The Netherlands on track to complete coal power phase-out by 2030
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The Netherlands on track to complete coal power phase-out by 2030

By GlobalData Energy 20 Oct 2021 (Last Updated October 20th, 2021 10:40)

The government in the Netherlands is planning to stop thermal power generation in the country by 2030 as the use of coal power has already declined.

GlobalData’s latest report, “Netherlands Power Market Outlook to 2030, Update 2021 – Market Trends, Regulations, and Competitive Landscape,” discusses the power market structure of the Netherlands and provides historical and forecast numbers for capacity, generation, and consumption up to 2030. Detailed analysis of the country’s power market regulatory structure, competitive landscape, and a list of major power plants are provided. The report also gives a snapshot of the power sector in the country on broad parameters of macroeconomics, supply security, generation infrastructure, transmission and distribution infrastructure, electricity import and export scenario, degree of competition, regulatory scenario and future potential. An analysis of the deals in the country’s power sector is also included in the report.

The Netherlands is on track to complete the planned coal power phase-out by 2030. In 2020, the coal power capacity in the country stood at 3.31GW and this is expected to decline to 3.18GW in 2025 before being phased out altogether in 2030. Thermal power generation is expected to sharply decline during the 2021 to 2030 period as the Dutch Government plans to phase out coal power plants by 2030. In 2019, the Dutch lawmakers passed a bill banning the use of coal in power generation by 2030. The phase-out process is planned to be executed in two steps, with two low-efficiency plants to be closed by 2025 and three newer plants to be closed by 2030. From a share of 70.4% in annual generation in 2020, thermal power generation share is expected to decline to 32.9% in 2030.

The Dutch Government’s ban on coal power generation follows on its efforts to reduce greenhouse emissions by 49% by the end of 2030 as compared to 1990 levels. Coal-based power plants owners in the country have been advised by the government to switch to alternate fuels, mostly sustainable biopower, in the time until 2030 to remain in business. To accelerate the phase-out of coal power, the government decided to introduce a minimum carbon price floor in 2020. However, the implementation was delayed due to the Covid-19 pandemic.

The Dutch Government’s plan of coal power phase-out has met with resistance from utilities. Several major utilities such as RWE and Uniper have invoked the Energy Charter Treaty, a legally binding multilateral agreement aimed towards cross-border cooperation in the energy industry, to sue the Netherlands for more than $2bn as compensation for phasing out coal power by 2030. Further, the Dutch Government also plans to phase out nuclear power by 2033. Such rapid phase-out of two major power generating sources in a short timeframe may endanger the country’s supply security. Hence, the country needs to effectively balance its retiring power generation fleet with the proper base-load capacity to continue uninterrupted power generation in the future.

The country is also planning to stop the domestic production of gas by 2030 which is likely to pose developmental challenges for the Dutch government. As of 2020, 64.2% of the power generated in the Netherlands came from gas-fired thermal power and even though this share is projected to decline to 31.2% in 2030, it will still hold a significant share in the country’s power generation mix. In this context, the decline in domestic gas production is a concern, especially as the government is cutting down production in the Groningen gas field every year since 2013. Therefore, as a matter of energy security, the Netherlands needs to secure a steady supply of gas as it is expected to hold a significant share in the power generation till 2030.

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