Dutch Elections: Energy and Climate Considerations

  

By Ceciel Nieuwenhout, Postdoctoral researcher at GCELS and City Council member for GroenLinks

On 17 March 2021 the people of the Netherlands will elect a new House of Representatives (Tweede Kamer), which also kickstarts the formation process for a new government (regering). This blogpost shows what is at stake regarding climate and energy policy, focusing on the election programmes of the different political parties. This blog consists of three parts. First, an introduction to the political landscape of the Netherlands will be given. Second, the context of these elections and the position of energy and climate policy therein will be illustrated. The third part of the blog shows the positions of the parties on various themes: general climate targets and international cooperation; the different opinions on the energy mix of the future; developments in hydrogen, infrastructure, storage and CCS. It concludes with some remarks on the built environment, and finally, the question “who pays the bill?”

Political Landscape of the Netherlands

The Dutch political landscape consists of a large number of political parties. The coalition government of the past four years was formed by the conservative liberal party VVD, the right-wing Christian CDA, the liberal democrats of D66 and ChristenUnie (CU), a progressive Christian party. The current opposition in parliament is composed of Geert Wilders’ extreme right-wing party PVV, the labour party PvdA, the progressive leftwing greens (GroenLinks; GL), the conservative leftwing socialist party (SP), the animal party (PvdD), a party to represent elderly people (50+), a party with roots in the labour party but split off to represent different cultural minorities, such as muslims (DENK), orthodox Christian SGP and extreme right-wing Forum voor Democratie (FvD), which has two seats in the current lower house but which has grown a lot since the last elections (2017). A recent split-off from FvD, JA21, is also expected to gain seats in the House of Representatives. Next to this party, there are several other newcomers which may possibly gain a seat. Graphically portrayed on axis for conservative-progressive and left-right, the spectrum looks like this:

Source: www.kieskompas.nl

An average of the latest opinion polls shows that VVD appears to become the largest party by far. The other parties are much smaller, but can still play a significant role through the formation of a coalition government. Looking at the current polls compared to the results of the elections of 2017, VVD, PvdA, CU, PvdA, FvD and JA21 increase their amount of seats, while D66, GL, SP, 50+ and Denk fear their amount of seats declines.

Source: Tom Louwerse, Peilingwijzer (based on data available on 16-2-2021)

Context: Covid or Climate Crisis?

These are strange times to have elections. Due to the Covid-19 crisis, the possibilities for election campaigns ‘on the street’ are limited. Instead, parties are fighting to show what they stand for via traditional media outlets (radio and television debates) and via offline and online advertisement. With a view to traditional media outlets, the discourse is dominated by the Covid-19 crisis, and frequently disregards other themes, such as climate and energy policy. Nevertheless, as the Netherlands is struggling to reach its climate and energy targets (for example, reaching only 8,8% renewable energy instead of the 14% target set by the Renewable Energy Directive), former minister Ed Nijpels (VVD) predicts that climate policy will be one of the hot items in the formation process. This process, which takes place after the elections, is a political bargaining process in which the largest party negotiates with other parties, which can lend their support to the government (and take place in it) in exchange for commitment of the new government on important election themes.

An interesting paradox: although climate policy is hardly a theme in media outlets in the weeks before the elections, opinion polls by I&O Research (commissioned by environmental NGO Milieudefensie) show that 69% of the respondents (a representative group of inhabitants of the Netherlands) are worried about greenhouse gases and the effects thereof on the climate; that more than half of the Dutch think that the government should do more (32%) or much more (19%) to reduce GHG emissions than the current government (dubbed Rutte III as it is the third government led by prime minister Mark Rutte) has done. Moreover, two thirds of the respondents indicated that climate policy is important or even essential in their choice of a political party in the upcoming election. People likely to vote for extreme right-wing parties PVV and FvD and orthodox-Christian party SGP are less inclined (only 20-22%) to take climate policy of the party into consideration when selecting their party.

For the part below, the useful overview by Energie-Nederland, industry association for the producers, suppliers and traders of electricity, gas and heat, has been used as a source. Although as an industry association, Energie-Nederland is not neutral by nature, they give a broad overview on the viewpoints of the different parties on the different parts of the energy sector.

Positions of the Parties on Energy and Climate Themes

Climate Targets and International Cooperation

Most parties think that the current climate agreements (Paris Agreement and the Dutch Climate Agreement) should stay in force (VVD, CDA, D66, PvdA) or that the targets should even be set higher to 55 or 60% in 2030 (GL, SP, CU, PvdD). Most parties also agree that more European cooperation is necessary, for example a fortification of the EU-ETS or a European CO2 border tax (avoiding carbon leakage). The outliers are PVV and FvD (and recent split-off JA21). They are against climate targets, want to withdraw from the Paris Agreement and stop the Dutch Climate Agreement.

Energy Mix

Which sources should be part of the energy mix and which ones should be excluded? Opinions on that matter differ significantly, especially when it comes to nuclear energy and different sources of renewable energy. Nuclear energy (or at least further investigation into this option) is supported by VVD, PVV, CDA, SGP, FvD, but D66, GL, SP, PvdA and PvdD are against nuclear energy. Regarding renewable energy, several parties have high ambitions for offshore wind: both GL and D66 aim for 60 GW in the coming government period, 2021-2025; also VVD, CDA, SP, PvdA mention offshore wind as an important option. Rooftop solar energy also scores high amongst the parties, but there is a discussion about whether it should be possible to compel building owners to install solar PV or whether ‘stimulating’ the installation of solar PV is sufficient. PVV, FvD and JA21 are against the installation of solar and wind energy and aim to stop subsidies towards these technologies. An interesting idea posed by GL is that inhabitants living close to large solar or wind energy projects will receive shares in these projects, in order to financially gain from the energy transition.

