The International Energy Agency (IEA) has released its report Netherlands 2024: Energy Policy Review, highlighting the Netherlands' progress in transitioning to clean energy. While the country has positioned itself as a leader in renewable energy deployment, it faces critical challenges to ensure energy security and meet its long-term climate goals. 1s3p5c

Renewable growth and challenges for the next phase 1u4g2w

Since 2018, the Netherlands has halved emissions in its power sector thanks to the expansion of renewable energy, including solar and wind power, complemented by electrification in sectors such as transportation and heating. However, the IEA report identifies key areas for improvement, such as upgrading electricity grids and reducing reliance on natural gas through low-emission technologies, including nuclear power, heat pumps, and district heating.

Despite these advancements, nearly 50% of electricity generation still comes from natural gas and coal. Additionally, the transport sector continues to rely heavily on oil products, and heating in buildings is predominantly fueled by natural gas.

Challenges in electric infrastructure and the role of hydrogen 1m5d2k

The Netherlands' National Energy System Plan aims for a fourfold increase in electricity supply by 2050. This will require massive deployment of renewables, particularly offshore wind energy, with a target to reach an installed capacity of 70 GW by 2050. However, bottlenecks in the electricity grid pose a significant challenge to connecting new projects.

Note: LULUCF: land use, land-use change and forestry. Sources: UNFCCC (2024). Data for 2022 and 2023 are from CBS: https://www.cbs.nl/engb/figures/detail/84979ENG. 

Clean hydrogen also plays a crucial role, both in meeting domestic needs and for export. According to the IEA, greater policy clarity is needed on the role of clean hydrogen in supplying the Netherlands' industrial base. Policies to stimulate demand would also create positive ripple effects for renewable energy deployment and emissions reduction. While the demand for low-emission hydrogen is potentially large, both domestically and for export, more certainty is needed to enable final investment decisions in electrolyzer projects.

Source: IEA (2024), Hydrogen Production and Infrastructure Projects Database.

New technologies and a comprehensive approach 366ua

In addition to renewables, the Netherlands plans to expand its nuclear capacity by adding four new reactors to complement solar and wind energy and ensure security and flexibility in the power system.

The report concludes that the Netherlands must adopt a holistic approach to address the interconnected challenges of its energy transition. A comprehensive strategy that coordinates efforts across government and sectors is essential to link ambitions to operational realities and ensure a fair distribution of the transition's costs and benefits.