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Netherlands

Netherlands

An impressive blueprint

The Dutch government aims to generate 10% of the country's energy supply from renewable resources by 2020 and to improve energy efficiency by one third in the next 25 years. Although these measures address many problems peculiar to this densely populated corner of Europe, the Dutch might just be in the process of creating a blueprint for renewables development which will be of wider use as the wind industry faces the challenges of the next century.

Fifteen million people on one small patch of land." This refrain from a popular song, echoing out of transistor radios up and down the Netherlands, reiterates the main problem facing the Dutch wind sector: too many people, too little space and, consequently, limited prospects of growth. With this in mind, the Dutch might be expected to have engaged in some special pleading when it came to meeting the European Union's CO2 reduction targets. Instead the government aims to generate 10% of energy supply from renewable resources by 2020 and to improve energy efficiency by one third in the next 25 years. Targets which, if met, should do much to confirm the reputation of the Dutch as "good Europeans."

The measures proposed by the government for achieving these goals within the context of a fully liberalised energy market are various (pages 36-39). Taken together, however, they show a common concern with the integration of renewables into the wider system of energy provision in the Netherlands. Although in many cases the measures address problems peculiar to this particular densely populated corner of Europe, the Dutch might just be in the process of creating a blueprint for renewables which will be of wider use as the wind industry faces the challenges of the next century. Not only do the Dutch plans deal with how best to secure a market for wind, but they also outline ways of bringing down the many institutional barriers to development. Seldom, if ever, has such a well rounded national policy for wind been seen before.

Given the constraints on wind development in the Netherlands, a simple free market mechanism is not in itself going to secure the future of the sector, but neither, if they are to develop naturally, can wind and other renewables be hived off into some alternative ghetto hedged around with protective measures. Instead the government has adopted an integrated approach to energy policy which, while encouraging the development of a free market in all forms of energy trade, also attempts to level the playing field for renewables. If successful, it could shift wind from the periphery towards the centre of energy provision.

The proposed integration of wind energy into the social and economic life of the Netherlands takes various forms. The first problem to be tackled is that of making space for wind. Here the government has encouraged a series of initiatives aimed at increasing public tolerance of wind technology through clarifying issues such as the impact of turbines on bird life. Accepting that there is a finite amount of land available for wind development -- some 1000 MW installed capacity at current estimates -- the government has proposed a number of administrative measures, including reformed zoning regulations which will enable the optimal use of traditional sites.

In addition it is seeking to overcome the physical limitations on wind development by providing political and financial support for the investigation of non traditional, inland, near shore and offshore sites. Thus regulations on tower height are to be reformed in order to make the development of inland sites financially viable, while government agency NOVEM is conducting a feasibility study into the development of a 100 turbine 100 MW wind plant in the North Sea. If successful this project would provide electricity for 100,000 of the Netherlands' fifteen million people.

Allied to concern with the physical integration of wind technology, another series of measures is aimed at the integration of wind into the wider economy of energy provision. These measures are characterised by a pragmatically Dutch mix of free-market carrot and governmental stick. Subsidies to wind were cut in 1995 and replaced by a series of fiscal measures aimed at encouraging investment in renewables. Meanwhile the power companies have been told that come the free market a certain percentage of the electricity they sell must have been generated from renewable resources. To meet their targets they will be able to buy-in green power from independent producers in the Netherlands, or import it from abroad on a green electricity market.

The merits of tax breaks over direct subsidies for wind will continue to be hotly debated, but one consequence of the removal of subsidies is the emergence of green power marketing strategies whose full economic potential and cultural impact remains to be seen. Coupled with fiscal measures designed to close the remaining price gap between conventional fuels and renewables, green electricity schemes have revealed a surprising willingness on the part of Dutch consumers to part with their guilders for the good of the environment. As a consequence of the success such "green pricing" policy, some energy distribution companies are already profiling themselves as green utilities and beginning to market green power as a value added commodity, rather than looking at wind as a government imposed obligation.

With some 10,000 households signed up by mid 1996, green electricity schemes will not in themselves secure the future of wind in the Netherlands -- as an economic measure they do little to address the primary problem of physical constraints. However, culturally they may prove more important. In extending the option of clean energy to all consumers, the popular perception of wind power as an exotic alternative should be diminished. It is to be hoped that this would go hand in hand with a corresponding increase in levels of public support. An integrated wind sector can no longer be regarded as a rich man's toy with no relevance to the real energy needs of a modern industrialised country.

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