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Shift away from gas.... But how?

25 October 2018

On Prinsjesdag last month, Prime Minister Rutte proclaimed that ‘the scale and scope of today’s energy transition is similar to that experienced during the period of reconstruction in the wake of the Second World War’. Energy economy expert Machiel Mulder is trying to introduce an element of realism to the debate. Many people and organizations – even government ministries – clamour to pick his brains and seek his advice.

Text: Jurgen Tiekstra. Photo: Jos Schuurman.

As befits a scientist, Machiel Mulder is a pragmatic thinker. In 2013 he was appointed Professor of Energy Market Regulation, a position that gives him an excellent platform to add a dose of realism to the debate in the Netherlands every now and again. For him, it is all very well and good that the cabinet has set itself the ambition of closing all coal-fired power stations by 2030 at the latest, but that won’t reduce gross CO2 emissions. This is all down to the European Emissions Trading System (ETS). The closure of coal-fired power stations here will enable the energy companies concerned to sell on their allowances, thereby increasing emissions elsewhere in Europe.

Import more gas

Another sobering thought: Before the summer Mulder and his fellow researcher José Luis Moraga presented a study in which he predicts that the Netherlands will still need a lot of gas in 2050. If we continue with the planned electrification of road transport and heating houses using heat pumps, demand for electricity will increase so much that there will never be enough wind turbines and solar panels to power everything. At the same time, the gas field in Groningen will also cease operations in 2030. As a result, gas imports – particularly from Russia and the Middle East – will become increasingly important. Mulder found out that the relevant ministries in The Hague were checking the figures in his study. ‘That’s great. In the report we deliberately included all the assumptions in tables, the intention being that the study should be completely transparent.’ The study is also being reviewed as part of the current discussions between the business community, governments and civil society organizations, which should culminate in the Climate Agreement by the end of this year. By then, Eric Wiebes, Minister of Economic Affairs, wants a list of concrete measures that can be used in the fight against climate change.

Supply security

Mulder knows the minister from the old days. ‘Wiebes used to be head of the Market Forces department at the Ministry of Economic Affairs. At the time I was head of the Energy Department at the CPB Netherlands Bureau for Economic Policy Analysis. Our paths crossed now and again.’ Those were very different times. Reducing carbon dioxide emissions was not yet high on the agenda and it was simply unthinkable that the Groningen gas field might ever close. ‘Around the end of the 1990s, the main priority was security of supply,’ says Mulder: ‘Will we have enough oil and gas in the future? The environment as a subject was there, but only a small group of people were really addressing the issue. I remember that, at the beginning of 2000, I did a study for the Ministry of Economic Affairs on security of supply: what should we do with Groningen gas, for example? Earthquakes weren’t even a factor. Back then it was more a matter of storing gas for later, so that we wouldn’t have to import too much from abroad. It was for this reason that policies were introduced to cap production in Groningen. But only because of the supply security issue.’

Machiel Mulder
Machiel Mulder

Compensation for damage

The winds have changed since then. Mulder did not anticipate the Groningen gas tap being turned off. ‘The decision really surprised me. I wonder whether it’s the right thing to do. The feeling at the moment is that we have to move away from gas and start reducing production in Groningen as soon as possible. Then there won’t be the risk of earthquakes anymore and there will be fewer houses to repair. That all sounds good in theory, but the crux of our study is correct: we do need gas. So we will need to import more of it, which will lead to higher risks and costs. My idea was to reduce production slightly and offer generous compensation to the Groningen region. But the government wants to pay out as little compensation as possible and cease all production. I don't quite understand that.’

On 22 and 23 November Machiel Mulder will be leading a two-day master class in The Hague, entitled: The shift away from gas.... But how? The master class is aimed at people from the government, the business community and civil society organizations. After all, what will it take to get the Netherlands to shift away from gas? During the master class this question will be addressed from multidisciplinary perspectives: technically, economically, legally and psychologically, and in terms of spatial planning. Because there is also a certain amount of resistance among the Dutch against such a major overhaul of our energy system.

Emission allowances

Ultimately, the main priority is to reduce CO2 emissions. What measures would Machiel Mulder propose to kickstart the shift? The first thing he mentions is the EU ETS. ‘This accounts for almost 50% of all CO2 emissions: from the electricity sector, from the chemical industry, from the metal industry. The only effective solution is to reduce the cap on the number of available emission allowances. And that’s happening: the European Parliament has decided to reduce it by 2.2% every year. If you lower the ceiling, there will be fewer emission allowances available and you simply have to cut down on CO2 emissions.'

Insolating houses

Gas consumption also has to be reduced, in particular by making homes more energy efficient. ‘That has to be done on a much larger scale than is happening now. New homes are already so much more energy efficient than older ones, so it is those older homes that are the problem. How can we make houses that were built in the 20s and 30s more efficient? If you want to use a heat pump, you shouldn’t need too much heat to warm up the house. This means that you have to insulate those houses incredibly well. But that can prove very difficult in a lot of old houses. If you don’t have a cavity wall, you may need to stick a layer to the outside of the house. That’s technically possible, but can cost up to tens of thousands of euros per house. Just for the insolation.’

The car industry lobby

Cars are also under fire; they also have to emit less. Mulder previously worked as an adviser to the European Committee of the Regions in Brussels. During that time he experienced first-hand the infamous car industry lobby. ‘Every time there was a call to lower the emission ceilings, they would roll out dramatic stories that it was impossible, that they needed more time, and that it would have a huge impact on competitiveness. Technically speaking, these emission standards could be much tighter. It’s not even that much more expensive. The German car manufacturers have lobbied against this for ten or fifteen years and have also cheated on the tests. That makes me so angry. It’s about taking social responsibility.’

In October 2018 this feature has also been published in alumnimagazine Broerstraat 5 .

Last modified:22 April 2020 4.14 p.m.
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