdriverofeconomic

growth(analysed

in

the

Wolfson

study

onenergytaxes).Aspartofa

restructuringofthetaxsystem,a

regulatorytax(REB)forsmallscaleuse

wasgradually introducedfrom1995

onwards.Coalpowerproductionwas

challenged,butcouldcontinueby

combiningitwithbiomassuse.Finally,

Brundtland putcleantechnologiesforCO2captureandsequestration(CCS)on

theagenda.

EUpoliciesonenergybecamemuch

moreinfluentialaftertheTreatyof

Maastricht,withtheinternalmarketfor

productsandservicesasamaintheme.

TheEUintroducedmuchnewpolicyon

theroleofthemarketinenergysupply,

especially

for

gas

and

electricity

as

coal

andoilwerealreadymarketdriven.

Otherdirectivesregardedlabelingofappliances(1992),cleanindustrial

installations(IPPC,1996),energysavings

inbuildings(EPBD,2002),emissioncaps

andtradingforCO2(ETS,2003)and

combinedheatandpower(CHP,2004).

Theliberalizationofenergymarketsin

theNetherlandsanticipatedondecisions

to

be

taken

at

EU

level.

It

was

dealtwithintheThirdWhitePaperon

Energyof1995.Onedirectconsequencewasastagnationofthesavingactivities

asthefocusoftheenergysectorshifted

tosurvivingasacompanyinthenew

market.Anothereffectwasthatthe

coordinatingroleofSEPwaslifted,and

theoptimizationofproductionperplant

tominimizetotalfuelusewas

abandonedat

the

cost

of

considerable

extrafuelconsumption.Moreover,for

CHPthefavourableratiobetweenhigh

electricityprices(benefits)andlowgas

prices(costs)changedduetothemarkettrends,andcapacityextensionin

industrystagnated.Amorefundamental

effectofthemarketmodelwasthatnewtypesofpolicyinstrumentshadto

bedeveloped,e.g.theRegulatory

EnergyTax

(REB)

on

gas

and

electricity,

introducedfrom1995onwardsandthe

EmissionTradingSystem(ETS)forlarge

emittersinEurope.

ThenetworkbreakdownsinNewYork

andItalyin2003,andtheinterruptions

inCaliforniain2000castdoubtonthe

reliabilityofthesystemunderamarketregime.ThenewEUdirectiveon

electricitysupplyandtheDutchEnergy

Reportof2002paidmuchattentiontoassuredreliability.



15/96


ThelackofagreementinCopenhagen

ontheworldwidegreenhouse

approach,in2008,didnothavedirect

consequences

in

the

short

term

because

theEUdidsticktoitsleadingroleinthe

worldandtoitsearlierdecidedgoals.However,thepositionofthe

Netherlandsasforerunner,whichwas

alreadydeterioratingsince2000,

changedtothatofonlymeetingthe

minimumgoals.Recently,doubthas

beenexpressed[PBL,2011]aboutthe

feasibilityofrealisingthetargetsfor

renewableenergyandCO2in2020withplanned

measures

within

the

Netherlands.

Thedisruptionsingassupplyfrom

Russiain2006showedtherisksofthe

largeandincreasingdependenceon

Russiangas,anissuethatmovedoutof

sightduringtheshifttoamarketbased

gassupply.Itfurtherstimulatedstorage

facilitiestobridgeseasonalfluctuations,

similartotheonebuiltinLangelooand

the

one

planned

in

Alkmaar.

It

acceleratedthedevelopmentofanew

transportroutenorthoftheUkraineandasouthernroutefortransportof

nonRussiangas.However,forthe

momentdiversificationawayfromgas,

tolimittheincreasingdependence,is

notdiscussed.

TheeffectoftheFukushimaaccidenton

adecisiontobetakenonnewnuclear

plantswas

quite

different

from

the

situationafterChernobyl.TheDutch

governmentannouncedthatitwouldnotchangeitsplansfornuclearpower

inanyway.Moreover,theGerman

decisiontostopwiththenuclearoption

isseenasanopportunityfornewnuclearpowerintheNetherlands.

Eventsand

importance

of

policy

goals

Thesecondpartoftheanalysislooksat

theeffectoftheeventsontherelative

importanceofthethreemainpolicy

goals.Forthisanalysisthemaingoals

havebeensplitinto:

secure:securityofsupplyand

reliabilityofdelivery affordable:coststotheeconomyand

competitively

priced

energy

for

industry clean:emissionsharmfultonature

(SO2,NOx),tohumanhealth(air

pollution,radiation) orboth(ozone,CO2).

Foreachofthesubgoalsthedeciding

eventsareasfollows.Thegoalsecurity

ofsupplyhasbeeninfluencedmostby

thedisruptioninoilsupplyduringthe

firstoil

crisis,

and

to

a

lesser

extent

by

thetwogasdisruptionsduetothe

UkraineRussiadispute.However, the

largegasreservesintheNetherlands

havemitigatedthisproblemsofar.The

reliabilityofdeliveryhasneverbeenanissueforgas.Forelectricityitbecame

anissueduringtheliberalizationofthe

marketwhenblackoutsoccurredin

California,NewYorkandItaly.Costto

theeconomywastheprimeconcern

afterthesecondoilcrisis,whichledto

the

highest

oil

prices

ever.

The

recent

pricehikeforoilin2008hadamuch

smallerimpactduetothesmallerrole

ofenergycostsfortheeconomyand

shorterdurationofhighprices.

Competitivelypricedenergyforenergy

intensiveindustrywasanissueafterthe

secondoilcrisis,untiltheloweredgas

prices,resultingfromtheGiganten

scheme,limitedthedifferencewith

pricesbased

on

coal

and/or

nuclear.

The

possibilitytoimportelectricityandthe

marketliberalizationeasedtheproblem

further.Itwasonlyduringtherecent


16/96

pricehikein2008thatcompetitiveness

becameanissueforashortwhile.

Harmful

emissions

to

nature

became

an

issueinthe1980swhentreeswere

claimedtodiefromacidifyingemissions.

Theissuedisappearedfromtheagenda

aftertheeffectontreeswaschallenged,

butemissionsofSO2andNOxwere

alreadycutsignificantly.Asforharmful

emissionstohumanhealth,largecuts

weremadeaswell,althoughsmall

particlesarestillamatterofconcern

today.Radiationanditseffecton

humanhealthbecameaveryimportant

issueaftertheChernobylaccident,

much

more

than

after

the

accident

in

Harrisburg(TMI)in1979ortherecent

Fukushimaaccident.However,eventhe

Chernobyleffecthasfadedawayinthe

lastdecadewithplannednuclearplants

inmany(developing)countriesallover

theworld.

Changesin

the

priorities

for

the

goals

Secure,intheformofavailability,has

beenthemostimportantgoalsincethe

firstoilcrisis.Affordable,referringboth

tocosttotheeconomyandto

competitiveprices,becameimportant

afterthesecondoilcrisis.Thepriorityof

bothgoalsfadedafterthedropinoil

pricesandampleavailabilityofgas.

