The Netherlands: Domestic Renewable Energy Likely to Be Cheaper Than Imported

For the Stichting Natuur en Milieu, Ecofys assessed the costs and risks of a potential import of renewable energy statistics by the Dutch Government in order to meet the binding renewable energy (RE) target of 14% by 2020. Recently the new government has announced that it will increase the ambition from 14% to 16%.

It is generally assumed that imported RE statistics, through the cooperation mechanisms of the European RES Directive, will have lower costs than supporting the potentially more expensive domestic technologies that would be needed to meet the targets fully by domestic production in the Netherlands. This work of Ecofys shows that this assumption is questionable, and that the uncertainties and risks of pursuing an import-strategy may be significant.

Based on an assessment of available literature, the expected price of statistical transfers might be in the broad range of 50-100 €/MWh (excluding electricity price), which can be roughly compared to the cost levels for producing electricity by onshore wind energy (lower end) to offshore wind energy (higher end) in the Netherlands over the average economic lifetime of 15 years. Without early negotiations with potential exporters, there is a significant risk that imports will not be available at lower cost than domestic RE production.

An additional risk is that exporters may not be able to deliver the RE as forecasted. Finally, public acceptance of statistical imports may be lower than of domestic RE production, due to the missed domestic co-benefits (job creation, economic development).

[mappress]

Press release, December 6, 2012; Image: Nuon