The further development of sustainable energy sources and the market for sustainable energy are to a large extent determined by government energy policy. The International Energy Agency has identified the continuing government subsidization of fossil energy sources as a key factor in this. Dutch energy analysts have shown that the Dutch government provides far more financial support to the fossil energy market than to developing sustainable energy. At the same time, according to a European think tank for climate policy, by 2021 electricity generated from sustainable sources will cost hardly more than electricity generated from fossil fuels.
Dutch energy policy favours large energy companies
According to René van der Bruggen, CEO of Imtech, a global supplier of technical services with an annual turnover of 1.8 billion euros, the Dutch energy policy is focusing too much on large scale energy production (based on coal). “Germany is far more advanced in cogenerating energy and heat.”, he says in an interview in the NRC Handelsblad edition of July 28, 2012. “Every hospital, every large office block or industrial zone produces its own energy. With a yield of 60-70% these installation are more efficient and cleaner than coal fired power plants. It is also easier for German households to invest in this type of energy production because they can sell the surplus -what they’re not using themselves- at a fixed price to the grid of the commercial energy companies. This is not possible in the Netherlands, where the large energy companies decide what you get paid for your surplus of energy production. Therefore, nobody is investing in his own energy supply, and thus the Netherlands is throwing away a system that enables you to produce clean energy in an efficient manner.......” (NRC, 28 July 2012).
International Energy Agency: Global fossil fuel subsidy amounts to USD 400 billion
According to the International Energy Agency (IEA), subsidies supporting the use of fossil fuels in 2010 amounted to USD 409 billion worldwide. Half of this amount consists of oil subsidies. Despite agreements that were made at the G20 summit meeting in Pittsburgh in 2009 to reduce subsidies for production and consumption of fossil fuels, the IEA claims that the 2010 amount was over USD 100 billion higher than the year before. The rise paralleled the general price rises in the same period. If policies are not changed, the IEA forecasts that subsidies will grow to USD 660 billion by 2020.
Dutch energy policy is contradictory
The Dutch government offers discounts and tax exemptions to big energy users. But these measures don’t tally with the government’s objectives of promoting energy saving and reducing CO2 emissions. This is one of the most important conclusions from a study commissioned by Eneco, an energy company, and Triodos Bank and performed by two independent research and consultancy organizations: CE Delft and Ecofys.
Government interventions focus on end users of energy. They include tax exemption for kerosene, shipping fuels and red diesel (€ 1.7 billion) and reductions on energy taxes, in particular for the use of natural gas (€ 1.8 million). In 2010 the government spent four times as much on supporting the fossil-based energy market (€ 5.8 billion) as on supporting sustainable energy (€1.5 billion).
Sustainable energy will cost the same as fossil-based electricity 10 years from now
According to a report by the European Climate Foundation, a think tank for climate policy, in 2021 electricity generated from sustainable sources will cost hardly more than electricity generated from fossil fuels. The report outlines two scenarios for European energy provision in 2030: one in which 50% of all electricity is generated from sustainable sources and one where the share of sustainable sources is 60%. To achieve this, investments in CO2-emission friendly generation techniques and in distribution networks need to be doubled over the next 20 years. According to the think tank, the investments will be recouped in the long run, as sun and wind cost nothing. While fossil fuels are (still) cheaper, their associated costs will remain the same. Moreover, as climate policies become stricter, CO2 emissions will become more expensive.
Source: European Climate Foundation, 'Power Perspectives 2030: On the road to a decarbonised power sector', November 2011 (PDF, 9.7 Mb)