The Future of Energy in the Netherlands

What expectations do you have for this year’s COP26 in Glasgow?

Prof. Ad van Wijk: My expectations are not too high, it will likely be a supplement to the Paris Agreement. However, discussions will likely be more constructive for two main reasons: the US is now back in the game and the sense of urgency that was recently created by the latest IPCC report on climate change. Nonetheless, the solutions we need are most likely not to be found within the IPCC, mainly due to the fact that the IPCC’s scientific process tends to be slow at spotting and therefore incorporating the latest technological developments. This can be explained by the gradual and time-consuming process of publishing a scientific article: it takes about a year to publish, and the IPCC process adds – in the best case scenario – another year.

These insights into the technological developments are crucial as they inform policy makers on the direction in which the energy transition is unfolding. For instance, throughout the last two years we have seen enormous developments in hydrogen, a solution that is currently not sufficiently recognised by the IPCC. The electricity dogma clearly still prevails. Therefore, when the next IPCC report presenting the solutions gets published early next year, we should critically read it and cross compare it with the most recent innovative solutions set forth by business and industry.

Prof. Gert Jan Kramer: I would agree that the peer-reviewed literature is not the best source for obtaining the latest insights into the transformation of our energy system. Thinktanks, government reports and consultants are often much better at that. However, the IPCC has a very important role to play in finding scientific consensus on climate change and has provided the required urgency to tackle the problem. To reflect on the COP process, the 2008 Shell Blueprints scenario comes to mind. It underscored that achieving global, top-down governance of climate change would not come about easily. Rather, it proposed that local, national and regional initiatives would be the main driving force, which would ultimately come under a global umbrella. This explains why the top-down approach tried at the Copenhagen COP failed and why the voluntary national contributions approach of Paris did work. As we continue on this path of progress, now towards Glasgow, let’s hope that countries keep being encouraged to hold each other accountable on the actions they’ve made promises on.

What is your view on the role of the Netherlands in the energy transition?

Prof. Gert Jan Kramer: The Dutch government has the obligation to further stimulate the energy transition. The reality is that the European Emissions Trading System (ETS) has proven to be an insufficiently powerful instrument and therefore you see countries create their own additional instruments. If you look at what the industry now needs, it’s electrification and Carbon Capture and Storage (CCS). The ETS-price is currently insufficient to support CCS-projects and therefore they require subsidies.

Prof. Ad van Wijk: European policy only works when you enable industry to decarbonize, for example by providing the required infrastructure. That is in my view an important role for the Dutch government. This would mean building the hydrogen infrastructure that would enable Tata Steel to start using hydrogen, and encouraging projects such as NortH2 – a large hydrogen project planned North of the Wadden-islands – to produce the required hydrogen. This will enable and completely shape a new industry, e.g. by creating green steel, produced from hydrogen, which can be used to build the required new offshore wind turbines. The key lies in finding the right combination between accelerating the energy transition and making the existing (Dutch) industry increasingly sustainable.

In light of the required energy transition, how do you look at the continued natural gas production in the Netherlands?

Prof. Ad van Wijk: In my view, we should add an obligation on new natural gas production that allows for production only if it is converted to hydrogen with CCS. But that should also hold true for new gas production in other countries, e.g. in Israel, Cyprus, Türkiye, and Egypt.

Prof. Gert Jan Kramer: Of course, we are restricting production because of the earthquake issues in Groningen. However, if and when earthquakes are not an issue, I cannot see why natural gas imports should be preferred over continued national production.

What role do you see for hydrogen in the energy transition in the Netherlands?

Prof. Gert Jan Kramer: Besides CCS and electrification, hydrogen will be one of the levers to decarbonize the industry in the Netherlands. If you look at the current CCS-projects in the Netherlands, such as Porthos, many of those are de facto blue hydrogen projects. These projects will significantly contribute to efforts that limit the Dutch industry’s total emissions. In my opinion, green hydrogen will only play a large role after 2030. Although Prof. Ad van Wijk might disagree.

Prof. Ad van Wijk: The government has the ambition to have 3 to 4 GW installed in the Netherlands. I think that is a conservative ambition. Therefore, we should really push on the development of offshore wind to create enough green electricity. At some point it will become economically attractive to convert offshore electricity to hydrogen and transport it via pipelines to shore. That would consequently require re-thinking the current offshore gas-grid set-up. There are many existing pipelines, but they are privately owned. Negotiated third-party access or public ownership should therefore be considered. Eventually it makes a lot of sense to ‘’merge’’ TenneT and Gasunie to find the best solution to transport energy across the country and offshore, just like electricity and gas are provided by local net operators such as Stedin, Enexis and Alliander.

What do you expect from hydrogen import?

Prof. Ad van Wijk: Import will play an important role to provide the hydrogen required by the industry. The pipelines that are already in place for the transport of gas need to be repurposed for the transport of hydrogen, but this will require time. The first import of, for example, ammonia will most-likely take place by ship. Eventually, once a mature system is in place, hydrogen will be predominantly transported via pipelines whereas transport via ship will be flexible and respond to market prices. Especially in the earlier stages, Dutch ports will therefore play a crucial role. Just like the Netherlands has become the trading hub for natural gas in Europe, we should make optimal use of the circumstances we have that would enable the Netherlands to become the trading hub for hydrogen. Our excellent storage possibilities, such as underground salt caverns, offer a truly unique opportunity.

Prof. Gert Jan Kramer: I think importing hydrogen by ship will be more difficult and costly than many appear to think. Transporting hydrogen, especially via ships, will remain expensive, also in the long term. Nonetheless, I agree with prof. Ad van Wijk: with our offshore wind potential, we have access to great resources and opportunities right here at home. These are the resources that we should leverage.