Dutch utilities demand government climate action

Dutch utilities group VEMW has called on the government to act to implement the numerous low-carbon plans that have been approved nationwide, saying August 10 that time was running out.

The statement comes a day after the publication of the UN Intergovernmental Panel for Climate Change that said global warming and climate change are "unequivocally a result of human activities. Limiting warming to a maximum of 1.5-2.0 °C can only be achieved through a global approach to greenhouse gas emissions."

New analysis since the Paris Agreement nearly six years ago made it clear that "the climate is changing dangerously faster than previously estimated," VEMW CEO Hans Grunfeld said. "The good news is that plans are ready in the Netherlands for sectors such as industry, agriculture, mobility and the built environment," he added. These plans include the 2030 Climate Agreement, six cluster energy strategies and the 33 regional energy strategies.

But the plans need to be implemented, which means co-operation with the government is crucial. "There is a need for much more renewable energy, such as green electricity and low-carbon hydrogen. And infrastructure for the transport of those energy carriers and carbon capture and storage," he said. And industry and other energy users need the government to work on removing barriers by introducing legislation, creating support mechanisms.

The Netherlands has already gone some way towards a low-carbon future, notably through the co-operation between the state-owned gas and power transmission systems in a way that delivers energy in the most efficient way, rather than the two bodies competing with each other.

But gas transmission system operator Gasunie told NGW last month that while its hydrogen pipeline project had government approval, there was so far no supply chain upstream. 

The Netherlands has also gone further than needed in terms of cutting gas production, lowering the cap on Groningen output so far below the safety limit as determined by the state mining regulator that the operator, NAM, wants to close the field altogether three years early. The government wants to keep it in reserve for longer.

In a late July statement, NAM said: "The minister has indicated that he wants to close the field as soon as possible. NAM wholeheartedly endorses this. As far as NAM is concerned, this could be in 2022, as soon as the nitrogen installation in Zuidbroek is operational. The Groningen field in a backup role is then undesirable and unnecessary."

This summer, however, has shown how exposed European consumers are to global gas markets. Privately-owned retailers relying on low-cost LNG supplies pouring into the many terminals along the coast cannot outbid Asian LNG buyers with captive buyers, state ownership or oil-indexed contracts. Deliveries have almost dried up, according to research by Timera Energy.

Timera said August 9 that July sendout in northwest Europe dropped by over 70% from May to lows not seen since 2018. They were even 30% below 2020, a period of US LNG shut ins.

The story is not much better for pipeline gas with the swing producer Groningen down sharply and lower-than-hoped-for deliveries from Norway and Russia. The result is a very low storage level with the withdrawal season only a few months away.

Wider perspectives

Surging prices, meanwhile, have led Britain's energy regulator Ofgem to warn that most households could face the biggest price rise in over a decade this October.

The UK offshore sector sees domestic oil and gas production as preferable to imports, from an economic and environmental standpoint. It also believes that the technical knowledge and experience built up over the 50 years of activity puts it in a good position to deliver low-carbon solutions such as carbon capture and sequestration, tied to blue hydrogen production.

But the UK government has been attacked for its secrecy about the cost of the measures that it plans to introduce in order to limit carbon emissions. And following a freedom of information inquiry, the independent Climate Change Committee has been ordered to show its working behind its calculations of the costs, which it produced so that parliament could approve the legislation for the net-zero carbon goal.

Among the casualties of the clash between rhetoric and reality is the plan to ban gas-fired boilers, now reportedly another five years in the future. 

Part of the clash arises from the suspicion that the cost of attempting to achieve national net zero carbon goals could fall very heavily on consumers in OECD countries. They are already expecting some medium-term economic pain as governments try to mitigate COVID-19. 

Meanwhile, coal-fired power generation continues to fuel economic growth elsewhere, notably in Asia and cancel out reductions elsewhere. Population growth and rising prosperity is another reason to expect emissions to rise. And the  UN-backed plan for advanced economies to raise $100bn/yr to help struggling countries to decarbonise also has stalled.

With the commitments not achieved late last year, it has now been redefinined as the minimum level. "The collective goal must be to more than surpass the $100bn/yr target in 2021 and to scale up international public finance in the period thereafter to accelerate the drive to net zero carbon and climate-resilient growth," an independent expert group said in December.