Cleangraduallygainedimportancein

the1980s(acidificationandradiation),

butbecametheoverridingissueinthe

1990s(greenhouseproblem).Recently

secure,intheformofreliabledeliveries,

camebackduetolargescaleblackouts

andtwointerruptionsforRussiangasto

Europe.Affordableisbackonthe

agendasincethepricehikein2008and

thepeakoildiscussion.Butcleantends

tobecomelessimportant,asclassic

environmentalproblemshavelosttheir

sharpness,andconcretesolutionsfor

thegreenhouseproblemremainoutof

sight.

Overallitcanbeobservedthatatfirsta

newgoaloverruledimportantearlier

goals,butfadinggoalsarebeing

revived,althoughsometimesina

differentform.

Changesfortheoptions

Diversification

has

been

an

issue

in

the

Netherlandssincethefirstoilcrisis,but

lessthanabroadduetothelargegas

reservesintheNetherlands.Ithasbeen

hinderedbyrisks(fornuclear),

emissions(forcoal)orcostsand

reliability(forrenewable).Storagehas

beenanissueforoilsince1973andfor

gasfromabout1978onwards,but

mainlytomaintaintheroleof

Groningenasswingproducer.Sincethe

gassupply

disruptions,

storage

has

becomeanoptioninitsownright.Savingshavealwaysbeenoneofthe

options,

either

to

limit

dependence

on

foreignsources,tocopewithhighenergypricesortomitigateharmful

emissions.Renewableenergyonly

gainedarealroleinthe1980safterthe

nuclearoptionwasblockedandthe

broadsustainabilityconceptemerged

fromtheBrundtlandreport.Clean

technologieswereparticularly

successfulinthe1980s(SO2,NOx)and

1990s(airpollutionofcars),butplayed

norole

for

the

new

greenhouse

problemsofar.



17/96

Overallobservations

Giventhedescribeddevelopmentsfor

the

whole

period

1972

to

2011,

some

birdseyeobservationsaremade.

Alleventsmentionedhavebeen

setbacksforoneormoreofthegoals.

Theyrestrictedsolutions(suchas

Chernobylfornuclearenergy)ormadeitmoredifficulttoattainthemaingoals

(suchastheemergingacidificationand

greenhouseproblemsfortheclean

goal).Therewerenowindfallevents,

suchas

technological

breakthroughs

thathappenedoutoftheblue.Oneso

calledbreakthrough,thecoldfusion

processpublishedbyFleischmannin

1989[Wikipedia],provedtobeahoax.

Onerealpositiveeventforsocietyasa

whole,thebreakdownoftheiron

curtain,didnotimprovetheenergy

situationinEuropeandprovedtomake

thegassupplyfromRussialessreliable

dueto

the

independence

of

Ukraine.

Plannedchangesintheenergysupply

systemcanbeblockedbyaccidentalevents.Thebestexampleisthe

Chernobylaccidentwhichfrozethe

nucleardiversificationoptionfor

decades.Butthesamecouldhave

happenedtootherplannedchanges,

suchastheintroductionofthemarket

concept

in

the

nineties.

Would

this

concepthavesurvivediftheblackouts

likeinNewYorkorItalyin2003had

occurredearlierataEuropeanscale?

Theintroductionofoptions,inreaction

toevents,doesnotalwaysleadto

betterachievingthegoalsofenergy

policy.Someoptionswereverysuccessful,suchascleantechnologies

forlimitingacidificationorairpollution

(exceptcoal

gasification).

This

is

also

validfortheoptionenergysavings

(includingCHP),exceptfortheperiod

after2000whenthisoptionstagnated.

Thestorageoptionwasarelativelyeasy

one,

due

to

the

presence

of

the

Rotterdamoilindustry,thepropertiesof

thelargeGroningengasfieldforbalancingdemandandsupply,andlater

theavailabilityofsuitableemptygas

fields.However,themajor

diversificationoptionsappearedto

createnewproblems(theshifttocoal

forthegreenhouseproblemandnuclear

powerforsafety).Therenewable

optionhasonlyrealisedamarginal

contributionto

a

changing

energy

supplysofar.Finally,thenonphysical

optionofcheapgas,tohavecompetitiveenergyprices,wasonly

possibleinapastwithlargeand

increasinggasreserves.

Withregardtothesecuritygoal, the

problemofexhaustionofresources,

lookslesspressingnow,duetoalower

growthrate

for

worldwide

energy

consumptionthanexpectedin1973,

andmoreoptimisticestimatesforgas

reserves.However,foroilthereserve

productionratehasnotimprovedinthe

pastdecadesandthepeakoildiscussion

pointsatsupplyproblemsinthenear

future.Theavailabilityhasbeenmademoresecurebyemergencystocks(oil),

storageinemptygasfields(gas)and

spreading

across

different

regions

(Africanoil)andtransportmodes(LNG).

Contrastingwiththispositive

developmentsistheincreasing

dependenceofEuropeonoil(afterthe

NorthSeaboom)andgas(withnomajor

discoveriesafterGroningen,UKand

Norway).

Astothesecondgoalaffordable,no

structuralsolutionshavebeenfound.

Thelow

prices

from

1986

to

2000

were

amatterofadvantageoussupply

demandratios.Thepricehikeforoilin

2008showsthathighenergypricesare



18/96

stillpossibleatanymomentandthe

peakoiladvocatesexpecttheseto

becomepermanent.Thecontributionof

options

with

stable

production

costs

(nuclear,coalandrenewable)aretoo

lowtomaketheeconomyinsensitiveto

thesedisturbances.Theonlypositive

elementisthemuchlowerenergy

intensityoftheeconomy,thanksto

energysavings,whichlimitstheharmful

effectsofhighenergyprices.

Astothecleangoal,someenergy

relatedproblemshave(toagreatextent)

been

solved,

such

as

the

acidificationproblemandtheair

pollutionproblem.However,asuccessfulapproachforthe20yearold

greenhouseproblemhasnotemerged

andevenbecomesmoreandmore

questionable.Fukushimahasshown

that

the

advocated

nuclear

solution

to

manyenvironmentalproblemsisnot

withoutriskstosocietyatlarge.

Currently,economicopportunitieshave

becomeafourthpolicygoal.Inthepast

thesetupofanexportingindustrywas

alwaysanextraargumentfor

governmentRD&Dsupportonnew

energytechnologies.Nowasustainable

energysupplyingeneralisseenascontributing

to

the

economic

developmentofacountry.Thisnew

goalmayfavortheoptionsrenewableenergyandsavings.

Lessonsforthefuture

Thehistoricanalysisshowsthatthe

mechanismofdeliberatechangesinthe

energysystem,

bringing

the

goals

closer

whichinturnreinforcesthechanges,

didnotalwaysworkout.Forinstance,it

hasnotbeenpossibletoattainasecure

energysupply,oreventomaintainthe

levelofsecurityofsupplyafterthe

discoveryinthelargeGroningengas

field.Forthefuturethismaybeagain

thecaseforthecleangoalinrelation

togreenhousegasses.Ifthereisnoview

onabreakthroughattheinternational

levelitwillbecomedifficultfortheEUtosticktotheirleadingrole.IftheEU

reiteratesfromthisfield,the

greenhouseproblemwillnotdriveany

morethechangesinenergysupplyin

theNetherlands.

