1. Versnellen van de energietransitie: kostbaar of kansrijk
Versnellen van de energietransitie: kostbaar of kansrijk? Een gedachten-experiment voor Nederland
Springtij | September 2017

2. Messages to remember 01 It is possible to reach (deep) decarbonization02
The energy transition will be costly, but also provides economic opportunities
Increased electrification drives further rollout of renewables 03

3. To achieve EU 2050 ambition Netherlands needs to accelerate with factor 3
CO2 equivalent emission, % change as of 1990
110
-16%
-20%
-40%
-60%
-80%
100
224
0.7%./yr
197 90
187 80
179 70
134 60 50 87
2%./yr = 3x 40 30 45 20 10
1990
2000
2010
‘14
‘16
2020
2030
2040
2050
SOURCE: CBS

4. We selected a set of measures
Assumptions used
Transport
Shift to electricity for domestic shipping, buses, light duty vehicles, and motor cycles
Shift to hydrogen for trucks
Buildings
Improved insulation
Shift to electric, district (and geothermal), and biogas space heating
Shift to biogas (18%) and electric (82%) water heating and cooking
Industry
Shift from oil and gas furnaces and steam boilers to electric versions
Example shift from coal blast to biogas and electric furnaces
Efficiency improvements
Other demand
Energy efficiency improvements of 1% per year
Power
Gas, coal, and oil are replaced by wind, solar, biomass and gas as backup
Introduction of flexibility measures
SOURCE: McKinsey MGI, CE Delft, CPB, CBS

5. The current energy system is largely dependent on fossil fuels
Netherlands energy demand in 2014; flow between energy sources and sectors, PJ
Energy sources
Sectors
Natural gas
1,114
Transport
438
Oil
709
Residential
373
Coal
377
Commercial
315
Renew- ables1
136
Industry
840
Other 77
Let me start off by saying: it’s a very very complex world. It’s not like you can lift a lever in one place, and somewhere else there will be a clear causal effect.
Agriculture, fishing & other
160
Electricity
(net import) 53
Power sector2
343 (net)
1 Includes: hydro, geothermal, solar, wind, and biomass
2 Only includes net use for central power production (320 PJ) and transmission and distribution losses (23 PJ); energy sector own use (e.g., oil consumption in refining is included in industry)
SOURCE: Centraal Bureau voor de Statistiek (2014), “Energiebalans” and “Energieverbruik” databases

6. In 2040, the energy system would look and function very differently
Netherlands energy demand in 2040; flow between energy sources and sectors, PJ
Energy sources
Sectors
Natural gas
Transport
Oil
Residential
Coal
Commercial
Renew- ables1
Industry
Other
Agriculture, fishing & other
Let me start off by saying: it’s a very very complex world. It’s not like you can lift a lever in one place, and somewhere else there will be a clear causal effect.
Power sector2
1 Includes: hydro, geothermal, solar, wind, biomass, and hydrogen
2 Includes net biomass use (94 PJ), gas use (111 PJ) and own use and transmission and distribution losses

7. When striving for 80% reduction by 2040 the role of renewables and power increases further
Netherlands energy demand in 2040; flow between energy sources and sectors, PJ
Energy sources
Sectors
Natural gas
Transport
Oil
Residential
Coal
Commercial
Renew- ables1
Industry
Other
Let me start off by saying: it’s a very very complex world. It’s not like you can lift a lever in one place, and somewhere else there will be a clear causal effect.
Agriculture, fishing & other
Power sector2
1 Includes: hydro, geothermal, solar, wind, biomass, and hydrogen
2 Includes net biomass use (94 PJ), gas use (37 PJ), and own use and transmission and distribution losses

