The Netherlands 534 the Netherlands the Netherlands
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THE NETHERLANDS 534 THE NETHERLANDS THE NETHERLANDS 1. GENERAL INFORMATION 1.1. General Overview The Netherlands is a small, flat country in north-west Europe situated on the North Sea shore with a maritime climate. The country is densely inhabited and the population growth is nearly constant. In 1998, the Netherlands had a population of 15.6 million with the population density of 462 inhabitants per square kilometre. Its growth rate was estimated at 0.6 % (Table 1). The Netherlands is the ‘Gateway to Europe’ for trade and distribution, with harbours in Rotterdam and Amsterdam. TABLE 1. POPULATION INFORMATION Growth rate (%) 1980 1960 1970 1980 1990 1996 1997 1998 to 1998 Population (millions) 11.5 13.0 14.1 15.0 15.5 15.5 15.6 0.6 Population density (inhabitants/km²) 352 384 415 439 416 459 462 0.6 Urban population as percent of total 31 54 52 51 61 61 62 1.0 Predicted population growth rate (%) 1998 to 2000 0.5 Area (1000 km²) 33.9 Source: IAEA Energy and Economic Database; Country Information. 1.2. Economic Indicators In 1997, Netherlands’ Total Gross Production was 1.267 billion guilders, of which 362 billion guilders produced by industry. Gross Domestic Product amounted to 709 billion guilders, while domestic consumption was 516 billion guilders and total domestic investments amounted to 142 billion guilders. Gross domestic growth rate was 3.5%. The historical growth rates are shown below. TABLE 2. GROSS DOMESTIC PRODUCT (GDP) Growth Rate (%) 1980 1970 1980 1990 1996 1997 1998 to 1998 GDP (millions of current US$) 49,065 159,555 242,278 315,375 335,607 367,780 4.8 GDP (millions of constant 1990 56,896 185,022 281,532 365,714 389,175 426,483 4.8 US$) GDP per capita (current 3,774 11,316 16,151 20,216 21,513 23,575 4.2 US$/capita) GDP by sector (%) : Agriculture 7.4 3.4 4.4 3.2 3.2 N/A - Industry 36.4 17.9 19.4 17.7 17.9 N/A - Services 20.0 39.2 45.0 49.2 49.5 N/A - Construction and Utilities 9.6 7.0 5.9 5.5 5.6 N/A - Source: IAEA Energy and Economic Data Base; Country Information. THE NETHERLANDS 535 1.3. Energy Situation After the former USSR, the USA and Canada, the Netherlands is the world’s fourth biggest producer of natural gas. The importance of energy in the Netherlands emerges from the possession of an important energy resource: natural gas (Table 3). Total energy consumption in the Netherlands consists of natural gas (49,4%), oil (34.8%), coal (12,2%), and nuclear energy(1,4%) and renewable energy resources (3%). The country’s primary energy production has increased from 14 Mtoe in 1950 to the current level of 74.84 Mtoe. In 1998 the primary energy supply (TPES) is for coal 12,%, gas 26.6%. Table 4 shows the historical energy situation. Electricity constitutes 12.3% (88.4 TWh) of the total domestic energy consumption public grid). In recent years, electricity demand has grown at a rate of 3 to 4% per year. TABLE 3. ENERGY RESERVES Exajoule Estimated energy reserves in 1993 Solid Liquid Gas Uranium (1) Hydro (2) Total Total amount in place 14.56 0.67 65.93 - 0.07 81.23 Estimated energy reserves in 1996 Total amount in place 14.56 0.63 62.13 - 0.10 77.42 Estimated energy reserves in 1998 Total amount in place 14.56 1.1 67.6 - 0.10 83.26 (1) This total represents essentially recoverable reserves. (2) For comparison purposes a rough attempt is made to convert hydro capacity to energy by multiplying the gross theoretical annual capability (World Energy Council - 1996) by a factor of 10. Source: IAEA Energy and Economic Data Base; Country Information. 1.4. Energy Policy Since gas and oil make up a very large share of the energy supplies in the Netherlands, the country’s energy policy is aimed at decreasing the long-term oil and gas dependence to more acceptable levels. Coal, gas, oil, nuclear and wind sources have their own potentials and limitations. Selecting the best energy package is one of the major challenges of Netherlands’s energy policy. One of the tasks of this policy is to ensure that future generations will also be able to meet their energy requirements. Creating the conditions for an affordable, reliable and clean energy supply, today and tomorrow, is regarded as the key objective of Dutch energy policy. As a result, its main elements are: encouragement of energy conservation; diversification of primary fuels in order to minimize price and supply risks; and, development of domestic energy resources. In 1995, the government