National market report: the Netherlands

1. National market report:the Netherlands 2nd Project Meeting London, 10 March 2009 Luuk Beurskens, Marijke Menkveld Energy research Centre of the Netherlands (ECN)

2. Contents • Approach • Dutch thermal energy market • Typical Dutch RES-H/C systems • Renewable heating and cooling production (RES-H/C) • Past and existing RES-H/C policy in the Netherlands • Future developments • Conclusions www.res-h-policy.eu

3. Approach for compiling the report • Literature review (November 2008 – January 2009) • Interviews with stakeholders (February 2009) • Draft Dutch version (beginning of March 2009) • Review round among stakeholders (March 2009) • Final Dutch version (end of March 2009) • Final English version (April 2009) www.res-h-policy.eu

4. Dutch thermal energy market: heating • Final heat demand in the Netherlands for the year 2006, broken down into sector and temperature level (Source: ECN) www.res-h-policy.eu

5. Dutch thermal energy market: cooling • Final cooling demand in the Netherlands for the year 2006, broken down into sector and temperature level (Source: Estimates, ECN) www.res-h-policy.eu

6. Typical Dutch RES-H/C systems* • Combined heat and cold supply with underground storage (without heatpump) in service sector • Aerothermal heat pump combined with gas-fired boiler in households: hybrid system • Biomass co-firing in large coal-fired power plant • Substitute natural gas (SNG): • Short term small/moderate potential: digestion route • Moderate term (>2015) high potential (>>2015): gasification route • Renewable share from combustion of biodegradable waste in municipal solid waste: high electric conversion efficiency, no focus on district heating • * Not meaning representing the largest share www.res-h-policy.eu

7. Renewable heating and cooling production • * Includes cooling • ** This is 47% of total EfW • Production of renewable heat in 2006 (Source Statistics netherlands, CBS) www.res-h-policy.eu

8. Solar thermal • Market • Factory-made solar thermal systems: small, standardised and cost-optimised production • Long payback time: ≥ 15 years • Hybrid systems: solar thermal plus heat pump and solar thermal plus solar PV (PVT). Problem: norms and certification • Small and medium size national enterprises, short term focus, positive towards innovation but limited in budgets www.res-h-policy.eu

9. Solar thermal • Policy • Several policy schemes in place (1988 – 2008): subsidies, promotion campaigns, covenants, technology targets, new housing norms (EPC=1.0, 0.8) • Covenant successful in cost/price reduction, but not in upscaling of the market • Incentive schemes based on energy production [GJ], not collector surface area [m2] to stimulate efficient systems • As of September 2008: new subsidy for solar thermal in existing dwellings (up to 60 000 systems receive 25% to 50% of investment costs until 2011) www.res-h-policy.eu

10. Solar thermal • Lessons • Marketing is very important, maybe more important than price of a system • Communicate reality: long payback time but other benefits from solar thermal: environmental aspects and lower energy bill • Private home owners and tenants are more difficult to reach than social housing sector or other large system operators • New housing norms (EPC=1.0 and 0.8): other measures (cheaper, easier to install) are preferred over solar thermal • Training of installers is important: a conservative sector • Stop-and-go policy is a thread (communicate policy after 2011!) • Subsidy scheme makes system prices increase www.res-h-policy.eu

11. Heat pumps • Market • Many concepts: heat source, type of heat pump, heat distribution system, scale, combined systems • Integration of heat pump in building concept is crucial: high building quality is required • Selling points of heat pumps are: high comfort, better living conditions (air quality, humidity) • Heat pump regarded as project-specific: high engineering costs and high investment cost www.res-h-policy.eu

12. Heat pumps • Policy • Several policy schemes in place (1995 – 2008): action plan, subsidies, information campaigns, demonstration projects, technology targets, new housing norms (EPC=1.0, 0.8), corporate tax deduction • Discussion on renewable aspect of heat pump: industrial residual heat not considered renewable (± 1995) • As of September 2008: new subsidy for heat pumps in existing dwellings (up to 7 000 systems receive 20% to 25% of investment cost until 2011) www.res-h-policy.eu

13. Heat pumps • Lessons • Again: training of installers is important: a conservative sector • Heat pump can be cost-efficient provided that design of system and building are good • New housing norms (EPC=1.0 and 0.8): other measures (cheaper, easier to install) are preferred over heat pumps • Focus on regulation (for ground source systems including underground storage): several governmental bodies are involved in process for licensing www.res-h-policy.eu

14. Combined heat and cold supply with underground storage • Very successful! • Market: relative few companies which enhances knowledge transfer. Mostly large construction projects with only a few stakeholders, which facilitates the process. • Policy: demonstration projects ±1993. Because of profitable technology no direct subsidies: only subsidising of feasibility studies (a good strategy!) • Lessons: competitive technology + few stakeholders + support for feasibility studies = success www.res-h-policy.eu

15. Biomass • Various technologies • Energy from Waste (EfW) • District heating from biomass co-firing in large power plants • Boilers in industry and households • Biogas: landfill gas, digestion of manure and biodegradable waste streams or energy crops • Long term option: SNG from gasification in large scale (up to GWs) multi-purpose plant (SNG / electricity / heat) www.res-h-policy.eu

16. Biomass • Market • Many technology types • Many players • Competitive options, mainly because of availability of cheap biomass input www.res-h-policy.eu

17. Biomass • Policy • For EfW: landfill policy (no combustible waste as of 1996), covenant • MEP subsidy for electricity, focus on electric conversion efficiency for EfW, biogas, combustion technologies • No policy for biomass in households www.res-h-policy.eu

18. Biomass • Lessons • For EfW: core business is waste destruction: therefore high caloric waste streams not preferred because the maximum thermal operation constraints limit the throughput of waste (which generates the income) • MW-size biomass combustion plants sometimes ‘forget’ to contract heat consumers in planning phase: once plant in place no market for heat distribution • Low-quality biomass streams are interesting because of costs but technological constraints often limit their use • Increased demand for high-quality biomass will increase price (and imports) • Small scale regional use of forestry and other residues sometimes embraced by local governments www.res-h-policy.eu

19. Future developments • On request of the Ministry of Economic Affairs the Energy research Centre of the Netherlands (ECN) performs an outlook to 2020 in order to ex-ante evaluate current policy effectiveness. • This study is expected to be released end 2009. www.res-h-policy.eu

20. Conclusions (additional to technology lessons) • Most RES-H/C options aren’t competitive at current conventional energy prices • Future policy should be communicated clearly towards market, avoid stop-and-go situations • Several technologies benefit from a co-ordinated government approach • Involving installers is crucial for RES-H/C uptake • Avoid fairy-tale promises from RES-H/C: communicate clearly • Quality of buildings and installations is important to realise promises • Standardisation works for some technologies • Various barriers exist: policy is required on all fronts • Political commitment helps a lot • RES-H/C share in NL (20% in 2020) and EU target (14% in 2020) currently completely unclear • Targeting the consumer market involves a good communication strategy www.res-h-policy.eu

21. Thanks! www.res-h-policy.eu