Still,problemswithattainingagoaldo

notmeanthattheoptionsarenot

appliedanymore.Historyshowsthat

optionslike

energy

savings

are

applied

fordifferentreasons.Atfirst,savingsshouldlowerthedependenceon

insecureenergysources,laterthey

shouldalsolowerhighenergycostsand

finallytheyshoulddecreaseharmful

emissions.It

is

possible

that

in

the

futuresavingswillberealizedagainto

avoidhighenergycostsratherthanto

avoidCO2emissions.Ontheotherhand,

CCSascleantechnologyoptionserves

onlythecleangoal.Therobustnessof

optionsshouldplayalargeroleinfuture

energypolicy.

Thegovernmentrevenuesfromlarge

gasreserveshavebeenanopenly

debatedinterestinenergypolicyformulation,nexttothethreegoalsof

secure,affordableandcleanenergy.

Interestingly,thisisnotthecasefor

otherintereststhatmayinterferewith

thegoalsandoptions.Forinstance,

policymakersandenvironmental

partiesweresurprisedbyShell

abandoningtheirPVbusinessbecause

theiroldoilandgasbusinessoffered

betterbusiness

opportunities.

In

most

viewsonthefutureenergysystemanexplicitanalysisofpossibleopposing

forcestothenewsustainableoptions,



19/96

duetoexistingadverseinterests,is

lacking.

In

the

past

the

importance

of

goals

and

theoptionstomeetthemchangedtime

andagain,oftenduetoevents.Onthe

onehandaflexiblepolicyapproachis

neededtocopewiththesechanges,but

ontheotherhandastablepolicyis

neededtoprovidetherightlongterm

signalstoinvestors.TheUKclimatelaw

thatstateslongtermgoals,butoffers

flexibilityinthewayhowtorealise

them,mightbeasuitableapproachtointegrate

both

demands.

Despitethelackofwindfalleventsinthepastoneshouldstillpayattentionto

possiblepositiveeventsinthefuture.A

firstexampleisastronglydecreasing

needfortransportofpersonsdueto

ICT/communicationdevelopments.A

secondoneistherecurrenceoftheso

calledsmalliceagethathasloweredthe

temperaturewith

1

to

2

degrees

comparedto14001800[Wikipedia].

Thecurrentcontinuedabsenceof

sunspotsmightindicatethis.Thefirst

eventhelpstolimitemissions,whilethe

second

one

creates

more

time

to

find

solutions.

Finally,oneshouldlookbeyondchanges

inenergysupplyandatfundamental

trendsupto2100.Inthepast,partof

theimprovementswererealisedby

developmentsoutsidetheenergy

domain,suchasthedecreasinggrowth

ofthepopulation,thelessenergy

intensivestructureoftheeconomyand

thelower

economic

growth

due

to

crisis.Thesefactorshavecontributed

largelytoastabilisingenergy

consumptionafterthelargeincreases

upto1973.Forthefutureadecreasing

energydemandcouldresultsfroma

shrinkingpopulationandaneconomicgrowthwithhardlyconsequencesfor

energy,forexampleduetospending

shiftingtolabourintensiveservices.

References

Generalsources

DertigjaarNederlandsEnergiebeleid(Thirtyyearsofenergypolicyinthe

Netherlands),J.J.deJong,E.Weeda,Th.WesterwoudtandA.Correlje,CIEP,2005.

Energieverslag

Nederland

(Energy

account

for

the

Netherlands),

ECN,

1993

2009.

NationaalMilieubeleidsplan (NMP,NationalEnvironmentalPlan),RIVM,1989.

Stilstaanbijvooruitgang(Dwellingupondevelopments),EditorH.Hermans,

PublicationoftheMinistryofEconomicAffairs,1990.

VariousWhitepapersonEnergy(Energienota),MinistryofEconomicAffairs.

Specificsources

PBL,2010:Zureregen.EenanalysevandertigjaarNederlandse

verzuringsproblematiek(AcidrainAnanalysisofthirtyyearsofDutch

acidificationproblems),E.Buijsmanetal,Rapportnr.500093007,PBL,November

2010

PBL,2011:

Emissions

and

targets

of

GHG

not

included

in

the

ETS

2013

2020,

Analysis

oftheimpactoftheEuropeanEffortSharingDecisionfortheNetherlands,M.

Verdonk,PBL,2011

Wikipedia:Coldfusion,KleineIJstijd(Smalliceage).



20/96

ChangesinNorthwestEuropeanenergysystems 20

ChangesinNorthwestEuropeanenergysystems:

differentviews,nocoordinationyet

PieterBoot

Ithasincreasinglybeenacceptedthat

NorthwestEuropeanenergysystems

havetochangeandbecomemore

sustainable(Bruggink2006,ECN2007).Governmentsandenergycompanies

acknowledgethatafundamental

changeintheenergysystemisneeded

andhastobeorganised(Eurelectric

2010).ThepioneeringRoadmap2050bytheEuropeanClimateFoundationwasa

milestoneinthisrespect(ECF2010).It

wasamilestoneinseveralways:the

electricitysystemwasplacedatthe

heartofthetransitionasthestudy

arguedthatwithoutafundamental

changeinpoweranoveralltransition

cannotbeachieved;itarguedthata

carbonfreeEuropeanpowersystemby

2050is

technically

feasible

and

financiallydefendable;anditillustrated

howEuropeancooperationmayhelpall

partnersinvolved.TheECFstudy,to

whichECNcontributed(Bootandvan

Bree2010),stimulatedaplethoraof

activitiesbytheEuropeanCommission,

suchastheClimateandTransport

Roadmaps(Spring2011),tobe

succeededbytheEnergyRoadmap

(Autumn2011).

At

the

same

time

individualcountriesdevelopedtheir

ownviewsonchangesintheenergy

system.Theseviewshavebeen

developedindifferentpoliticalandculturalsettings,withdifferentaims

butassumesomekindofcommon

Europeanapproach.

Theaimofthispaperis: Toinvestigatethebackgroundsand

approachesofthechangesinthe

energysysteminfourNorthwest

Europeancountriesthatarephysically

connectedbytransmissionlines:

Denmark,Germany,theNetherlands

andtheUnitedKingdom1

. Toanalysethesimilaritiesand

differencesofthesecountries.

Toinvestigatewhethermorecoordinationbetweenthesecountries

wouldbeuseful,feasibleandwhatit

couldlooklike.

Thesefourcountrieshavebeenselected

asthreeofthemhaveexplicitenergy

transitionapproachesorlongterm

visions,whereastheNetherlandsis

developingalongtermroadmapand

becausetheyneedeachotherphysically

toattaintheirambitions evenwhentheyperceivetheirneighboursas

energyterraincognita2.

Thepaperisorganisedasfollows.

Section1givessomeindicatorsofthe

currentsituationinthefourcountries

andpresentstheirambitions.Section2

sketchesthemainaimsanddriving

forces,whileSection3presentsthe

differentpolicyapproachesand

1 ItwouldbeusefultoincludeBelgium,

FranceandNorwayinamoreextensive

analysis.Thesecountriesarephysically

linkedtothefour,butdifferremarkablyinenergypolicy.Belgiumhasnothada

governmentforoverayearandstruggles

withthequestiontowhichextentenergy

andclimatepolicieswillbedecentralised;Francehassomespecificpolicy

instruments.Norwayhasalready97%

renewablepower.2 ComparetheremarkbyformerIEA

ExecutiveDirector

Tanaka

that

the

German

decisiononnuclearenergyneglectedthe

Europeandimension:ItisnoGerman,but

aEuropeanproblem(FinancialTimes

Deutschland,16May2011).


