Low-carbon gas transition

The Netherlands sees flexible and interconnected energy systems as essential to achieving a cost-effective transition to a low-carbon economy. Implementation of the 2019 Climate Agreement measures would result in at least 70% of electricity generation coming from renewables (mainly variable wind and PV) by 2030. 9 million vehicles powered by electricity or low-carbon hydrogen, broad electrification of heating and industrial processes, and large-scale production and use of low-carbon gases. This represents a major transition from the current energy system. In 2018, only 16.5% of electricity came from renewables, the level of electrification was low in most sectors and low-carbon gases met only 0.4% of energy demand.

To address these transformative challenges, the government is supporting the development of a digitalised energy system that enables high shares of variable renewable generation, broad electrification of end-uses, co-ordination between networks for electricity and low-carbon gases, and innovative new energy services. The new Energy Law planned for 2022 aims to support demand-side response (DSR), energy services and aggregators, and other measures to create more flexible and efficient energy systems and markets. To lay the foundation for flexible energy systems, the Netherlands is aiming for 80% of households to have a s. The Netherlands is also supporting the development of a , around 1 million households had installed systems allowing them to manage their electricity consumption.

Steps towards flexible energy systems are being taking in many areas. Electricity system operators are co-operating with research centres to determine how smart charging can limit the impact of EVs on the electricity grid and how EVs can act as resources. System operators are also conducting pilot projects showing that distributed resources such as renewable generation, energy storage and DSR can support more efficient grid operations, for example, by providing ancillary services. The Hydrogen Strategy aims to support flexible energy systems by developing hydrogen production, transport and storage to support the integration of variable renewables and seasonal energy storage. To ensure continued progress towards flexible energy systems, the government needs to develop a clear approach to energy sector data, including data ownership and how data can be easily accessed while addressing issues of privacy and cybersecurity.

Flexible energy systems

In support of the transition to a low-carbon economy, the Netherlands conducted a review of fossil fuels subsidies (FFS), jointly led by the Ministry of Economic Affairs and Climate Policy and the Ministry of Finance. At the request of the government, the Organisation for Economic Co-operation and Development (OECD) and the IEA facilitated the FFS review as part of this IEA review of Dutch energy policies. The report was delivered to the government in and will be used to inform the government response to questions from parliament concerning FFS and the potential need for energy policy, subsidy and tax reforms.

Fossil fuel subsidy review

• Monitor potential security of supply issues resulting from the mid-2022 closure of the Groningen gas field and growing dependence on natural gas imports, with a focus on reducing demand, decarbonising the gas supply and repurposing gas infrastructure.
• Ensure that energy policy supports strong deployment of digitalisation in all sectors and develop clear regulations on energy sector data, supporting transparency and easy access, while also addressing issues of privacy and cybersecurity.
• Ensure that the 2019 Climate Agreement GHG emissions reduction measures support cost-effective achievement of EU requirements, including targets for renewable energy and energy efficiency.
• Support early-stage deployment of emerging technologies that have the potential for cost-effective emissions reductions, to stimulate mobilisation of private funds and bridge the gap from demonstration to large-scale commercial deployment.
• Revise the regulatory framework for electricity markets to provide room for inent of an electricity system that can safely integrate increasing shares of variable renewable generation and support smart grid solutions.