Boosting the Dutch energy transition
With much of the territory being below sea level, the Netherlands has good reason to be taking the battle against climate change seriously. Aside from investing in an ever greater system of dams and dykes, the Dutch government has set an ambitious target to cut national CO2 emissions by around half by 2030 (compared to 1990 levels). This will help to ensure a sustainable future for the Dutch population.
In the wider context of reducing the carbon footprint of the power sector, the Dutch Ministry of Economic Affairs and Climate Policy asked Frontier Economics to analyse potential effects of a coal phase-out and the introduction of a carbon price floor for electricity production. The results of which can be found in two comprehensive studies (2016 and 2018).
Modelling for policy-makers
We have further supported policy-makers in Central-Western Europe and the Netherlands, with our detailed power market modelling. Our results have enabled policy-makers to gain a better understanding of the impact of both policy instruments compared to a ‘business as usual’ reference case absent any political intervention. In our analysis, we paid particular attention to the effects on:
- Power prices;
- Electricity supply structure;
- Security of supply and import reliance; and
- Profitability of power-plants.
Shaping the green transition
The Dutch Government, led by a proposal from the Ministry of Economic Affairs and Climate Policy guided by our analysis, has recently put policy measures into practice. As part of the Dutch Climate Agreement, the parliament agreed on the phase-out of coal-fired electricity generation by no later than 2025/2030 with the first plant closing at the end of 2019. Moreover – to further accelerate the Dutch energy transition and to cut carbon emissions in the short-term – the Dutch government is currently consulting on a proposed bill on limiting the CO2 emissions of coal-fired power stations by as much as 65-75% compared to normal operations for the years 2021-2023.