1. Supported by www.res-h-policy.eu National market report: the Netherlands 2 nd Project Meeting London, 10 March 2009 Luuk Beurskens, Marijke Menkveld Energy research Centre of the Netherlands (ECN)

2. National market report: the Netherlands www.res-h-policy.eu2 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

3. National market report: the Netherlands www.res-h-policy.eu3 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)

4. National market report: the Netherlands www.res-h-policy.eu4 Dutch thermal energy market: heating Final heat demand in the Netherlands for the year 2006, broken down into sector and temperature level (Source: ECN)

5. National market report: the Netherlands www.res-h-policy.eu5 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)

6. National market report: the Netherlands www.res-h-policy.eu6 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

7. National market report: the Netherlands www.res-h-policy.eu7 Renewable heating and cooling production * Includes cooling ** This is 47% of total EfW Production of renewable heat in 2006 (Source Statistics netherlands, CBS)

8. National market report: the Netherlands www.res-h-policy.eu8 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

9. National market report: the Netherlands www.res-h-policy.eu9 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 [m 2 ] 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)

10. National market report: the Netherlands www.res-h-policy.eu10 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

11. National market report: the Netherlands www.res-h-policy.eu11 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

12. National market report: the Netherlands www.res-h-policy.eu12 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)

13. National market report: the Netherlands www.res-h-policy.eu13 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

14. National market report: the Netherlands www.res-h-policy.eu14 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

15. National market report: the Netherlands www.res-h-policy.eu15 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)

16. National market report: the Netherlands www.res-h-policy.eu16 Biomass Market Many technology types Many players Competitive options, mainly because of availability of cheap biomass input

17. National market report: the Netherlands www.res-h-policy.eu17 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

18. National market report: the Netherlands www.res-h-policy.eu18 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

19. National market report: the Netherlands www.res-h-policy.eu19 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.

20. National market report: the Netherlands www.res-h-policy.eu20 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

21. National market report: the Netherlands www.res-h-policy.eu21 Thanks!