BrazilAnalysis: The new climate & energy policy of the Dutch government
In July, the new right-wing Dutch government unveiled its key policy plans for the next four years, with climate and energy one of the focal pillars for the years ahead. Bianca van Zijderveld from Accuracy walks through the plan with special note for the growing role of nuclear energy.
The new government – which is led by PVV, alongside VVD and newcomers the Farmer-Citizen Movement (BBB) and New Social Contract (NSC) – has set a target to reduce the level of net greenhouse gas emissions in 2030 by 55% compared with the level in 1990. While this goal is in line with EU regulations, it is less ambitious than the goal of the previous government, which included a buffer to ensure targets for 2050 would be reached.
This is however not the only difference in climate and energy policies between the former and current governments. An overview:
Alignment with European standards
Dutch climate policy will strictly adhere to European agreements, no longer aiming to exceed them as under the previous government. For instance, the phase-out of fossil fuel subsidies, a priority of former Climate and Energy Minister Jetten at COP28, will now follow the European framework.
While aligning with European agreements ensures compliance with broader regional goals, this reduced ambition compared with previous national targets may slow environmental progress and innovation.
Energy poverty
The coalition aims to prevent energy poverty by assisting citizens and small entrepreneurs with sustainability efforts, with special attention to those facing high energy bills due to district heating connections. This focus is expected to create a more inclusive and equitable energy transition.
Housing and energy regulations
Homeowners will no longer be required to improve their energy labels. The new government has reversed the previous mandate by outgoing Housing and Spatial Planning Minister de Jonge, which required installing heat pumps and replacing all traditional boilers by 2026. While this provides immediate economic relief and reduces the regulatory burden, it may pose challenges in terms of broader environmental and financial implications.
Promotion of electric vehicles (EVs)
Subsidies for EVs will end in 2025, while the weight correction for electric cars in motor vehicle tax (MRB) will remain. The coalition will explore delaying the establishment of zero-emission zones, emphasising that these decisions will remain at city level. Balancing these changes will be crucial for continued progress towards sustainability and emission reduction goals, while addressing economic and social equity concerns.
Phasing out solar panel subsidies
The Outline Agreement is silent on abolishing the solar panel net metering scheme, which former Minister Jetten aimed to bring to an end. However, the budget appendix indicates the scheme will be discontinued from January 2027, despite votes against its abolition by the PVV and BBB parties in the senate earlier this year.
This change is expected to affect solar power adoption rates and free up funds for innovation, requiring a careful balance to ensure continued progress in renewable energy adoption and broader sustainability and climate change mitigation goals.
Climate adaptation
The coalition intends to prioritise climate adaptation. The strategy will be updated to address the impacts of drought on food production and building foundations, as well as the availability of fresh water. A reassessment of the High Water Protection Programme is included to ensure future dyke security.
In addition, the Outline Agreement has a strong focus on energy independence. The coalition believes the Netherlands should not rely on energy imports from countries deemed ‘unreliable’ like Russia and should strive to generate its own energy where possible. To accomplish this, the strategy includes investing in North Sea gas extraction and green hydrogen technology; however, the main focus is on nuclear energy.
Nuclear energy: from 1 to 5 nuclear plants
The coalition has great ambitions for nuclear energy. This source of power, generated by splitting uranium atoms in reactors, is CO2-free, but it produces radioactive waste. As a result, it has always been a topic of some controversy: supporters highlight its capacity and stability; critics worry about waste storage and costs.
Despite this, a growing percentage of adults in the Netherlands support the call for more nuclear energy: 36% in 2023, up from 25% in 2020, according to CBS (the national statistics office of the Netherlands).
The former government had already agreed to keep the current nuclear plant in Borssele operational, and now the new government has agreed to build four more. Yet significant obstacles remain – take, for example, the crowded power grid and high costs to build – and the Outline Agreement does not offer sufficient reassurance on these issues.
Challenges in Dutch nuclear expansion
The four coalition parties want the government to contribute to the construction of nuclear power plants ‘through public-private partnership and knowledge development’. According to the budgetary appendix, a total of €9.5 billion is reserved for this purpose until 2035. In the previous coalition agreement, €5 billion had already been ringfenced for the construction of two new nuclear power plants, so the total reserved amount now stands at €14.5 billion.
The exact cost of construction for these plants cannot be specified, but we can turn to the two nuclear power plants currently being built in the United Kingdom for an idea. The costs of these plants at Hinkley Point in Somerset were originally estimated at £18 billion (approximately €21 billion). However, due to cost overruns and inflation, developers now estimate the costs could rise to £46 billion (approximately €53 billion).
Furthermore, the appendix of the coalition agreement indicates that government investments will not begin before 2027 due to the years of preparation required before construction starts, pushing a substantial financial burden onto future governments.
Grid investments
Besides the investments required for the construction of new plants, there are other considerations. Borssele is currently favoured as the primary site for the new facilities, with the Maasvlakte (near Rotterdam) is also under consideration. The final decision will depend on studies regarding environmental impact, the electricity grid and local support.
Earlier this year, grid operator TenneT conducted a study on the integration possibilities within the current grid. The study revealed that neither Borssele nor the Maasvlakte could accommodate two new plants with the existing infrastructure, let alone four. Therefore, an expansion would only be possible if the new government finds capital for significant investments in the grid.
The Outline Agreement states that addressing these issues will be a priority, with a previous study warning that the investments required will run into the billions.
Timing is everything
While building additional nuclear power plants can contribute to increasing the Netherlands’ energy independence and support meeting climate goals, this solution alone will not suffice to achieve the government’s climate and energy ambitions; the investment challenges and timeframes involved are too great. Even once construction begins, it will take at least ten years before new nuclear power plants can start generating electricity, which will be too late to meet the 2030 climate goals.
A more comprehensive energy strategy is therefore of the essence for a sustainable and resilient energy future, one that includes nuclear power, renewable energy, energy efficiency measures and technological innovation.
Smaller modular reactors
One way to ramp up the contribution of nuclear power albeit in smaller, more feasible steps is through the use of small modular reactors (SMRs). Indeed, the government sees considerable potential in the emerging technology of SMRs. Although still in development, they will be built more quickly than large reactors thanks to their modular design, say experts. Their smaller size will also allow them to be deployed in multiple locations, including remote areas and off-grid settings.
With a power capacity equal to roughly one-third of traditional nuclear plants, SMRs offer cost-effectiveness and adaptability for various energy needs. However, it will take time before they become more cost-effective.
To that end, the involvement of private sector players will be key. This will be crucial to advance the technology from development to deployment. Approximately 15 different designs are currently in development across Europe, suggesting a notable shift towards modular, scalable nuclear solutions. However, the new Dutch government will have a critical role to play in ensuring the right market conditions are established.
Conclusion
Overall, the Outline Agreement addresses several short-term economic concerns; however, balancing them with long-term sustainability goals will be crucial for the Dutch government.
The plans for nuclear power and SMRs are ambitious and could provide a solution for greater independence in the future, as well as achieving the 2050 target levels. However, the government must create an attractive investment climate and corresponding market conditions to boost these plans.
The contribution of specialised and experienced market players is critical in overcoming challenges related to grid capacity and high costs. Though the government aims to bolster energy security while adhering to EU regulations, achieving these goals will require navigating a range of technical, financial and environmental challenges.
