Transition to sustainable energy remains financially feasible, but cost distribution is key

First integrated overview of the costs of the energy transition

The Kick‑off Report on the Integral Cost Picture of the Energy Transition (EIK), part of a multi‑year research programme, together with the TNO prototype study INKTVIS, provides, for the first time, an integrated overview of existing knowledge on the costs of the energy transition. This includes:

• system costs (all costs required to produce, transport, store and use energy)
• investments (for example in electricity grids and renewable energy such as wind and solar)
• economic impacts
• differences in costs and benefits for households, businesses and government

Until now, a comprehensive economic overview was lacking, as studies used different definitions, assumptions and system boundaries. Bringing this knowledge together creates a more consistent picture of the economic interdependencies within the energy transition.

Significant investments required

According to the report, the energy system is undergoing fundamental change. The Netherlands will use more electricity and become less dependent on fossil energy imports. This requires substantial investment in electricity grids, heat pumps, renewable energy and electric mobility. Between 2019 and 2023, investments in these areas already increased by approximately 60%. Overall system costs are rising only moderately.

A key insight is that the cost structure is shifting: where fuel costs currently dominate, investment in infrastructure, generation, flexibility and end‑use is becoming increasingly important.

Impacts differ across households and businesses

Households and businesses that are able to invest in sustainability often benefit from lower energy costs. Those who cannot face higher costs. Differences are also significant within industry: energy‑intensive sectors such as chemicals and steel are more likely to face higher costs and increased competitive pressure.

These differences do not only occur between households and businesses, but also within these groups. For households, factors such as housing type, mobility patterns, energy intensity and investment capacity play an important role. For businesses, outcomes depend on sector characteristics, production processes, electrification potential and capital intensity.

Need for further knowledge

The Kick‑off Report on the Integral Cost Picture of the Energy Transition also highlights existing knowledge gaps. Addressing these gaps will help governments, businesses and households make better‑informed decisions about the future energy system, including long‑term economic impacts and the distribution of costs and benefits.

The report is not a final assessment, but a starting point. It clarifies where insights are robust and where uncertainty remains, requiring further analysis and refinement.

Project INKTVIS: first quantitative prototype

Within the INKTVIS project (in Dutch), TNO is working with partners to develop a first quantitative prototype of an integrated cost picture of the energy transition. The project develops an initial calculation framework that links different economic perspectives: system costs, impacts on end users and implications for government.

The analysis builds on existing scenarios, including those derived from the OPERA optimisation model.

This work is carried out as part of the multi‑year EIK research programme, which aims to provide policymakers with better insight into the implications of energy system choices.

About the programme

The Integral Cost Picture of the Energy Transition (EIK) is a multi‑year research programme designed to improve understanding of the economic impacts of the energy transition.

EIK is a collaboration between:

• Netherlands Enterprise Agency (RVO)
• TNO
• Netherlands Bureau for Economic Policy Analysis (CPB)
• Statistics Netherlands (CBS)
• Netherlands Environmental Assessment Agency (PBL)