The use of biomass for the production of energy  is another hot item. Currently, woodpellets imported from overseas are used in coal-fired power plants. This practice (biomassabijstook) is considered as ‘renewable’ energy by the current government and heavily subsidized, but it is criticised by several parties including government think-tank SER. After the current elections, no party explicitly wants to continue the practice of biomassabijstook, and most parties aim to stop this type of energy production. One of the arguments is that the co-firing of biomass in coal-fired powerplants helps these plants to continue their operations, even though without subsidized biomass, their business case would not be positive anymore.

The use of coal as a source of energy should be phased out by 2030. VVD has adopted this in their election programme for the next government period, which is strange as the Act on the prohibition of coal for the production of electricity (Wet Verbod op Kolen bij Elektriciteitsproductie) was already adopted in 2019. Both PvdA and GL mention that they want to do this earlier, by 2025 at latest (i.e. in the upcoming government period).

Hydrogen, infrastructure, storage and CCS

Generation is only one part of the energy sector. Several parties also go into other parts of the energy sector. For example, VVD, CDA, GL, PvdA and CU mention they want a focus on (green) hydrogen. Green hydrogen is considered essential for the energy transition in the industry, but could also serve the transport sector well (especially heavy transport, trains and shipping) and as a possibility for providing flexibility and (seasonal) storage to the energy system. The technical requirements (i.e. the percentages of admixture in the current gas grid, and the responsibilities of different entities such as the gas TSO Gasunie, the national regulatory authority ACM (Autoriteit Consument en Markt) and commercial developers are too detailed to be mentioned in election programmes.

One interesting detail regarding energy storage in general is that D66 explicitly mentions they want to exclude energy storage from current energy taxes. This is relevant as energy storage is currently experiencing a problem with double taxation. This problem, although already identified in 2018 in a motion drafted by GL, VVD and D66, adopted by the parliament, is still not solved in 2021.

Another topic is carbon capture and storage (CCS), which could take place at the large gas- and coal-fired powerplants as well as at heavy industry sites such as the oil refineries near Rotterdam and the steel plant at IJmuiden. Carbon Dioxide could be stored offshore in depleted gas fields in the North Sea. VVD and CDA consider CCS as one of the solutions to limit CO2 emissions in the Netherlands. PvdA, CU and SGP view it only as a temporary solution and PvdD wants to prohibit it altogether. Other parties are silent on the matter.

Then, some other plans are also worth mentioning. PvdA wants to create energy islands at sea. The Dutch gas and electricity TSOs have been playing with this idea for a while (via the North Sea Wind Power Hub project) but it has not been a topic of political discussion yet. Another interesting initiative is that the SP aims to set up public energy supply companies (which fits within their general frame to re-nationalise previously privatised sectors such as the railways and the healthcare sector).

Finally, some words on the electricity and gas infrastructures of the Netherlands: VVD and CU mention the protection of vital national energy infrastructures (against undesired influence from foreign entities) – and GL and PvdA want to reserve much more money to invest in making these infrastructures ready for the energy transition.

Built Environment

An important political question regarding the built environment is whether and how buildings can change from natural gas-based heating to other types of heating (all-electric or connected to heat networks). Some buildings are not fit for either of these options, and how these buildings will be heated in the future remains to be seen: the current production of biogas is by far not enough to serve the demand from both the industry, the transportation sector and the housing sector. Municipalities are obliged to develop a ‘Heat Transition Vision’ (Transitievisie Warmte), in which these choices are developed per neighbourhood. VVD and CDA want to fortify the position of the home owner in this transition, and refrain from compulsory refits/renovations (labelsprongen). They also want to keep the current gas network in place as much as possible, in order to use it for (the admixture of) other (green) gases such as biogas or hydrogen in the future. PVV, FvD and JA21 want to stop the transition from natural gas to other sources of heat. CDA, GL and D66 want to increase subsidies for insulation of buildings, and they are joined by SP, PvdA, PvdD and CU, who also want to focus on insulation measures. Interestingly, D66 is the only party that mentions they want to break the monopoly position of heat companies; based on earlier political positions, left-wing parties GL, PvdA and SP would not mind the development of public heat companies,introduction of home batteries and a new fund for the energy transition in the social housing sector. GL wants to give municipalities more competences in the energy transition of the built environment. A strong role for the government is also desired by PvdA, and CU wants to give public heat networks a big role. Finally, PvdD wants to introduce neighbourhood batteries (buurtbatterijen).

Who pays the bill?

A hot item that almost all parties have something to say about is how the costs of the energy transition are divided. Interestingly, VVD does not have anything specific to say about this. PVV and FvD want to stop all subsidies for renewable energy, which means that the levies on the energy bill (ODE) can also be abolished. CDA mentions that the bill should be paid from the general budget rather than via the electricity bill. GL and PvdA want to introduce an extra CO2 levy, based on more ‘polluter pays’ policy. Both SP and DENK are very clear: the costs should be borne by large energy consumers rather than by household consumers, via changes in the energy taxes. Also PvdD wants to increase the price of natural gas for large consumers considerably. SP wants to give the social housing sector more financial leeway by making sure the social housing corporations have a lower tax burden (verhuurdersheffing; winstbelasting). This money can then be used for the energy transition in the social housing sector.

Conclusion

Even though energy and climate policy are not really at the centre of the election debates, many voters base their vote on parties’ stance towards climate change mitigation. This calls for a closer look at the climate and energy viewpoints of the different parties for the upcoming elections. The wide spectrum of political parties brings an equally wide spread of viewpoints on the future energy and climate policy of the Netherlands. It will be very interesting to follow the coalition process over the coming months, to see what remains of the parties’ ambitions on energy and climate policy!