It’s high time that Dutch energy policy concentrated on energy again. That’s what Prof. Bert Scholtens, professor of the Economics of Sustainability at the University of Groningen says. ‘In the Netherlands, factors like geopolitics and earning money are currently playing far too great a role in energy policy.’
Scholtens mentions the discovery of gas in Groningen in the 1950s as an example. ‘We were falling over ourselves to sell that gas because it’d soon be worth nothing. Nuclear fusion would produce much cheaper energy in the long run, we thought.’ Earning money was a more important motive than supplying the Netherlands with energy at the time, explains Scholtens. ‘But it’s the efficient use of natural resources to supply our energy needs, now and in the future, that energy policy should primarily be concentrating on.’
Scholtens does not agree with the ‘Clingendael experts’ who think that geopolitics should guide energy policy. The Netherlands buys coal from one country, oil from a different region and purchases its uranium from yet another source. ‘We are diversifying to be sure that if war breaks out in the Middle East we will at least still have power’, says Scholtens. ‘But Europe has sufficient economically viable natural resources – water, fossil fuels, wind, sun, geothermal energy and biomass. If they are efficiently used, we will be freed of supplies from areas where we cannot maintain regular economic and political relations.’
Economist Scholtens is researching how the scarce factors of capital, labour and nature can be used efficiently. He recommends using as little energy as possible. ‘By not consuming one joule you save three joules. You need a lot of energy to create energy, and then to transport it to companies and people at home.’
In addition, the Netherlands should exploit the available natural resources as well as possible. ‘We economists are very good at calculating whether a euro will earn the most by being invested in the exploitation of wind, gas or biomass’, says Scholtens. However, it is extremely important to use the correct figures. Importing coal from Germany may seem cheap, but appearances deceive.
Scholtens: ‘German coalmining is heavily subsidized. The German taxpayer pays a significant percentage of the mining costs, so coal is actually much more expensive than what we in the Netherlands pay for it. That may seem good for us, but as a member of the EU we should be examining efficiency on a European scale. And that is definitely not the most efficient way to use euros.’
According to Scholtens, in order to stimulate efficient use of resources, market mechanisms must be activated. That is why he is in favour of nationalizing the electricity and gas networks. ‘Private and company initiatives to generate energy themselves are currently being strangled at birth.’
People who generate electricity can’t just sell it, explains Scholtens. ‘You have to pay through the nose to be allowed to become a supplier. That’s because of the huge influence wielded by the network operators and power companies’, says Scholtens. ‘If I want to sell an apple tart, not a single baker can shout that I’m not allowed to because I’m not a baker. However, if I want to sell my power surplus, I have to satisfy all sorts of expensive rules.’
According to Scholtens, these rules are mainly determined by the major power companies. ‘In the past a mistaken assumption was made; liberalization was the name of the game. What we got instead was a powerful oligopoly. It’s high time to correct that mistake and to nationalize collective utilities such as energy networks, if only to enable the energy market to function optimally.’
Bert Scholtens (Loppersum, 1959) studied Economics at the University of Groningen and gained a PhD from the University of Amsterdam in 1994 with a thesis entitled ‘Towards a theory of international financial intermediation’. He has lectured at the University of Groningen since 1999, and became professor of Sustainability and Financial Institutions in 2004. In 2010 he became professor by special appointment in The Economics of Sustainability to the J.L. Bouma Chair. Scholtens is director of the Energy and Sustainability Centre.
Article by Barend Abeln and Jan Jacobs on the website of the ESB (Economic Statistical Reports)
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