8. ~10 EUR billion/ year or ~3%
An annual investment of ~EUR 10 billion would be needed to move towards a 60% CO2 reduction by 2040
Indicative net investment need, EUR billions, 2020 to 2040
~10 EUR billion/ year or ~3%
of annual budget 20
200 45 20
135
Economic impact
Direct impact of investments and changes in import – export balance
Shifts towards sectors with higher multipliers
Attraction of new economic activities
Note: Cumulative investment varies strongly with commodity prices (incl. offshore wind, PV) 30
Transport
Residential
and
Commercial
Industry
Estimate investment need to adjust demand
RES build out (excluding grid)
Network and
connection
costs
Total
additional investment
Demand
System and Generation

9. CO2e emissions from industry have reduced 2x faster than total emissions in the Netherlands
CO2 equivalent emission, % change as of 1990
Total emissions
Industry emissions
110
-16%
-20%
-40%
-60%
-80%
100
224
197 90
187 80 70
-32% 60 50 40 30 20
-95% 10
1990
2000
2010
‘14
‘15
2020
2030
2040
2050
SOURCE: CBS, National Inventory Report ( )

10. A game of clusters - 67 Mton industrial CO2 emissions
FIG 2:
A game of clusters - 67 Mton industrial CO2 emissions 29
158
CO2e(CH4/N2O/F)
CO2e (CO2)
Mton
Total emissions Netherlands
Industrial facility
Dedicated power plant
0,1 Mton CO2
6 Mton CO2
CCS
120+ 45
CCU
End of life emissions mostly outside NL 38 7 22
Energy-related emissions
Process- emissions
0.3 5
Top 10% industrial facilities are responsible for >65% of CO2 emissions
Recycling
Recycling
Reuse
SOURCE: PRTR Netherlands, National Inventory Report 2016 – data for 2014

11. Overview of industrial CO2 emissions, split by functional use
FIG 3:
Overview of industrial CO2 emissions, split by functional use
Emissions per sector, estimated Mton CO2/yr, 2014
Total1 22 12 11 6 16 67 1 1 2 7
Process emissions 4
High temperature heat production at one steel plant is industry’s largest CO2 emissions source 1 1 12
On site transport 3 6 5 7 19
Electricity (e.g., machine drive) 10 6 2 22
High temperature heat
Ammonia and ethylene production result in 11 MT of process and heat-related emissions 1 4 3 14
Mid temperature heat 4 2 2 4
Low temperature heat 1 1
Nearly every sector produces emissions by generating low-and medium-temperature heat
Chemicals
Iron and steel
refining
Food processing, beverages and tobacco
Other industries
NOTE: Difference in totals due to rounding
1 Emissions from biomass are excluded; 2 On-site transport not allocated to specific sectors
SOURCE: Manufacturing Energy Consumption Survey (2013); National Inventory Report (2016); expert interviews; CE Delft Denktank energiemarkt Industrielewarmtemarkt 2013; expert interviews

12. FIG 5:
Assumed impact on industrial
CO2 emissions by 2040
Six ways to move industrial decarbonization forward – reaching 60% by 2040
Assumed impact electricity related
emissions (excl. from baseline of 45 Mton)
60% reduction compared to 1990 levels progressing all options
MtCO2, 2014 – 2040
Theoretical maximum and minimum potential by 2050
Options
Energy efficiency 3
Electrification of heat demand
Change of feedstock
Develop routes to reuse and recycle materials
Decide on steel production route(s) 6
Develop CCS/U capabilities
Total reduction
19.6 4 23
SOURCE: Centraal Bureau voor de Statistiek (2014), “Energiebalans” and “Energieverbruik” databases, National Inventory Report ( )

13. FIG 6:
Following these measures, energy demand is reduced by 15% and CO2 emissions by 46% (>20 Mton)
Industry energy demand, incl. feedstock, PJ
Industrial direct CO2 emissions, Mton CO2
Kunen we hier verschillende t9nten blauw doen per industry? En dan de kolommen wel in zelfde kleurstelling?
14071 45
-12%
-17%
1,237
1,166
-46%
Chemicals
-74% 24
Petroleum refining 12
Iron and steel
beverages and tobacco
Other industries
2014
2040
60% CO2 reduction
2050
80% CO2 reduction
2014
2040
60% CO2 reduction
2050
80% CO2 reduction
1 840 PJ of energy demand and 567 PJ of feedstock. Data used in our previous report is based on a preliminary publication of the energieverbruik and energiebalans numbers of CBS, which is shown here and adds up to 840 PJ energy consumption for industry. The final CBS reporting on energieverbruik and energiebalans adds up to 833 PJ
SOURCE: CBS-data for 2014

