Type: Country Review (Book)
Subject: Energy Security
Oil and natural gas represented respectively 38% and 47% of the Netherlands’s total primary energy supply (TPES) in 2010. While their share in the energy mix is expected to decline slightly over the next decade, demand for both fuels will rise as total energy demand in the country grows. The Netherlands plans to meet its future energy needs with an “all‐in” approach, seeing a role for all fuels including nuclear, and pursuing a goal of increasing renewable energy from the 4% it represented in 2010 to 14% by 2020. In terms of fossil fuels, new coal‐fired power plants will come on‐line in the coming years while natural gas will remain the country’s key fuel,
serving as the back‐up source for intermittent renewable power generation.
Oil demand in the Netherlands was roughly 1 million barrels per day (mb/d) in 2010, with an import dependency of just over 96%. Domestic oil production is in decline in the Netherlands, and despite the extension of output made possible by new upstream techniques, the country will gradually move towards becoming fully import dependant in meeting its oil needs. At the same time, the Netherlands plays a key role as a major oil‐refining centre in Europe, with an extensive supply network of ports, storage facilities and pipeline connections playing a critical role for oil supplies to the continent. Likewise for natural gas, the country plays a regional role for supply security. However unlike for oil, the Netherlands produces more gas than it consumes domestically, making the country a net‐exporter. Substantial gas reserves remain and are expected to allow the Netherlands to continue as a net exporter of gas over the coming decade.
The emergency oil response system of the Netherlands is based on a mixed system of mandatory emergency reserve stocks held by both the industry and the Dutch stockholding agency, COVA. In times of an IEA collective action, the most likely response by the Netherlands would be a drawdown of the public stocks held by COVA. The agency covered 90% of the Netherland’s total domestic stockholding obligation in 2011, however this share could decline to 80% in the future, in conjunction with the transposition of the EU directive on emergency oil stockholding by end‐2012.
Concerning the security of natural gas, the Dutch gas production and infrastructure capacities provide a significant level of security for domestic supply. However, as domestic production declines (the Netherlands is expected to become a net importer of gas sometime in the period 2020 to 2025), well timed investments in storage capacities and LNG installations will be necessary to maintain supply flexibility. The transmission system operator, GTS, along with the distribution system operators, must report every two years detailing capacity needs and planned investments in network capacity to ensure security of supply. GTS is also responsible for taking emergency measures in a gas crisis, and would be responsible for assuring gas supplies to priority customers (households and small businesses) in extreme cold conditions.