Dutch Energy Policies: Ambitious Goals Meet Harsh Realities
Key strategies include a massive shift to renewables such as offshore wind, solar, and green hydrogen, alongside phasing out natural gas production from the Groningen field and incentivizing electrification.
The 2019 National Climate Agreement (Klimaatakkoord) outlined a 49% CO2 reduction by 2030 and 95% by 2050, supported by subsidies for electric vehicles (though set to end in 2025) and investments in smart grids.
However, recent political shifts under a new coalition government have scaled back some ambitions, acknowledging that the 2030 target is “extremely unlikely” without additional rapid policies.
Critics argue these policies have prioritized ideology over economic viability, leading to grid instability, nitrogen emission conflicts blocking industrial expansions, and an overreliance on intermittent renewables that exacerbate energy price volatility.
The National Energy System Plan anticipates a four-fold increase in electricity supply by 2050, but deployment momentum for clean energy is waning, with the more ambitious 55 TWh renewable target on land potentially out of reach.
Household prices, often indicative of broader trends, stood at approximately 0.30-0.35 USD/kWh in the Netherlands, compared to Germany’s 0.40 USD/kWh and the UK’s lower but still elevated rates around 0.28-0.32 USD/kWh.
Comparatively:
|
Country
|
Industrial Electricity Price (approx. €/MWh, 2024 avg.)
|
Key Factors
|
|---|---|---|
|
Netherlands
|
85-100 (wholesale, with spikes)
|
High taxes, renewable intermittency, and grid congestion.
|
|
UK
|
90-110 (highest in Europe for businesses)
|
Policy costs, North Sea gas decline, and import reliance.
|
|
Germany
|
80-95 (decreasing slightly in 2025)
|
Energiewende costs, nuclear phase-out, but more subsidies.
|
These elevated prices stem from energy transition mandates, with the Netherlands and Germany particularly burdened by anti-fossil fuel policies, while the UK faces similar issues but with marginally higher business rates due to Brexit-related factors.
Negative pricing events—up to 5% of hours in the Netherlands in 2024—highlight oversupply from renewables but do little to offset overall costs for energy-intensive industries
Stemming the Tide: Strategies to Halt Dutch Deindustrialization
The European Commission’s action plan for the chemical and refinery sectors could provide targeted subsidies, but it risks being too late without swift implementation.
Bridging high-price periods with unconditional subsidies, as suggested in EU analyses, could prevent further closures while maintaining competitiveness against Chinese dumping.
In the longer term, diversify energy sources by delaying natural gas phase-outs and investing in stable baseload sources, such as nuclear or imported LNG, to stabilize prices.
Enhancing grid infrastructure to alleviate congestion and channeling EU cohesion funds toward net-zero industrial clusters could foster innovation without economic sacrifice.
Ultimately, policymakers should prioritize economic “makeability” by learning from Germany’s pitfalls, where similar policies led to widespread plant closures.
U.S. States on the Brink: Echoes of Dutch Disease and German Deindustrialization?
High energy costs from refinery shutdowns, EV mandates, and fossil fuel phase-outs could exacerbate deindustrialization, with California’s policies already posing national security risks by straining grids and increasing blackout vulnerabilities.
In New York, rising costs from wind/solar subsidies and gas reductions may displace vulnerable populations and harm reliability, with critics warning the net-zero push could do more harm than good.
Similar patterns emerge in Texas and Florida, where all-in costs for 100% clean energy transitions are 11-27% lower in some models but still risk equity issues if not managed.
This evokes “Dutch Disease”—resource curse leading to manufacturing decline—or German-style deindustrialization, where high prices erode competitiveness.
The Broader Pattern: Net Zero, Deindustrialization, and Soaring Energy Prices
Germany’s Energiewende has led to factory relocations, while the Netherlands follows suit with closures at firms like Shell’s Rotterdam refinery and Vynova’s PVC plant.
This “tragedy of the horizon” sees short-term economic pain for long-term climate gains, but without balanced policies, it risks undermining security and growth.
In the U.S., states forcing rapid transitions face analogous threats: inflated costs, grid instability, and job losses in manufacturing.
Substantiated by economic models, delaying full net zero to 2050 could cut costs and retain gas in the mix longer, preserving industry.
The lesson? Net zero must integrate affordability and reliability to avoid self-inflicted economic decline. I would further add that, where are the land reclamation funds for wind and solar? I have yet to find any wind or solar project that has end-of-life funding and land reclamation. That will be my next Substack article.