21/96

instrumentsunderconsideration. The

nextsectiondiscussesthechoiceof a

topdownorbottomupapproach,

investigates

industrial

opportunities,

andelaboratesonthestrengthsand

weaknessesofthedifferenttrajectories.

Section5goesbacktothemain

questionwhichprogressinenergy

transitionhasbeenmade,towhich

extentmorecoordinationcouldbe

usefulandwhichthemescouldbe

explored

in

this

respect.

This

paper

focusesonelectricityasthisisthepart

oftheenergysysteminwhichthefirst

bigleapsforwardaresupposedtobe

madeandinterconnectivityisstrongest.

Presentsituationandambitions

Table1presentssomekeyindicatorsoftheelectricitysysteminthefourcountries.

Table

1.

Fuel

mix

in

power

generation,

2007

(1)

[%] Coal Gas Nuclear Renewable Renewable

excl.hydroCO2

intensity(2)

Denmark 51 18 29 29 120

Germany 47 13 22 15 12 107Netherlands 24 61 4 8 8 109

UK 35 42 16 5 4 112

(1) Grosselectricitygeneration

(2

) Shareofcoalweighsdouble,gasonce,nuclearandrenewablezero.

Source:EuropeanCommission,EUEnergyandtransportinfigures,2010.

Denmarkand

Germany

are

the

kings

of

coal,despitetheirimageofbeinga

championofrenewableenergy.Ifwe

excludehydro whichwasmainly

installeddecadesago theachievement

ofDenmarkwithregardtonew

renewableenergyisindeedimpressive

andtheUKlagsbehind.The

NetherlandsandtheUKhavelargesharesofgas,whileGermanyandthe

UKhave

a

significant

share

of

nuclear.

A

simpleindicatorofCO2intensityshows

thatDenmarkismostCO2intensive,

whereasthe

other

countries

are

comparable.AllofthemaremoreCO2

intensethantheEUaverage,whichis

influencedbyitslargersharesofnuclear

andhydropower.

All four countries have presented their

ambitionsrecently.Asweareespecially

interested in the longterm ambitions,we will concentrate on those and deal

withthe

20/20/20

policies

only

in

that

context.



22/96

Table2.Ambitions,driversandpolicyapproachesinlongtermenergypolicy

UnitedKingdom Germany Denmark Netherlands

Maindrivers 1. Climate2. Costs3. Industrial

opportunities

1. Ethical2. Climate3. Industrial

opportunities

1. Securityof

supply

2. Climate3. Industry

1. Costs2. Industrial

opportunities

Maintarget2030 CO2 60%Electricityfully

decarbonised

30%renewable

energy

CO2 55%

Otherambitions

2030Renewable30%

Renewable

electricity50%100%

renewableelectricityand

heat

Ambition2050 80%GHG (legally

binding)

Minimal 80%GHG,

60%renewableinfuelmix(80%of

electricity,10%

CCS,restpeak)

100%

renewable,nofossilfuels,of

which6080%

wind; 75%GHGinenergy

system

80%GHG

Illustrativefuelshares2030

(power)

40%renewable,

40%nuclear,15%

CCS,10%othergas

(dependingon

relativecosts)

Nonuclear(after

2021),50%

renewable,CCS,

gas/CHP

Electricity40

70%oftotalenergy

demand:45%

wind,20%heatpumpsand

solar,35%

biomass

Sharesofrenewable,

gas,nuclearandcoal;

someCCS

Policyapproach Legallybinding

carbonbudgets;

strongincentives

foroffshorewind,

spatialplanning

promotesonshorewind,greendealto

promote

efficiency

Decentralisation,

monitoring,

nationaldialogue,

moreR&D,national

gridpolicy,spatial

planningonshore

wind

Fueltax,

obligationsfor

fuelindistrict

heating

Spatialplanningonshorewind,gas

roundabout;green

dealwithcommunitiesand

companies

Infavourofstrengthening

2020CO2target

Yes Yes Yes No

Newinstruments

toinfluence

marketstructure

considered

CO2minimum

prices,contractsfor

differences,

capacitymarketor

longtermauction,InvestmentBank

Nofirmintentions.

Capacitymarketandcarbonlaw

under

investigation; incentivestorage

needed?

Fossilfueltax

2020target

%electricity

Expectedtobe

attained?

15%35%

AccordingtoCCC:

yes

17.5%35%

Accordingto

Prognosetal:yes

30%60%Government

expects33%

14%35%

Only812%according

toPBL



23/96


Mainaimsanddrivingforces

Afirstobservationisthatthedriving

forces

of

energy

transition

approaches

differ.Theambitiontoattainadecrease

ofgreenhousegasesisthemaindriver

oftheUKapproach,followedbyaclear

aimtocontrolcostsandstimulateclean

technology.Meanwhile,the

Britishperceivethechangefromexportertoimporterofgasasa

potentialthreat.Thesecondandthird

aimsarethemainfocusinthe

Netherlands,withoutmentioninga

longerterm

greenhouse

gas

reduction

targetbutacknowledgingtheEuropean

ambitionofa80%reduction(ELI2011).

Remarkably,thegovernmentofthe

countrythatmoreorlessinventedthe

conceptofenergytransitioninactual

energypolicy(VROM2007),abandoned

theframeworkofalongtermapproach

intheyear2010.Theneedtocontrol

costsintheshorttermisfeltsoheavily

thatthe

long

term

investments

financed

bythegovernmentarebeing

postponed.TheNetherlandsrestricts

itselfintryingtoachievetheEuropean2020targets.Denmarkhasplaced

securityofsupplyattheheartofits

ambition:itwantstobefossilfreeby

2050.Bothclimateambitionsand

opportunitiestodevelopaclean

technologysectorgohandinhandwith

the

attempt

to

realise

this

aim.

At

first

sight,Germanysawfundamental

changesinitsenergypolicyambitions

bychangingtheroleofnuclearenergy

twotimesinoneyear:existingreactorswerenotallowed(untilSeptember

2010),theirlifetimewasextendedwith

12years(untilMay2011)andagain

theyarenotallowedwithinadecade.However,itslongtermambitionto

attainbyfaramajorityshare(80%)of

renewableenergy

in

its

power

fuel

mix

by2050aspartofagreenhousegas

emissionsreductionwith80%hasnot

changed.Wecointhemaindriverof

Germanlongtermenergypolicy

ethical,

adopted

from

the

name

of

the

advisorygroupthatarguedinfavourof

furtherstrengtheningthelongtermapproachandendingnuclearenergy

withinadecade(EthikKommission

2011).Theargumentsofthisadvisory

groupwereexplicitlyethicalbynature.

Secondary,asinDenmark,areclimate

andcleantechnologyarguments.

