Government intervention in the energy market

In this study, conducted jointly by Ecofys and CE Delft and commissioned by Eneco and Triodos Bank, government interventions in the Dutch energy market were inventoried under the guidance of a group of leading economists and energy experts. The consequences of these interventions for the playing field for fossil fuels, renewables, nuclear power and energy efficiency were then quantified. The results show that, by design or unintentionally, the Dutch government continues to provide greater incentives for energy consumption and use of fossil fuels than for renewable energy sources. Policies aimed at reducing the price differential between renewable and fossil-based electricity should therefore seek to phase out such support and only then address the residual ‘financial gap’.

On June 22nd the report was presented to MPs Liesbeth van Tongeren (Green Left) and Rene Leegte (Liberals) by the respective directors of CE Delft and Ecofys, Frans Rooijers and Manon Janssen.

Supplementary data, October 2011

This report has been revised to accommodate several comments received since original publication in June 2011:

1. Tax credit for investments in marginal gas fields on the Dutch continental shelf 
  • Changed from € 196 mln to zero
  • As yet, no use has been made of this scheme for 2010
2. Various multi-year subsidies for Carbon Capture and Storage (CCS)     
  • Changed from € 150 mln to € 15.3 mln (budgeted cash outlay according to cabinet letter to parliament)
  • The € 150 mln subsidy made available for the ROAD project in 2010 cannot be fully allocated to that year
3. Buy-off of eight companies’ EU ETS emission credits by the State of the Netherlands
  • Changed from € 56 mln to zero
  • This scheme only comes into force in 2013
4. Free EU ETS emission credits, 2005-2012
  • Changed from € 1.0 bln to 1.2 bln
  • The June 2011 report was based on the situation in the year 2020. This was because the EU had already announced its intention to address this indirect subsidy by auctioning a higher proportion of the credits. For the same reason, calculations were based on an emissions trading price of € 30/tCO2. We have now brought this assumption into line with the actual situation in 2010, taking a trading price of €14.3/tCO2 and free credits for 84Mt of emissions.

Needless to say, the total figures cited in the report as well as the summary have also been revised accordingly. The new versions can now be downloaded from this page.