has prepared an “Energy white paper”, which was presented to Parliament at the year-end. This white paper outlines what steps should be taken towards a more sustainable energy economy which is needed on the one hand in order to secure a reliable long-term energy supply and on the other hand in order to respond to the threatening climate problem. The document focuses on energy conservation, renewable energy and the liberalization of the energy market. A prominent aspect of the energy conservation policy is the individual responsibility of the different target groups: companies, individuals and public authorities. Most instruments are tailored to a specific target group. These instruments consist of agreements, tax breaks, levies and subsidies. A central feature of the approach towards industry are the so-called long-term agreements. In these agreements, trade associations or individual companies agree to implement measures to increase the 536 THE NETHERLANDS efficiency of their energy consumption. In return for their efforts they receive financial support from the Ministry of Economic Affairs. In this way, the government encourages investment in energy conservation. TABLE 4. ENERGY STATISTICS Exajoule Average annual growth rate (%) 1960 1980 1960 1970 1980 1990 1997 1998 to to 1980 1998 Energy consumption - Total(1) 0.91 2.02 2.92 2.96 3.03 3.03 6.0 0.2 - Solids(2) 0.45 0.21 0.16 0.45 0.38 0.38 -5.1 4.9 - Liquids 0.45 1.10 1.12 0.96 1.03 1.03 4.7 -0.5 - Gases 0.01 0.72 1.61 1.43 1.48 1.47 27.2 -0.5 - Primary electricity(3) N/A N/A 0.04 0.12 0.13 0.14 19.1 7.2 Energy production - Total 0.46 1.33 3.51 2.74 2.75 2.77 10.7 -1.3 - Solids 0.37 0.13 - - - Liquids 0.08 0.08 0.07 0.17 0.13 0.12 -0.9 3.0 - Gases 0.01 1.12 3.40 2.54 2.54 2.42 32.0 -1.9 - Primary electricity(3)) N/A N/A 0.04 0.03 0.08 0.08 - 3.9 Net import (import - export) - Total 0.57 1.20 -0.09 0.62 0.95 1.01 8.6 - Solids 0.07 0.07 0.16 0.43 0.44 0.36 4.2 4.6 - Liquids 0.50 1.53 1.54 1.30 1.57 1.60 5.8 0.2 - Gases N/A -0.40 -1.79 -1.11 -1.06 -0.95 - 3.5 (1) Energy consumption = Primary energy consumption + Net import (Import - Export) of secundary energy. (2) Solid fuels include coal, lignite and commercial wood. (3) Primary electricity = Hydro + Geothermal + Nuclear + Wind. Source: IAEA Energy and Economic Data Base. Renewable sources of energy (for example: wind, sun, hydro and biomass) do not depend on finite stocks. The use and further development of renewable energy is encouraged in order to reduce harmful emissions and to reduce the demand for non-renewable fuels. By the year 2020 the share of renewables in total primary energy consumption should be 10% (which is 1% now). However, renewable energy is still not competitive with energy based on fossil fuels. Therefore the government, through financial incentives, is making the use of renewable energy more attractive. Finally the white paper reflects the importance of more competition in the energy markets. At the moment the liberalization of both the electricity and the gasmarket is one of the main objectives of Dutch energy policy. The electricity market liberalization is in an advanced stage of progress (see below, par 2). For the gas market liberalization a new law has been introduced in Parliament in the course of April 1999. 2. ELECTRICITY SECTOR 2.1. Structure of the electricity sector Under the Electricity Act of 1989 the structure of the electricity supply sector was characterized by a separation of distribution and supply. The Act included rules for the production, THE NETHERLANDS 537 transmission and distribution of electricity. Generally, production and distribution were each carried out by separate companies rather than by vertically integrated companies. The Act also included rules for the production of electricity by private firms and persons, who had the right to sell their excess capacity to the distribution companies at average avoided costs. Planning and production in the electricity sector was co-ordinated by a central body, the N.V. Samenwerkende Elektriciteits-Productiebedrijven (Sep), which drew up planning schemes. A typical scheme covered the next ten years of production, based on demand forecasts. The four electricity production companies (EPON, EPZ, EZH and UNA) in turn, implemented the decisions of the planning schemes. Every two years a new scheme was drawn up by Sep in co-operation with the before mentioned production companies and the distribution sector for final approval by the Ministry of Economic Affairs.