TheNetherlandshasnolongterm

approachyet,

but

expects

to

develop

a

RoadmapClimate2050bytheendof

2011(ELI2011).Indeed,anintegratedlongtermstrategyseemstobe

necessarybecauseoffourreasons:

-Withoutastrategy,governmentsdonthaveastorytotell.Andwithoutastory,thegeneralpublic

tendstoopposemostfuels.Coalis

dirty,nuclearisdangerous,CCSis

unknown,wind

doesnt

look

nice

and

takesspace,transmissionlinesare

uglyanddangerous,solarPVistoo

expensiveonlygasiswithout

apparentdisadvantages,buthasto

beimportedfromRussia.This

resistancecannotbetackledwithouta

clearstoryaboutthefutureandhow

itcanbeobtained.

-Investmentsinpowergenerationandinfrastructure

have

been

unbundled

duetoEuropeanlegislation.Withouta

clearguidanceofinvestmentsin

generation,investmentsin

infrastructureareonlycoincidentally

costeffectivenobodywouldconsidertoinvestinnewtrains

withoutknowingwhethertrackwas

availableornot.However,

investmentsingenerationrequiresomekindofviewbythegovernment

onhowclimateandsecurityofsupplyconsiderations arebeingweighed.


24/96


-Astheshareofintermittentrenewableelectricity(windandsolar)

willincrease,interactionsbetween

generation,infrastructure

and

demandsideresponseorstorage

optionswillstrengthen.

-Withoutsomekindofguidance,lockinsinpowergenerationarelikelytooccur.Thisisnotvalidonlyforthefuel

mixandtherelationwithenergy

efficiency,butalsoforspatialplanning

(e.g.willitbeobligedtouseheatoffossilfuelburning,orwillCO2storage

beobligedbothpossibleobligations

mightleadtochangesin(dis)advantagesofspecificlocations).

Thethreecountrieswithalongterm

viewunderlineboththenecessityto

perceivetheenergysystemasone

integrated

system,

to

take

actions

in

the

shorttermthatarealsoviewedfrom

thelongtermperspective,tomakeroomformarketforceswhichwillbe

allowedtodeterminethefuelmix,but

striveforstabilityintheformofafixed

andlongtermframeworkforenergy

policy.

Itisunderstandablethat,iftheaims

differ,theapproachesdifferaswell.The

mosttypical

of

them

will

be

sketched.

Fundamentalapproaches

TheUnitedKingdomorganiseditslong

termenergypolicyaroundtheClimate

Law.Basicelementsofthe2008Climate

Laware

(Client

Earth

2009):

-Abindinggreenhousegasemissionreductiontargetof80%by2050.

-ThecallintoexistenceofaCommissiononClimateChange,which

advisesthegovernmentonspecific

fiveyearcarbonbudgetsandhowto

attainthem.

-Aframeworkofhowandwhenthegovernmenthastoreactonthis

advice,

in

particular

the

eventual

need

tohavethreefiveyearcarbon

budgetsinplace.

TheCommissiononClimateChange

alreadyadvisedonfourcarbonbudgetsupto202327andtheUnitedKingdom

governmentacceptedallofthem,

althoughthelastonewithminorchangesfromtheadvice

3. The

3

TheCommission

on

Climate

Changed

advisedtoadjustthe201317and201822

budgetstoreflectastrengthenedlevelof

ambition,whichdidnottakeplace.It

CommissiononClimateChangeis

stronglyconvincedthatarealistictiming

ofgreenhousegasreductionneedsa

moreor

less

carbon

free

power

system

by2030.Carbonintensityofpower

productionshoulddecreasefrom500gCO2/kWhto50in2030,anambition

whichhasbeenacceptedbymostUK

stakeholders.

Theargumentsarethat(1)greenhouse

gasreductioninpowerischeaperand

easiertorealisethaninothersectors;(2)

furtheradvisedtodefinea202327budget

bydomesticactiononlywithoutrelyingon

theuseofinternationalcarboncredits.The

UKGovernmentconfirmedtheCCCproposalforthenontradedsector,butdecidedtomeetthe202327budget

throughdomesticactionasfarasis

practicalandaffordableandtoreviewthebudgetin2014forconsistencywiththeEuropeanEmissiontradingSystem.Ifnot,

itwillbepossibletoalignthebudgetwith

thethen

actual

European

ETS

trajectory

(HMGovernment2011).Thisdecisionoffersmoreflexibility,butlesscertaintyfor

investors.


25/96


largeinvestmentsinelectricityare

neededwhatsoever,soitisbetterto

maketheminacarbonfreeway; and

(3)

one

cannot

wait

too

long

to

achieve

reductionsasayearlyreductionof4

5%after2030arethemaximumthat

maybeexpected(andeventhis

approachassumesayearlyincreasein

reductionsfrom0.8%in19902008,

1.5%in2009 20to4.7%after2030,

whichmainlyhastobeachievedbythe

fruitsofinnovationnow).TheUK

governmentisconvincedthatearly

actionismorecosteffectivethanpathways

which

delay

action

towards

meetingthe2050target.Delayedaction

couldleadtohigheroverallcostsduetolockintocarbonintensivetechnologies

andincreasedpressureonsupplychains

(HMGovernment2011).

AsthemainUKgovernmenttargetisto

attaingreenhousegasreductions,the

exactfuelmixbywhichthishastobe

achievedis

of

secondary

interest.

Expectedcostsarethemaindriverofa

sketchofdifferentpossibilities(CCC

2011a).BoththeCommissionon

ClimateChangeandtheUKgovernmentareconvincedoftherelativecost

advantagesofnuclearenergy:itis

expectedtobebyfartheleastexpensivewayofpowerproductionby

2020,orinotherwordsnuclearis

expectedto

be

the

cheapest

baseload

andmidmeritoptionandgascarbon

captureandstorage(CCS)andunabated

gasplantsarecheapestwithlowerload

factors(inacentralfuelandcarbon

pricescenario),whereasonshorewind

isanattractiveinvestmentoptionin

general(CCC2011a,2011b).They

underlinetheuncertaintiesofespecially

offshorewindcostsandCCS.Apossible

fuelmixmentionedbytheCommission

onClimateChangeinitsmostrecentpublicationis40%nuclear,3045%renewable,15%CCS(bothgasandcoal

based)by2030andtheremainingpart

unabatedgasfiredpeakproduction

(CCC2011b)4

.

To

attain

its

2020

renewable

energy

target,theUnitedKingdomisbacking

especiallyoffshorewind.The

CommissiononClimateChangeisless

certainwhetherthisiscosteffective

andadvisedtomonitorcarefullyto

whichextentoffshorewindcostswill

decreasesufficiently5

.Ifnot,itwouldbe

wisetoinvestmoreinonshorewind,

eveninfaceoflocalopposition.

TheUnited

Kingdom

government

is

concernedthattheexistingelectricity

marketarrangementswillnotbesufficienttorealiseitsambitionofhuge

cleaninvestments.Indeed,theactual

marketsystemwithitsemphasison

coststobeearnedbackintheshort

term,actuallystimulatesinvestmentin

gasfiredpowerduetoitslowupfront

costs:capitalcostsofgasfiredpower

areonly

10%

of

expected

levelised

costs

in2030,against7075%fornuclearand

offshorewind(CCC2011a).Investments

inrenewableenergyarebeingrealised

byseparateincentivesystems,inCCSbyadditionalmoneyfordemonstration

projects,butmostordinary

investmentsareingasfiredpower,whichisconsideredtoberiskyfroma

lowcarbonperspectivegiventechnical

andeconomic

uncertainties

around

gas

CCS.

