The Netherlands’ energy transition is accelerating rapidly, driven by a strong commitment to its climate framework. Since the National climate agreement in 2019, which included binding climate targets for 2030 and 2050, the shift in ambitions and the speed of the transition have been remarkable. Most notably, strong policy support has helped the Netherlands become a frontrunner in renewable electricity deployment, led by impressive growth in solar photovoltaics (PV) and wind power, notably offshore. Beyond the power sector, the Netherlands is also making good progress in electrifying heating and mobility. While there has been rapid growth in clean energy in recent years, the Netherlands continues to source most of its energy supply from fossil fuels. Close to half of electricity generation comes from natural gas and coal power, heating in buildings remains highly dependent on natural gas and the transport sector relies mostly on oil products. Fossil fuels must be displaced across all sectors if the Netherlands is to decarbonise the energy system in line with its climate targets.

Greater emphasis on meeting existing energy and climate targets will provide long-term policy stability and help unlock private sector investment. The Netherlands should build upon existing policy frameworks and implement a well-designed mix of measures to stay on a trajectory towards its climate targets, including cost-effective incentives as well as regulations. The Netherlands should also build on the National Energy System Plan from 2023, which represents a strong basis for the energy transition until 2050. The plan would benefit from further coherence with existing conditions, including how grid congestion impacts the transition, and a greater focus on demand-side development. Overall, the goal should be to develop a comprehensive strategy with co-ordination across government and sectors to link the ambitions set out in the plans to the realities on the ground.

The Netherlands needs to tackle several challenges if it is to advance its energy transition to the next stage. These challenges include securing investments in new electricity generation, reducing electricity grid congestion, managing the transition away from natural gas, which has long been a cornerstone of the energy system, and increasing demand certainty on the hydrogen market. Addressing these interwoven challenges requires a holistic, system-wide approach. A successful energy transition in the Netherlands will, therefore, depend on effective co-ordination across government, industry and communities.

The rapid scale-up of clean electricity generation capacity must continue, to replace electricity from fossil fuels, and enable further electrification. The National Energy System Plan maps out a possible four-fold growth in electricity supply by 2050. For offshore wind, the Netherlands has set very ambitious targets to increase installed capacity from around 5 gigawatts (GW) today to 35 GW by 2035 and 70 GW by 2050. This requires a stable framework for long-term offshore wind development in co-ordination with the buildout of hydrogen production, which will consume much of the electricity generated. The tendering regime must be responsive to market realities, while collaboration with stakeholders on smaller tenders and non-price criteria should continue. Grid expansion must match the pace of offshore wind deployment, providing confidence in the timing and terms of new connections.

A clear, resilient vision of the role for nuclear will be important if the Netherlands is to realise its ambitions for new capacity. Nuclear energy projects demand long-term commitment and stability, emphasising the importance of broad political agreement and a strong public mandate. The Netherlands wants to expand its nuclear fleet with four new nuclear reactors, and while current targets offer a good starting point, a robust evidence base for nuclear energy's role in a decarbonised system is also essential. This review, therefore, recommends an assessment of nuclear power's potential contribution to flexibility, baseload security and inertia management, alongside a look into non-electric applications of nuclear energy to enable better integration in a decarbonised energy system.

Electricity capacity additions and demand growth will put further pressure on a constrained grid. The Netherlands’ electricity grid was not built for the future profile of demand and supply, which includes an increasing role for variable and decentralised sources. As a result, grid congestion has become a major challenge to the clean energy transition and overall economic development. If the Netherlands is to decarbonise its energy system in line with the climate targets, it must find further solutions to grid congestion. In addition to accelerated grid expansion, policy and regulatory frameworks should incentivise increased flexibility and grid enhancement technologies, to maximise existing capacity. The National Grid Congestion Action Programme is a transparent and collaborative effort involving government and stakeholders to address the challenge of grid congestion.

Energy storage and flexibility will become increasingly important in an electricity system with higher shares of variable renewables. Batteries can contribute to balancing the electricity system and, if strategically placed and operated, effectively manage grid congestion. Connection tariffs could be adjusted to make battery investments more appealing, particularly for installations offering congestion management services by being located near supply or demand centres. Additionally, price signals should reflect local grid conditions as well as overall system needs. This can be achieved through further development of new contract forms and local flexibility markets.

The Netherlands is well placed to become a European hub for clean hydrogen, but investors are calling for more demand certainty. Great offshore wind resources and the existing position as an energy-trading hub provide the Netherlands with favourable conditions to becoming a large producer and importer of low-emission hydrogen.  While demand for low‑emission hydrogen is potentially large, not only to meet domestic needs but also to export to other markets, investors want more certainty, and final investment decisions for electrolyser projects are lagging. To reduce the risk for investors, more certainty is needed around the future demand for clean hydrogen, for example, through industrial decarbonisation strategies and obligations for the use of low‑emission hydrogen in industries.

Natural gas is central to the energy story of the Netherlands, and it needs a transparent, orderly transition path for the future. The 2035 decarbonisation target for the electricity sector means that existing natural gas power plant infrastructure must be transformed or decommissioned within the next decade. A strategy that minimises costs while ensuring security of supply is vital. In the heating sector, heat pumps and district heating are the main options to replace gas boilers, but market development is uncertain. There is a need to clarify the role for hybrid heat pump solutions and engage with local authorities and energy communities to assess the role for district heating across the country while further incentivising energy efficiency, electrification and the use of low-emission gases.

While the energy transition is progressing quickly, the equitable distribution of costs and benefits needs further attention. The global energy crisis highlighted how high exposure to natural gas prices can create issues around affordability and fairness, with the risk that lower-income households and small businesses bear disproportionate costs. The Netherlands should develop a comprehensive vision for an inclusive energy transition, prioritising equity and affordability, alongside the National Energy System Plan and Regional Energy Strategies. A methodology for assessing the distributional impacts of policies would help address unintended consequences and foster public support. Ultimately, there is a need to ensure that the costs and benefits are distributed equitably both now and over time.