The Renewable Energy Sector in the Netherlands - Essay Example

the renewable energy sector in the netherlands al Affiliation) Key words: Renewable, Energy, Netherlands Introduction Despite a long history of use of renewable energy in the Netherlands, particularly wind and water, the renewable energy sector in this country is by far one of the least developed of most European nations (Hafit and Vener,1987). It is also one with the bleakest future prospects and viability owing to geographical and geological complications the country faces which continue to negatively affect the sector (Martha and Ulfa, 2004). Evaluation of the Renewable Energy Sector in the Netherlands Factor conditions: The Netherlands has an extremely powerful and knowledge base for renewable energy technologies (Lafferty, 2009).There are various high tech projects in the countrythat sufficiently reinforce this opinion. The country has one of the most advanced off shore wind industries in the world (Jansen, Ostertag and Waltz, 2011). The renewable energy sector enjoys a top-sector status in the country hence, enjoys exponential and far reaching investment by both government, private sector and even science and technology institutions are encouraged to build capabilities, conduct research and test technologies in the country at subsidized costs (Ibon, Eguino and Anil, 201). For the top-sector, there are top- teams consisting of scientists, senior officials, small and medium enterprise representatives and figureheads in the sector (Matschoss, 2011). These top teams are responsible for identifying necessary adjustments and foreseeable challenges and possible opportunities in the sector and promptly advice the investors, businesses, scientists and the government on the best approach for maximum impact (Lovinfosse, 2008). This pragmatic intervention in the sector has greatly improved innovations in the sector for the Netherlands. The Netherlands also has an innovation contract in the renewable energy sector which primarily seeks to achieve the realization of European targets with regards to lowering emissions and sourcing at least 14 percent of total national energy consumption from Renewable Energy Sources (RES) that was made available in the year 2012.In the contract are substantive and financial agreements between companies, scientists and the government and its implementation started in 2012 and 2013.Even though not a producer herself, the Netherlands has a strategic locational advantage in terms of pipeline transit for gas for the North-West Europe (Bruekers, 2007). This ambitious measure has been taken by the government ownedcompanies, The Gas Union and EBN (Jeroen and Bruinsma, 2008). Demand Conditions: Renewable energy is extremely popular and enjoys favorable perception among the Dutch population. This has been also enhanced by a series of subsidies programs the government has persistently perused. As thus, the overall consumption of renewable energy has grown from 1 per cent in 1990 to 3.3 per cent as at 2011. There is still a massive demand and a large deficit in supply with an enormous ready market within the Netherlands alone, leave alone the increasingly growing unmet demand in European and global markets (Fantom,2007). The demand for renewable energy has also risen exponentially owing to regulation to blend biofuels into the transport sector.The amendment to the Electricity Act also gives unquestionable and legally binding preference to the renewable sources of energy which avails the needed market for renewable energy as soon as it is produced and market ready(Eburon, 2011) Related and Supporting Industries: The preference and popularity of renewable sources of energy makes it preferred for both domestic and industrial use (Shephard, 1994). This is because of the favorable status it is associated with in terms of climate change, which is an issue of continued national concern and worry (Gipe, 1995). This is primarily because the Netherlands largely is geographically located below sea level and is seriously threatened by a rising sea level, a direct result of global warming (Rao, 2011). The Biofuel Decree by the government also allows the industry to tap into the large ad lucrative Dutch transport sector. Government: The Netherlands government has put up concrete measures aimed at stabilizing and mainstreaming renewable energy production and consumption in the country. To begin with, the government has ratified a series of tax incentives for small entrepreneur ventures into the renewable energy sector (Doe and Snow, 2005). For instance, in 2013, the Vamil, EIA and MIA together provided 280 million euros in tax relief by allowing 36 to 41percent deduction from taxable profit to entrepreneurs. Before August of 2006, renewable energy generators were eligible to MEP subsidy and the subsidy is set to continue for a ten period for the projects proceeding August 2006. Succeeding the MEP was another subsidy regime, the SDE+ Premium which is applicable to successful applicants of new installations that generate renewable electricity and gas. In the year 2013 alone, a total of 3 billion euros has been availed under the program, an increase of about 1.7 billion from 2012(Napolion and Aliakbar, 2013). This measure is seen by observers as a strategic incentive by the government to push forward renewable energy sources generation capacity by stimulating non- initiative proven technologies into production of renewable energy and retail through the national grid at regular market prices, thus, making this form of energy largely acceptable and without further financial burdens to consumers (Hills, 1984). The initiative has had a tangible impact on the production of renewable energy in the country as several new technologies became eligible for the relief. Heat technology also got into the fold as at 2012 and then followed a new innovative technology, gasification. The government has managed and still looks to encourage production of cheap and sustainable energy through these incentives. Other measures have been taken to ensure more focus towards renewable energy in the Netherlands. There has been a Sustainable Energy Production subsidy system to encourage ventures into the sector by subsidizing production of renewable electricity, gas and heat. A biofuels decree has been implemented to make mandatory the in-cooperation of biofuels into the transport sector to guarantee market for the renewable energy. There is in place a government coordination regulation which accelerates the process of permitting and licensing large renewable energy projects. In place is also the Crisis and Recovery act, which facilitates the development of large scale renewable energy projects (Timothy, 2000). There is a regulation in place, the WEBO Act which seek to ensure a combination policy of other renewable energy generations into one environmental permit to allow one company to diversify the forms of renewable energy forms it can wish to venture into. Lastly, there has been an amendment to the Electricity Act to give priority and preference to renewable energy over non-renewable forms in any situation of congestion of the grid, which by extension, avails an exponential market to renewable energy and keeps them out of any competition whatsoever. Chance: The Netherlands, by coincidence, has a large portion of her territory geographically situated below sea level (Hafit and Vener, 1987). This leaves the country exposed and constantly threatened by a continuously rising sea level and other adverse weather conditions like storms which have wreaked havoc in the country for generations (Sens, 1984). These changing and potentially dangerous natural phenomena are a direct impact of global warming (Martin, Paul and Righter, 2002). As thus, the debate on global warming and carbon gas emissions is one that is very actively engaged in the country and the Dutch are well aware that cutting down on green- house emissions is imperative for the survival of the country (Fay and Colomb, 2002). This has left a massive preference for safer and harmless renewable energy. The country, therefore pursue a future of sustainability with renewable sources of energy as a matter of national interest with an existential threat element in it Sayigh and Backus, 1977). Secondly, the Netherland is by chance a very densely populated country and there is need for energy security to meet the large national demand (Droege, 2012). This position comes with an understandable natural need to supplement conventional sources of energy with other forms to guarantee energy sufficiency (Bejan,Vadasz and Krojer, 1999). Renewable sources therefore become necessary needed supplements. Conclusion The Netherlands is a tremendously growing market and source as well as a crucial hub for transitfor renewable energy (Droege, 2003). The attractive and lucrative investment climate, massive and steadily growing knowledge and innovation potential in renewable energy technology sector coupled with government determination and relentless initiatives and incentives for the sector make the country have a promising future outlook in the sector (Schneider, 2014). 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