Intheory,theEuropeanCO2cap,if

sufficientlyrestrictedintime,will

4 CoalCCSwouldnotcomplywiththe

requiredfullsectordecarbonisationby

2050andthereforedemonstrationofcofiringwithbiomassisrecommended.

5 CCCmentionsthatin200710onshore

windcosts

have

risen

20%,

costs

for

gas

firedplants(CCGT)haverisen25%,nuclear

plants40%andoffshorewindwitha

stunning70%.


26/96

guaranteegreenhousegasreduction

andgraduallyleadtoanincreaseinthe

CO2price.However,theUKgovernment

is

convinced

that

additional

instruments

arenecessary.Itconsideredbotha

subsidystrategy(comparablewiththe

actualrenewableenergyapproach)and

ariskreductionstrategyandpreferred

thelatterone.Inariskreduction

strategyinvestorsareofferedcertainty

inadvanceaboutthepriceatwhich

theycansellgivenquantitiesof

electricity,removingtheriskscreatedby

fluctuatingcarbon,gasandelectricityprices

and

demand

uncertainty

thus

reducingthecostofcapitalwhilestill

leavingtheprivatesectorwiththeconstructionandoperationalrisks.

InJuly2011theUKgovernmentsetout

proposalsforapathbreakingElectricity

MarketReform(EMR)(DECC2011).This

EMRconsistsoffourelements.

-Acarbonpricefloorwillbeintroducedfrom

April

2013.

In

the

2011

budget

it

wasannouncedtobearound15.70

Pounds/tonCO2(18),risingto30

Pounds/tonCO2in2020and70in

2030(inreal2009prices).

-FeedinTariffswithContractsforDifferences(FiTCfD)from2014for

lowcarbongeneration.AFiTCfDisa

longtermfinancialcontractproviding

stableandpredictablerevenue

streamsfor

investors

in

low

carbon

electricitygeneration.TheFiTCfDwill

consistofthreepartsandleavesspace

fortechnologyspecificfillingin.Fortintermittent(mainlywindpower)and

baseload(especiallynuclear)powerit

willbe2way,withsupportpayments

tothegeneratorifthemarket

referencepriceisbelowadefined

strikepriceandviceversa.Thestrike

price

for

intermittent

load

will

be

determinedadministratively but

potentiallybytendersfrom2017

onwards.Thereferencepricewillbe

linkedtothedayaheadmarket.For

baseloadthestrikepricewillbe

determinedadministratively or

through

bilateral

negotiations.

The

referencepricewillbelinkedtothe

yearaheadmarket.Forflexiblegeneration(CCS)generatorswill

receiveafixedpayment,coupledwith

arequirementtomakedifference

paymentswhenthemarketreference

priceexceedsadefinedstrikeprice.

Thisstrikepricewillbelinkedtothe

marginalcostsofthegeneration

technology.Muchdetaileddesign

workremains

to

be

done,

like

the

methodologytocalculatemarket

referenceprices,thelevelofvariousstrikepricesandthelengthofthe

contracts.

-ACapacityMechanism.Twooptionsareunderconsideration. Oneisa

strategicreserveinwhichcontractedcapacitywillbecalleduponwhen

economic.Anotheroptionisamarket

mechanismto

conclude

reliability

contractswhichwouldprovide

contractholderswithfixedpayments,

whilstrequiringthemtomake

differencepaymentswhenthemarket

priceexceedsadefinedstrikeprice.

Thegovernmentexpectstotakea

decisionaroundtheturnoftheyear.

Ofcourse,arelationexistsbetween

thecapacitymechanismandtheFiT

CfDthat

has

to

be

investigated

and

decidedon.

-AnEmissionsPerformanceStandard(EPS)tobesetinitiallyat450gCO2/kWhfornewplantsand

significantrefurbishmentsandlife

extensions,exceptCCSdemonstration

plants.Itwillnotberetrospectiveand

issubjecttoregularreviews.The

initialEPSimpliesthatunabatedcoal

fired

power

plants

cannot

be

built

fromthesecondhalfof2013.Inthe

longerterm,theEPCcouldbeusedto

giveaclearregulatorysignalto



27/96


reinforcetheeconomicsignalsas

describedabove.

The

UK

government

expects

that

the

EMRpackagewillbelessexpensivethan

theexistingfinancialincentivefor

renewableenergy.Insteadofrising

averageconsumerbillsbyaround200

Poundsfrom2010to2030without

reform,thiswillbelimitedtoaround

160Pounds(Allen&Overy2011).Manymoredetaileddecisionshaveto

bemade,especiallyaboutthe

potentiallycomplexinteractionsbetween

the

FiT

CfD

and

the

capacity

mechanismandtheinstitutional

arrangementsoftheFiTCfD.ButtheElectricityMarketreformisan

importantandevenfundamentalnew

approachwithahugepotentialto

providetheclarityandcertaintythat

investorsneed.Atfirstsight,itseems

somewhatstrangethattheUnited

KingdominterferesintheEuropean

market,but

due

to

limited

transmission

capacity,thegovernmentconsidersthe

dangerofleakagetotheContinentto

belimitedandasillustratedin

paragraph2.1theexpectedBritishadequacyproblemsarebyfarthe

largestintheNorthwestEuropean

market.NexttotheElectricityMarket

Reform,newgasfiredplantsshouldbe

suitableforretrofitwithCCS.Atthe

sametime,

the

Committee

on

Climate

Changeacknowledgesincreased

interconnection withEuropeis

necessarytoprovidegreatersystem

flexibilityandaddressingpotential

problemswithintermittency.

TheGermanlongtermapproachstarted

witha80%greenhousegasreduction

targetby2050aswell,butlinkedmuchmorewithambitionstostimulate

renewableenergy.Germanyerected

visiblemilestonesofrenewableenergyambitions:30%in2030(50%inthe

powersystem),45%in2040(65%of

power)and60%by2050(80%of

power).Inthiswaythepowersystem

has

to

be

close

to

fully

renewable

by

2050,nexttosomecoalfiredcarbon

captureandstorage(BMWiandBMU2010).

ItissomewhatunclearhowGermany

wantstoattainthesetargets.Ismost

visibleandwellknownpolicy

instrumentisthefeedintarifffor

renewablepower(ErneuerbareEnergie

Gesetz,EEG).Bymeansofthistariff,

Germanyhas

reached

an

increase

in

renewablepowerfrom6.4%in2000to

16.8%in2010(BMU2011).Theendof

nuclearenergycomplicatesmatters.On

theonehand,mostplayersinthe

Germanarenawelcomethedecisionas

implyingalaboratoryfortheacceleratedswitchtorenewableenergy.

Ontheotherhand,itisdifficulttosee

howthenecessaryincreaseof

renewableenergy

production

can

be

implemented.In200010theannual

increaseofrenewableenergyinthefuel

mixhasbeenconstantly1percent.

