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Sustainable energy system

Energy market

End consumers

Renewable sources

Positions renewable energy

Position Biomass

Bio-based materials are needed for the transition to a climate-neutral, circular and bio-based economy. It goes without saying they must meet the agreed sustainability requirements. In this area, Energie-Nederland shares the conclusions of independent report, including that of the IPCC (March 2023), PBL (Dec. 2020), SER (July 2020) and PBL (May 2020). These reports argue that bio-based materials are needed to achieve our climate goals and that they serve as catalysts for a circular economy.

There are applications for carbon-free adjustable output electricity generation in the energy system. Its importance is growing, due to the strong increase of weather-dependent generation from solar and wind. There are also applications for sustainable heat, for which biomass is currently the only realistic, scalable, and affordable source. And bio-energy is a crucial step in the transition to renewable raw materials in the chemical industry and construction, among others. What’s more, biomass can be used to achieve negative emissions. Like the IPCC, the Energy through Perspective report (April 2023) by the Energy System 2050 Expert Team emphasizes the importance of negative emissions, including through biomass. Negative emissions can be achieved, for example, through large-scale tree planting and the use of sustainable biomass.

Energie-Nederland understands that the use of sustainable biomass for energy applications elicits much discussion in society. Policymakers are rightly setting stringent, legal requirements for the sustainability of biomass for energy applications. The Dutch sustainability requirements are among the strictest in the world. The guarantee that biomass used actually meets these requirements is allocated through certificates. These certificates are approved by the government and verified by the accredited independent experts. For the electricity sector, additional agreements have been established for the period 2015-2027. This was done in the Biomass Sustainability Covenant between the energy sector and five NGOs – Greenpeace, Natuur & Milieu, Milieudefensie, WWF, Natuur en Milieufederaties. The agreements are monitored annually by an independent auditor, who is appointed by the covenant parties. This is the most recent report: Annual Report 2021.

Position Hydrogen

Green and blue hydrogens offer a solution to address the climate crisis and reduce dependence on Russia. 

Hydrogen can be made from renewable electricity generation. This ensures we can inject a large volume of extra solar and wind in our system. What’s more, low-carbon hydrogen can help meet our large demand for hydrogen in a sustainable manner. Blue hydrogen is made with gas from which the carbon is captured. Imports of sustainable hydrogen may also make a significant contribution.

Energie-Nederland sees roles for sustainable hydrogen that include:  

  • raw material for carbon-neutral industry; required no later than 2030 due to European obligations.
  • fuel for carbon-free gas power plants; required no later than 2030 due to our own ambitions.
  • Preventing net congestion; If all electricity from wind at sea is fed into the electricity grid at peak moments of energy production, this can lead to a network overload. By transforming this electricity directly into hydrogen before it reaches the grid, we can avoid substantial extra investment in the electricity grid.

 

To achieve our ambitions for 2030 and 2050, major steps still need to be taken before 2030. 

Energie-Nederland would like to see: 

  1. for hydrogen production a Dutch objective of 80 petajoules by 2030 (6 to 8 gigawatts). Along with sufficient incentivizing tools to work towards this. This could be done, for example, by issuing tenders as early as next year that are similar to the offshore tenders. This would mean developers can quickly have certainty about the development path. Offshore hydrogen can also contribute to the goals as early as 2030, something that will only succeed if we make a start on pilots now. If we want to switch to carbon-neutral electricity generation as soon as possible, it is necessary to start using blue and green hydrogen in gas power plants before 2030.
  2. for hydrogen imports an objective of – for instance – 30 petajoules and a sufficiently solid policy to achieve this. This would require the entire international hydrogen chain to be built. The only way to do this is to offer early assurances on sales and business cases.
  3. for hydrogen infrastructure (see 4.4 Hydrogen infrastructure).

Position Green gas

Green gas could play a huge role in making our gas consumption more sustainable. It could also make our built environment more sustainable in a low-threshold way. 

One important incentive for the development and use of green gas is mandatory blending (BMV) that was announced. This is also included in the Coalition Agreement 2021-2025. This talks about a commitment of 20% green gas (1.6 billion cubic meters (bcm)) in the built environment by 2030. The starting level in 2025 is 0.15 bcm and will increase over 5 years. Several bottlenecks remain here.

The Ministry of Economic Affairs and Climate Policy (EZK) is vigorously working on legislation for the BMV in 2022/2023. The production of green gas must be significantly scaled up, while many technologies are not yet mature enough. What’s more,  insufficient raw materials are available as yet. In addition, there is a high likelihood of competition from neighboring countries who are also setting up systems for green gas. Finally, pressure on the availability of certificates is expected, because of the alternative use of  renewable fuel units (RFUs) in the mobility market, among others.

Energie-Nederland supports the government’s ambitions for scaling up production as soon as possible. Conditions for the BMV to work include:

  1. Innovation subsidies for gasification, broader SDE++ (sustainable energy production incentive scheme) for fermentation, availability of raw materials, and having the necessary infrastructure in place (see 4.5 Green gas infrastructure).
  2. Mandatory blending itself should mostly contribute to the production of green gas in the Netherlands. In order to prevent a paper reality, it is necessary to fend off administrative impor
  3. The 1.6 bcm ambition seems ambitious, given the results of the CE Delft report (July 2022) and CE Delft’s follow up report at the end of April 2023. Several points need clarification. Among others, the actual ambition, the possibility to pass on costs to customers, and the penalty system if a supplier does not meet its obligations. This is extra relevant if the ambition proves not to achievable. Due to physical shortages of appropriate bio-based materials, for example, or a lack of timely permits.
  4. How to manage the demand for biofuels from the mobility sector. This demand could possibly reinforce green gas scarcity and drive up prices for consumers.
  5. It is to be expected that many new green gas production sites will emerge. For example, through manure fermentation. This includes many relatively small sites. All these new production sites must be connected to the existing gas infrastructure in a timely manner, so that they can feed in. At the very least, this requires collaboration with local governments, EBN and the Union of Waterboards. Furthermore, permits should be issued more quickly.

Trade association of almost 90% of the market for producers, suppliers and traders of electricity, gas and heat.

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