14. Industry transition in the Netherlands – the missing link
October 2017

15. Back up

16. Power sector: “80% renewable power supply” by 2040 would be needed illustrative scenario, other choices also possible
Wind
62% of production
Solar
12% of production
Biomass 8%
~63 million solar panels2
Third of current roof area
8,500 kton dry biomass3
Conversion of existing coal plants to biomass
~11 thousand turbines1
6% of Dutch North Sea
Flexibility measures
As illustration, 5 GW of (seasonal) storage
33 GW
21 GW
4 GW
~120 km2
3,500 km2
1880 km2
5 GW
Other choices would also be possible, e.g. with larger role for (coal/gas) CCS, imports
1 45% capacity factor, turbines of 3 GW m2 per solar panel, 235 kW MJ/kg biomass, 2 ktons/km2

17. At our current pace, we will finish the remaining carbon budget within 30 years
Carbon budget compared to carbon reserves
2°C Carbon budget emissions to 2100, bn tonnes CO2e
3,670
3,000-5,400
Gas, unconventional
Gas, conventional
Oil, unconventional
Oil, conventional
Coal
At current pace budget runs out before 2050
~900
~900
2°C carbon budget
CH4/N2O/F, CH4/N2O/F,
Carbon reserves
2°C carbon budget
Historical emissions
Future emissions
SOURCE: Team analysis

18. Four major levers are needed to enable the energy transition
Final energy consumption1,2, 2013 and 2050, in EJ
640
431
Increasing energy efficiency limits the rise of energy consumption
CCS/U decarbonizes the use of fossil fuels3
373
Fossil fuels
Switch to zero emission energy carriers, e.g., electricity or hydrogen
Power sector – Fossil fuels
Power sector – Renewables
Biomass and waste
Renewables replace fossil fuels
2013
2050
1 Final energy consumption within the 2oC scenario of the IEA
2 Increase of energy demand is determined via the relative increase of CO2 emissions w/o energy efficiencies
3 The fossil fuels amount processed using CCS/U was determined to be 25% of the total amount of fossil fuels by relating the CO2 emission reduction compared for the 2DS and 6DS scenario
4 The fossil fuel power sector also includes nuclear energy
SOURCE: Source: IEA ETP 2016

19. Fig voor Box section:
Options can create additional value for the Netherlands – but do not outweigh their investment in absence of global CO2 price
Near positive business case
New economic activity
Drive change in energy system
Roll out with support
Create optionality in mid temperature heat: Help balance grid and further integrate intermittent renewables
Efficiency: relatively positive business cases
Scale up
CCS/U: Build on well-developed, diverse offshore industry and chemicals industry
Reuse and recycling: Leverage unique transport and logistics capabilities, in combination with chemicals industry
Bio-to-Chem routes: Build on both agriculture and food capacilities as wel as chemicals and refining experience
Innovation
Electrolysis R&D: Hydrogen to help balance and buffer the energy system
Further electrification: help drive change in energy system
Steel route(s): different routes will either impact economy activity (e.g. CCS/CCU) or help change the energy system, or both (e.g. EAF or H2-based DRI)

20. The challenges … International context of majority of industrials
Brown field, not green field
Opex – not capex

21. …but also opportunities for the Netherlands
Leading position of Dutch industry – cherished investment
Dense, varied clusters – infrastructure and circulariry
Innovative food and agri sector – high end bio-to-chem
Logistics infrastructure – ability to recycle at scale
Stable and well connected energy system