Nuclearenergytakes23%.Therefore,

theannualincreaseshoulddouble,

regardlessemergingproblemsof

intermittency,spatialplanning,the

adaptationoftheincreaseandthelarge

increaseofcapacity.Further,the

flipsideof

this

impressive

increase

is

the

costburdenofthefeedintariff.Not

onlydidthecostsincreasewiththe

largerproductionofrenewableenergy,

alsotheaveragesubsidy6

to

renewableenergyincreasedconsiderably.

6 Formally,theGermanfeedintariffisno

subsidyastheGermanstatebudgetisnot

involved.Actuallyitfunctionsinthesame

wayas

a

subsidy.

Table3.NominaladditionalcostsofrenewableelectricityinGermany(1)


28/96

Average

remuneration

[c/kWh]

Wholesale

price

[c/kWh]

Total

remuneration

[bln]

Additional

remuneration

[bln]

2000 8.5 1.9 1.2 0.9

2004 9.3 2.8 3.6 2.52008 13.9 6.9 9.0 4.72010 15.4 4.4 12.3 8.3(1)

Onehastodetractthewholesalepricefromtheaverageremunerationtocalculatethe

additionalremuneration.

Source:BMU,EntwurfEEGErfahrungsbericht2011.

Maincauseofthehugeincreaseof

additionalremunerationforrenewable

energy,nexttotheincreased

production,is

the

popularity

of

solar

PV

inGermany.SolarPVdelivers9%of

Germanrenewableelectricitybuttakes

40%ofadditionalcosts.Duetothe

relativelygeneroussubsidylevel

comparedwithstronglydecreasedcosts

ofsolarPVpanels(mainlyimported

fromChina),itbecameveryprofitable

forGermanhouseholdsandfirmstoinstallsolarPV.Bydecreasingthe

subsidyto

levels

which

have

been

announcedbeforehandanddependonthevolumeinstalledinaprecedingyear

(whenmoreisinstalledthanexpected,

thesubsidylevelwilldecreasemore

strongly),theGermangovernment

hopestocontrolthecostexplosion.

ItisunderstandablethattheGerman

governmentstrivesforachangeofthis

nationalsystemintoamoreEuropean

approachby2020(BMWiandBMU

2010).However,tosomeextent,aimsofindustrialpolicyandcostrestriction

arecontradicting.Oneofthemain

argumentsforambitiousrenewable

energytargetsandpolicyistheconvictionthatthiswillstimulate

Germancleanenergytechnology,such

asnationalproductionofwindturbines

andsolarPVequipment.Intheory,it

couldbe

less

expensive

to

attain

Europeanrenewableenergytargetsina

waymoreinlinewithcomparative

advantagesoftheindividualcountries:

itischeapertoproducesolarpowerinItalyorSpainthaninGermany.

However,GermansolarPVcompanies

haveless

close

links

to

Spanish

or

Italian

constructionandinstallationcompanies

thantoGermanones,andGermanywas

afraidamorecommonEuropean

approachwouldnegativelyinfluence

theircompetitiveposition.Ifitwereto

happenthatGermanmoneywill

developmarketsinsouthernItalyand

Spainandweendupimportingour

energy,thenthewholetransformation

wouldntmake

sense

and

it

would

lose

itsbackinginGermany,EnvironmentministerRoettgentoldinJanuary2011

(Germanyscomingcivilenergywar,

EuropeanEnergyReview31January

2011).Apparently,thisfearissomewhatlessforthelongertermandtherefore

Germanybacksamorejointrenewable

energyapproachinthedecadesafter

2020.Thisisalsoduetothehigh

expectedcostsoftheenergytransition.

AlthoughtheGermanMinistryof

Environmentseveraltimesexpectedto

beabletoannounceamaximumlevelof

renewableenergysubsidiesinthenear

future,thescenariostudypublishedin

2010sketchesadifferentpicture.Theaverageadditionalcost(EEGUmlage)

hasalreadyincreasedfrom1c/kWhin

2008to3.5ctpresentlywhichisexpectedtostayuntil2020,decreaseto

2

3

ct

in

the

decades

thereafter

but

increaseagainto45ct/kWh,asthe

expectedvolumeofrenewableenergy

couldincreasefasterthanthecostper



29/96


kWhmightdecrease.Astheadditional

yearlycostswillhavetobepaidfor15

20years,thisfinancialburdenis

impressive.

Other

observers

also

expect

adoublingoftheEEGUmlage.The

scenariosoftheEnergyConcept

expected2030%oftheGermanpower

demandin2050tobeimported

(renewableenergyduetolowercostsin

southernEurope,butalsonuclear

energy)(Prognosetal2010).

Interconnection capacitycouldincrease

2.5fold.

AlreadymorethanadecadeGermanydid

not

accept

new

nuclear

plants.

Its

positiontowardsexistingoneshas

changedfrequently.InSeptember2010thelifetimeofexistingnuclearreactors

hadbeenextendedwith12yearson

average.SinceMay2011the

governmentviewisallnuclearplants,

nexttothosealreadyinmoratoriumyet,

havetoclosein201521.7

AsGermany

isacountrywitharelativelylargeshare

ofcoal

in

its

fuel

mix

and

produces

both

ligniteand(subsidized)hardcoal,itis

understandablethatcoalCCSisan

importantpartoftheGermanlongterm

view.Thecountryhasademonstrationplantrunning.Followingthe2010

scenariostudies,theEthicalCommission

alsoadvisedtheGermangovernmentto

investigatewhetheradditionalmarket

incentivessuchasacapacitymarket

wouldbe

necessary.

It

is

unclear

whetherandwhenthiswillbe

implemented.CurrentlytheGerman

governmentisworkingonanincentive

schemetoprovidelargeadditional

capacityespeciallyforsmalland

mediumsizedusuallymunicipally

owned powercompanies.

ThechairmanoftheEthicalCommission

hadconsideredfourconditionstobe

7 Theeightoldesthavetoclosethisyear,the

otheronesbetweenlate2015andtheendof2021.

fulfilledbeforeproposingthe

Atomausstieg:energypriceswerenot

allowedtoincreaseconsiderably,

greenhouse

gas

emissions

should

not

increase,importswouldnotbe

necessaryandsecurityofsupplyshould

notdeteriorate(RPOnline11April

2011).Itisunclearhowsomeofthese

conditionswillbemet,althoughtheend

ofGermannuclearwillbegradual.The

stabilisationofgreenhousegas

emissionsisrelativelyeasyduetothe

Europeanemissioncap.However,a

scarcityofCO2allowancesbyitselfwillinduce

a

higher

CO2price.Itdependson

supplyanddemandconditionsinNorth

WestEuropetowhichextenttheelectricitypricewillincrease

8and

utilisationofexistingcoalandgasfired

plantswillbeheightened.Duetothe

lengthofplanningproceduresand

investmentdecisions,itisdifficultto

imaginethatscarcitywillnotincrease

andtheonlyoptionthatmaybe

implementedquickly

is

gas.

At

least

in

theveryshorttermelectricityexport

fromtheNetherlandsandFrancehas

increased.Ourimpressionisthatat

least2ofthe4conditionsareverydifficulttomeet,whichunderlinesthe

viewthatGermanyhastakenits

decisiononethicalgrounds.

