future view

“Energy prices have to rise in times of scarcity”

25 February 2016 • 3 min reading time

The Netherlands intends to convert to green energy. But what happens on a day when there’s no wind, and the sun isn’t shining? In an interview with Annelies Huygen, senior researcher for TNO, we discuss the problems and their solutions in the transition of energy supply.

When the sails of windmills spin frantically in the wind and the sun blazes more than ever, we need either to use this energy immediately, or to store it so it is not lost. ‘This can be done on a big scale, such as converting electricity in large power stations into gas, and vice versa. Or on a small scale, by recharging electrical vehicles in the neighbourhood, explains Huygen.


The integration of energy systems is also a way to bring relief. In most districts, electricity, gas, and thermal energy supplies are separate systems. By linking them together, a shortage in one source of energy can be compensated by the other systems. ