Energy Energy opportunities in the opportunities in the

NetherlandsNetherlandsEuropean Power Generation StrategyEuropean Power Generation Strategy

Summit Summit

Prague, 30 November 2011Prague, 30 November 2011

Weero KosterWeero Koster

Table of ContentsTable of Contents

Characteristics of the Dutch energy Characteristics of the Dutch energy marketmarket

Dutch energy policyDutch energy policy

Developments on the Dutch energy Developments on the Dutch energy marketmarket

Main subsidy schemesMain subsidy schemes

Characteristics Dutch Characteristics Dutch energy marketenergy market

Production 2008

Production 2010

Consumption 2008

Consumption 2010

Electricity 104 TWh 128,8 TWh 99 TWh 109,4 TWh

Gas 80 billion m3 83,9 billion m3

41,4 billion m3

51,9 billion m3

Heat 37 PJ 49 PJ 37 PJ 41,7 PJ

Characteristics Dutch Characteristics Dutch energy marketenergy market

Electricity productionElectricity production large scale generation companies (Electrabel, E.On, large scale generation companies (Electrabel, E.On,

Essent, Nuon and EPZ)Essent, Nuon and EPZ)

small de-central plantssmall de-central plants

only 2,5% is imported (compared to 15-20% prior to only 2,5% is imported (compared to 15-20% prior to 2009)2009)

Gas productionGas production Groningen field and small fieldsGroningen field and small fields

huge export of exporthuge export of export

HeatHeat Electricity production and waste industryElectricity production and waste industry

Electricity Electricity networknetwork

Emden

Oude Staten-Zijl

Julianadorp

Vlieghuis

Winterswijk

Zevernaar

Bocholtz

‘s Gravenvoeren

Hilvarenbeek

Obbicht

Zandvliet

Zelzate

Gas networkGas network

Dutch energy policyDutch energy policy Coalition agreement Coalition agreement ““Balkenende IVBalkenende IV”” – –

goals for 2020:goals for 2020: 30% less greenhouse gases 30% less greenhouse gases 20% share of sustainable energy 20% share of sustainable energy annual energy savings rate of 2%annual energy savings rate of 2%

Dutch energy policyDutch energy policy 14% renewable energy production in 202014% renewable energy production in 2020 20% CO20% CO22-emission reduction compared to 1990-emission reduction compared to 1990

Dutch energy policyDutch energy policy

Clean and Efficient policy plan Clean and Efficient policy plan appears not far-reaching enough and appears not far-reaching enough and goals for 2020 would not be reachedgoals for 2020 would not be reached

Fundamental transition towards Fundamental transition towards climate neutral economy in 2050 - climate neutral economy in 2050 - Climate Letter 2050Climate Letter 2050

Third Energy PackageThird Energy Package Third Energy Package – 3 options for network Third Energy Package – 3 options for network

operators per 2011operators per 2011

Ownership unbundling (OU)

Independent Transmission System Operator (ITO)

Independent System Operator (ISO)

Owns/manages network

Independent management Manages network and investment decisions

Minority shareholding Vertically integrated undertaking

Vertically integrated undertaking

Dividends allowed Supervisory body / Compliance officer

Leases network from supplier

No control / voting rights

Heavy regulated and permanent monitoring by national regulator

Regulated and permanent monitoring by national regulator

Developments on the Developments on the Dutch energy marketDutch energy market

Electricity Act and Gas ActElectricity Act and Gas Act require full ownership unbundling of grid require full ownership unbundling of grid

operatorsoperators

transfer of all gas transportation grid to Gasunietransfer of all gas transportation grid to Gasunie

transfer of >110 kV grids to TenneTtransfer of >110 kV grids to TenneT

Upcoming investments in grids requiredUpcoming investments in grids required

Discussion on minority privatisation of Discussion on minority privatisation of Gasunie/TenneTGasunie/TenneT

Position of regional grid operators?Position of regional grid operators?

Developments on the Developments on the Dutch energy marketDutch energy market

RWE announced to sell its Urenco-stakeRWE announced to sell its Urenco-stake Ownership Ownership

1/3 UK Government 1/3 UK Government

1/3 Dutch government 1/3 Dutch government

1/3 E.On and RWE jointly1/3 E.On and RWE jointly

Urenco is managed by the Shareholder ExecutiveUrenco is managed by the Shareholder Executive

UK government is also considering selling its UK government is also considering selling its stakestake

Dutch government needs to take positionDutch government needs to take position

Developments on the Developments on the Dutch energy marketDutch energy market

Nuclear – Borssele plantNuclear – Borssele plant owned by DELTA and RWEowned by DELTA and RWE lifetime of nuclear plant prolonged until 2033lifetime of nuclear plant prolonged until 2033

Robustness test on flooding risk, earth Robustness test on flooding risk, earth quake risk, fire risk and power back up quake risk, fire risk and power back up

Development of Borssele IIDevelopment of Borssele II licence DELTA licence DELTA coalition partner: RWE / EdF ?coalition partner: RWE / EdF ? permitting procedure to be started in near permitting procedure to be started in near

futurefuture

Developments on the Developments on the Dutch energy marketDutch energy market

Governmental support for renewable energyGovernmental support for renewable energy Introduction suppliers obligationIntroduction suppliers obligation Priority on grid for renewable energyPriority on grid for renewable energy SDE+SDE+

SDE+ 2012SDE+ 2012 EUR 1,7 bln availableEUR 1,7 bln available stimulation of innovative energy sources which are stimulation of innovative energy sources which are

economically unviable economically unviable thermal conversion biomass, near shore wind, offshore thermal conversion biomass, near shore wind, offshore

wind, solar pv (>15 kWp), geothermal, and osmosiswind, solar pv (>15 kWp), geothermal, and osmosis

2013 SDE+ will be paid by energy 2013 SDE+ will be paid by energy consumers through a top up charge on the consumers through a top up charge on the energy billenergy bill

Developments on the Developments on the Dutch energy marketDutch energy market

Green deals Dutch governmentGreen deals Dutch government sustainable initiatives in energy, water, sustainable initiatives in energy, water,

commodities or mobility fieldcommodities or mobility field economically viableeconomically viable

lead to new economic activities or cost lead to new economic activities or cost reduction for companiesreduction for companies

e.g. smart cars / grids / citiese.g. smart cars / grids / cities

Draft regulation for mandatory biomass Draft regulation for mandatory biomass fuel mixfuel mix

Growth renewable Growth renewable energyenergy

Alternative Alternative energy sourcesenergy sources

green / biogasgreen / biogas

4 licences for exploration activities 4 licences for exploration activities scale gasscale gas

solar and tidal solar and tidal

offshore and onshore wind offshore and onshore wind

wind in lakeswind in lakes

Main subsidy Main subsidy schemesschemes

SDE+ Subsidy for electricity producers

EIA Net tax reduction of up to 40% from taxable profit upon energy-efficient equipment of renewable technology for lifetime of investment

VAMIL Tax scheme which provides for freedom of choice for rate and timing of depreciation of environmental investments

MIA Tax relief of up to 40% from taxable profit for entrepreneurs that invest in environmental friendly /improved equipment

Green investment

Tax incentive scheme for green projects that benefit nature and environment

SMOM Scheme for NGOs for development of environmental and sustainable initiatives

ProMT Subsidy for MKB to encourage development and application of innovative processes

WBSO Tax incentive scheme for innovation and promotion of research