Denmarkhasastrongtraditionof

securityof

supply

policy.

Already

in

the

1980sitstimulateddistrictheating

networksandwindelectricity.Advised

byaClimateCommissioninSeptember

2010(Klimakommissionen2010),the

8 Theenergyintensiveindustryexpectsan

increaseofwholesalepriceswith30%

untiltheendofthisdecade(FinancialTimes May31,2011).TheGermanresearchinstituteDIWcomputeda

wholesaleprice

increase

of

22%

if

all

nuclearplantswouldend,and6%ifthemoratoriumwouldbekept(KemfertandTraber2011).


30/96


governmentdecidedtomovefrom

coal,oilandgastogreenenergyin

February2011:allenergyhastobe

renewable

by

2050

(Danish

Government

2011).Partofthisambitionisthat60to

80%ofallelectricityhastobepowered

bywind;theremainingpartisbiomass

inCHP.

OneofthehiddensecretsofDenmark

istherealisationofastabilisationof

overallenergydemandalreadyfor

severaldecades.9

Itstrivestocontinue

thistrendwitha6%energydemandreduction

by

2020.

Main

instrument

of

thissystemchangeis,nexttostrong

regulation,anewgraduallyincreasingtaxonfossilfuels,tobespentpartlyon

subsidiesforrenewableenergy.Effect

ofthistaxisexpectedtobebothan

increaseinrenewableenergyand

decreaseoffossilfueldemand,plusa

furtherelectrificationoftheenergy

system(e.g.heatpumpswillbecome

cheaper,biomass

in

district

heating

will

becomecheaper,heatingoilbecomes

moreexpensive).10

Denmarkstrivesfor

9 Animportantquestionishowthiscould

happen.TheEuropeanOdysseeMure

projecthaslookedatenergyefficiencyin

thefourcountries.In19972007the

Netherlandswastheonlycountrywithan

increasingprimaryenergydemand.

Energyintensitydeclinedmostinthe

UnitedKingdom.

However,

energy

efficiencyimprovedmostinthe

Netherlands(1.4%yearly)andGermany

(1.3%),against0.8%intheUnitedKingdomandDenmark(Ademe2009).

Therefore,alargepartoftheDanish

achievementhadbeenduetoasomewhatlowereconomicgrowthandtobehaviouralchanges.

10 TheClimateCommissionsuggestedto

introduceatemporarycompensation

schemeforexistingpowerplantsto

preventan

increase

in

electricity

imports.

Thegovernmentintroducedamore

generaltaxreductionforenergyintensive

industry.

afurtherintegrationofthenorthern

Europeanelectricitymarket,especially

withNorwegianhydropower.

AtthismomenttheNetherlandsdoes

nothavealongtermapproachinitsenergypolicy.Thisispartlyduetoits

emphasisoncostreductions,butalsoto

astrongdecouplingofenergyand

climatepolicies.WhereasDenmarkand

theUnitedKingdomhaveajoint

ministryofenergyandclimatechange,

andGermanyhasoneministry

responsibleforbothrenewableenergy

andclimate

policies 11.

The

Netherlands

governmentisoftheopinionthat

energyandclimateambitionsandpoliciesareseparateissues.Therefore,

itsrecentenergyWhitePaper(ELI2011)

didnotdealwiththeperiodafter2020.

Alongtermapproachmaypossiblybe

expectedintheClimate2050roadmap,

tobepublishedbytheministryof

InfrastructureandEnvironmentin

Autumn2011.

In

the

meantime,

the

Netherlandstraditionofenergy

transitionhasshiftedtoenergy

innovation.Transitionteamsofelectric

vehiclesandgreengasbotharesupposedtohavecomparative

advantagesintheNetherlandsarestill

ontrack.

TheNetherlandsperceivesitselfmore

thanits

neighbors

as

a

part

of

the

NorthwestEuropeanenergysystem.It

allowedinvestmentsincoalfiredplants

duetoitscomparativeadvantageatsea

intheexpectationthatolderplants

wouldbeclosedandinvestmentsinCCS

wouldbefeasible.Itstrivesfor

investmentinnuclearasitisexpected

thatthiswillremainpartoftheNorth

11 TheGermanministriesofEnvironment

(renewableenergy,climate,nuclearsafety)andofEconomicAffairs(energy

policyingeneral)oftenhavedifficultyin

findingcommonground.


31/96


WestEuropeanfuelmix.However,itis

strugglingwithrenewableenergyasthe

Dutchgovernmenthasinstalledastrict

financial

cap

on

the

amount

of

subsidy

tobespentinthenextyearsandhopes

asystemofobligations(onbiomassin

coalfiredplants,possiblytobe

extendedtolowcostoptionsingeneral)

could

be

a

useful

addition.

Topdownorbottomup,industrialopportunities,strengthsand

weaknessesoftheapproaches

Beforewemovetotherelative

strengthsandweaknessesofthese

approaches,aremarkhastobemade

ontheoverallapproachandpolitical

settingsinthefourcountries.

TheUnitedKingdomhasacleartopdown,relativelytechnocraticapproach.

Thetransitionislegallydrivenandall

threemajorpartiesagreewiththis.TheCommissiononClimateChangeis

chairedbyaformerchairmanofthe

employersorganisation,which

stimulatesinclusionofthebusiness

community.Costsandtheeconomic

frameworkof

the

electricity

system

are

importantissuestobeconsidered.

Peopleorcitizensdonotappearin

thepapers.

TheoppositeisthecaseinGermany.TheEthicalCommissionexplicitlyspeaks

aboutcivilengagementasamain

driverofchangeandpleasstronglyinfavouroffurtherdecentralisationto

localgovernments

and

cooperative

ownershipofrenewableenergy.Atthe

sametime,however,NIMBYopposition

tomoreonshorewindandespecially

transmissionlinesisrelativelystrongin

Germany.Atleastthreeofthefour

mainpoliticalpartiesagreewiththe

mainaspectsoftheenergytransition

(therulingChristianDemocrats,Social

DemocratsandtheGreenPartythe

ruling

Liberal

party

is

more

hesitant

and

hadtobeconvincedtoendnuclear

energyby2021/22).

Somewhatcomparableisthecasein

Denmark.Itslongtermpolicyhasbeen

preparedindependentlyfromthe

government,andthegovernment

carefullytriedtoincludeallmain

politicalpartiesinitsapproach(theactualSocialDemocraticopposition

partyisalongtimeproponentof

renewableenergy).Decentralisation

andinclusionofcitiesandcooperativeownershipareimportantaspectsofthe

Danishapproach.

AstheNetherlandsdoesnothavea

longtermpolicyyet,itismoredifficult

toobserve

underlying

tendencies.

The

Netherlandsprobablyhasastronger

divisionbetweenpartiesstrivingfor

furtherclimatepolicies,butoftenatthe

sametimeagainstnewnuclearreactors

(SocialDemocrats,GreenParty)and

thosestronglyopposedagainstmore

activeclimatepolicybutinfavourof

newnuclear(thenewantiimmigration

party,butalsotosomeextenttheruling

Liberaland

Christian

Democratic

parties).Anewtrendisanemerging

localapproach.Citie

Documents

Energy: Inspiration for the future