Dutch nuclear revival gains traction on supply concerns

  • Market: Electricity, Natural gas
  • 24/02/22

The Dutch lower house this week discussed plans to develop further nuclear capacity in the Netherlands to enhance energy supply security amid rising concerns over the availability and affordability of imported energy following the escalation of the Russia-Ukraine crisis.

At the end of last year, the Dutch government already revived the idea of developing further nuclear capacity as a means to reduce greenhouse gas emissions (GHG) from other energy sources and reach carbon neutrality by 2050. According to the coalition agreement published in December, the government set out to build two new nuclear reactors after 2030 as well as extend the lifespan of the only operational reactor.

In light of the current military escalation in Ukraine and concerns over rising energy costs the debate over developing domestic nuclear capacity, to also provide a more stable market environment in the Netherlands, has regained traction.

Energy and climate minister Rob Jetten reiterated yesterday that the Netherlands and Europe must become "more autonomous and less dependent on specific countries" to ensure security of supply. To this end, the government is considering setting up gas storage filling obligations as well as publishing a scenario study for the use of nuclear energy, Jetten said. The minister did not provide a timing for the publication of the study but said that it was "under way".

Natural gas made up around 45pc of total Dutch energy supply in 2020, according to IEA data, followed by oil at 36pc and biofuels at 7.2pc. Nuclear power made up only 1.5pc of the total supply, according to the agency.

Natural gas makes up a similar proportion of the country's power generation, with gas-fired output reaching 46.58pc of the generation mix in 2021, according to Entso-E data, and 57.32pc in 2020. Nuclear power generation made up 4.93pc during the same period,, down from 5.47pc a year earlier.

And the Netherlands' dependence on gas imports has risen sharply in recent years, because of declining domestic production. The country turned into a net gas importer in 2018 for the first time since the 1950s, when the giant Groningen field was discovered.

Groningen production has been turned down sharply in recent years as it has been linked to earthquakes in the region. The field could be permanently shut as early as October 2023, further increasing the Netherlands' need for imports. And production from the country's other fields has been in long-term decline, although output from these is expected to continue in the coming decades.

Besides Norway, Russia has been the largest source of Dutch imports in recent years. And the government has in the past repeatedly said that higher Russian imports will have to offset a substantial share of the expected further decrease in domestic production, given limited scope to increase supply from other sources.

The Dutch government has set out plans to reduce carbon emissions from the energy sector by 60pc by 2030 and exit from coal by the same time. But its national energy and climate plan (NECP) does not set out specific objectives for increasing diversification of energy sources and supply from third countries or for reducing import dependency.

Reviving nuclear energy to meet these targets and ensure supply security has been touted by many governments in Europe, with France a forerunner having recently announced plans to build new reactors by 2050.


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