This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 10/24/2018

Overview
 

The Dutch power sector is unbundled, with a transmission system operator (TSO), eight Distribution Service Operators (DSO), over 25 producers, and 35 electricity retailers.  Dutch law requires ownership unbundling for both transmission and distribution.  There are more than 8 million connections in the Netherlands, with a total current demand of some 118.6 TWh.  A few large companies dominate distribution, production, and supply.
 
The Netherlands’ energy industry benefits from its unique location.  The northern part of the country is rich in natural gas and most Dutch power plants are consequently run by gas.  The Dutch market is currently defined by fossil fuels in terms of power generation.
 
Only six percent of energy comes from renewable sources.  This is partly due to the absence of large-scale hydro generation, solar usage, and onshore wind (due to population density). Most renewable energy is derived from biomass.
 
The Dutch electricity system is dominated by fossil fuel capacity – primarily natural gas and coal – which accounts for approximately 31.25 GW.  Renewable energy comes mainly from biofuels.  Solar, hydro, and nuclear energy play a minor role in renewable resource generation. Wind power has experienced the fastest growth over the years, growing from 0.8 TWh to 7.6 TWh in 2015.

Nuclear

Nuclear energy accounts for ten percent of electricity used in the Netherlands.  There is currently one operational nuclear power plant in the country, Borssele.  It has an annual output of about 4 billion kWh, which provides enough electricity to power more than a million homes. The government has no plans to build more nuclear power plants.

Oil & Gas Industry

The government has decided to no longer pursue gas extraction from the Groningen field, one of the world’s largest natural gas reserves.  Over the next four to five years, the extraction rate will be halved and by 2030, it will come to a complete halt.  As gas currently powers 90 percent of Dutch households, the government plans to build a nitrogen plant to convert imported gas into fuel, resulting in a 7 billion cubic meter cut in demand for Groningen gas. 

Renewable Energy

In 2016, renewable energy sources accounted for 5.9 percent of total Dutch energy consumption.  This was only slightly higher than the 2015 equivalent due to a rise in wind and solar energy, but a decrease in biomass energy.  This resulted in limited consumption of renewable energy.  Vattenfall, a power provider in the Netherlands, has invested in the replacement and expansion of the onshore wind farm, Wieringermeer.  Despite an increase in renewable energy, the Netherlands is unlikely to reach its 2020 target of 14 percent for renewable energy.  
 
In 2017, the use of renewables increased significantly.  Three million solar panels were installed, which increased solar energy total capacity by 60 percent to 2,902 MWp.  As a result of the new Gemini offshore wind farm, wind generation rose by 30 percent from 7.9 TWh in 2016 to 10.9 TWh in 2017.  Large new wind farm projects in the North Sea will significantly increase wind-generated power in the coming years.

Biofuels

The Netherlands is implementing the EU Directive on biofuels by gradually increasing the proportion of energy from renewable sources such as biofuels, biogas, and electricity for road transport.  The aim is to build confidence that biofuels are a viable energy source and to move gradually towards the EU target of a 10 percent share of biofuels by 2020 in the transport sector.

Onshore Wind

Roughly 9.6 percent of the average annual electricity demand is provided by wind energy.  By the end of 2015, approximately 2,525 onshore wind turbines generated 3,000 MW of electricity. This was only five percent of the Netherlands’ total requirement.  By 2020, the Netherlands needs to have an onshore wind capacity of 6,000 MW.  This means an increase of upwards of 3,000 MW, equivalent to 1,000-1,500 new onshore wind turbines.

Offshore Wind

The Netherlands issued its first subsidy-free tender at the end of 2017 in hopes of capitalizing on the already booming renewable energy sector.  Companies that could fund the project themselves could participate to keep costs low during the transition to more renewable energy.  Chinook, a subsidiary of Nuon, has been selected to construct and operate the wind farm at Sites I and II of the Hollandse Kust (zuid).  This wind farm will be built in the North Sea and will provide one million households with sustainable energy.  Currently, there are six offshore wind farms off the coast of the Netherlands: Egmond aan Zee (108 MW), Eneco Lucterduinen (129 MW), Windpark Friesland (320 MW – to be built by 2021), Gemini (600 MW), Irene Vorrink (17 MW), Lely (2 MW), and Princess Amalia (120 MW).

Solar energy

Solar energy has gained popularity over the past couple of years.  The government has plans to build an offshore solar power farm.  This farm is expected to be up and running by approximately 2021 and will provide energy to the Dutch mainland.  A pilot test will be conducted in summer 2018 nine miles off the coast of The Hague.  The panels will be connected to the already existing wind turbines in the North Sea, which will make transporting energy easier.  In 2017, the Netherlands added 853 MW worth of solar power systems.

 Overview of the Dutch Power Generation Market

Generation

2016

Gross Generation (TWh)

114.9

Of which gas

46%

Of which coal

35%

Of which wind

7%

Of which biomass/gas

6%

Of which nuclear

3%

Other generation

3%

Final Consumption (TWh)

 


Source: International Energy Agency, CBS, & CIA Factbook
 

  

Consumption in Petajoules2000201520202035
Oil1173117312121253
Natural gas151711911040885
Coal325516326292
Renewables52136276491
Miscellaneous72889235
Net electricity imports65 (import)40 (import)75 (import)74 (export)
Total3204314430202882



 
Transmission/Distribution network2011
Delivery Points8 million
Length of grid1,700 miles
Electrical Substations (high voltage)51

Source: ECN Dutch National Energy Outlook
 

Leading-Sub-Sectors
Smart Grid:

The Dutch Government is accelerating the development of smart grids with its Intelligent Grids Innovation Program which supports 94 pilot projects.  The Dutch Ministry of Economic Affairs produced a report listing all stakeholders in the Dutch smart grid sector.  The report is available on request from:  alan.ras@trade.gov.

Infrastructure:

The electricity infrastructure requires major investments.  Many existing grids will need to be replaced as their technical life expires and advances in technology warrant adaptation.  Because of market integration, cross-border electricity flows are increasing, which require additional interconnection capacity.  The increase in sustainable and/or decentralized electricity production, the rise of hybrid and electric cars, and the development of energy storage systems also require major adjustments and expansion of the existing network.  Large-scale capture, transport, and storage of CO2 will require an entirely new infrastructure to be developed.  This also applies to the use of the various energy options of the North Sea.  This will require major investments in the short to medium term.

Opportunities

A list of 25 Dutch grid infrastructure upgrade projects can be found on the Tennet website.
 
Web Resources

Market Analyses:      
2016 Top Markets Report – Renewable Energy
Energy Market Resource Guide 2017
National Energy Outlook 2016
European Utility Week website
 
SME Resources:                     
Posted on the website of the Global Energy Team.
 
Contact:                     
Alan Ras, Commercial Specialist                             
U.S. Commercial Service – The Netherlands
Alan.ras@trade.gov | +31 70 310 2418

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Netherlands Energy Trade Development and Promotion