The Dutch government must show its cards and let its citizens know what the energy transition will cost so that a substantive, social discussion about the dilemmas of innovation and the transformation of the energy system can begin. That is the opinion of director Richard van de Sanden of the recently founded Eindhoven Institute for Renewable Energy Systems (EIRES).
EIRES is part of the Eindhoven University of Technology (TU/e) in the Netherlands and has received a budget of 10 million euros from the Executive Board of the TU/e to attract researchers and professors. Currently, 200 researchers are working on energy-related projects at the TU/e.
“Sustainable energy projects have unprofitable peaks that are being readjusted by the government. The road to becoming CO2-neutral by 2050 needs to become clear. We agree on the goal, but not on the road towards it.”
For example, owners of a fully electric car do not have to pay any road taxes. The reason is that the technology is new and not yet fully developed and that the market still has yet to take off. It’s therefore inevitable that money has to be spent in order to interest consumers in electric mobility.
Germany does mention what the costs entail
According to Van de Sanden, the costs are well known behind the scenes of the ministries involved. “These are astronomical sums of money. By not disclosing the costs, the government is not taking the Dutch people seriously. We have all decided that ‘green’ and ‘climate’ are important terms for us. Then you also have to say what the costs are.”
The costs of investing in new technology do need to be explained properly. “A cycle to progress through product innovation costs 10 percent of the eventual roll-out. The roll-out itself will generate a lot of money in the form of economic activity and jobs, for example.”
In Germany, Van de Sanden says, the costs of unprofitable peaks are openly discussed. “This has been part of German industrial policy since the 1990s. The German government wants to be a leader in the field of hydrogen technology by 2050. They are investing a lot of money into this. Their goal, of course, is that they will eventually succeed in establishing a great deal of activity in that field in their country,” Van de Sanden states.
According to him, such an industrial policy is lacking in the Netherlands. “The last project of this kind was the rescue of the Rotterdamse Droogdok Maatschappij in Rotterdam back in the 1980s. Nothing else came after that.”
The Netherlands stayed clinging to gas from Groningen
In the long run, this could cost the Netherlands dearly. According to Van de Sanden, the energy transition will have major consequences for the petrochemical industry in the Rotterdam port area, among others. It is conceivable that energy generation will take place in countries like Portugal because there is plenty of sun and wind there which makes energy that is produced there cheaper. It is also logical that the chemical industry will locate itself close to sun and wind farms. That is not the case in the Netherlands and would seriously undermine economic activity and employment in the Netherlands.
Compared to Germany, the Netherlands is lagging behind when it comes to the use of sustainable energy. This is evident from the figures that the European Commission regularly publishes on this subject. The Netherlands is much more dependent on fossil energy than neighboring countries. Van de Sanden: “How long has the Netherlands been seriously engaged in the energy transition? Two years? Germany has been working on it for thirty years. It’s only logical that they are ahead of the game.
One explanation for this is that the interests of Dutch companies and the state are strongly anchored in the production and sale of natural gas, most of which can be found in Groningen, in the north of the Netherlands. It was only when houses started collapsing through their foundations as a result of the gas drillings that the discussion started in earnest and entire neighborhoods had to get rid themselves of gas. “The gas from Groningen,” Van de Sanden emphasizes.
No national coordinator for the energy transition
This discussion is not particularly well-balanced either, Van de Sanden finds. “You can remove gas from homes on a large scale. But you can also do this on a small scale and wait with the large-scale roll-out until you have developed synthetic methane – equivalent to natural gas – cost-effectively on the basis of CO2. You extract CO2 from the air to achieve that. You can then use the network of pipelines already in place for that.”
The problem at the moment is that there is no national coordinator who can guide government, such as provinces and municipalities in a coordinated manner towards a CO2-neutral 2050.
“That realization is starting to dawn on us now,” says Van de Sanden. “We are working on a national action plan. We no longer have the utilities we used to have. They have all been privatized. Private companies will not invest millions that will only be recouped in 40 years’ time. They want to get their money back within five years. The government has to take on that role. This is what you see happening at a local level, like in Tilburg. A utility company will probably be set up there to coordinate the energy transition.
In the jungle of uncertainties that the energy transition involves, a number of things are already self-evident, according to Van de Sanden.
Electric cars and insulating buildings
“Committing to electric transportation with passenger cars is a good choice. Investing in it is good. A lot of heat is lost due to poor insulation. Installing a heat pump in a poorly insulated house makes no sense at all. So investing in insulating housing is a good idea.”
Technology with appliances that are still too expensive at the moment such as the storage of energy from hydrogen, for example, should only be rolled out on a grand scale when it is cheaper, Van de Sanden believes. “If energy from hydrogen is much more expensive than energy from natural gas, its profitability peak is staggeringly high. Industry wants to be compensated for that. You have to be transparent about this and explain to the public why you are making a particular choice. You have to include them in the dilemmas of the energy transition. Or else you will lose public support.”
Richard van de Sanden is director of the Eindhoven Institute for Renewable Energy Systems (EIRES). EIRES was founded in 2020 by the TUe. EIRES projects involve the development of a salt battery for the storage of sustainably generated heating, metal fuels, and the development of affordable eletrolyzers. Digital models are also under development (digital twins) so that insight can be gained into the best choice for new technologies that have been developed during the energy transition. These choices must be made before 2050.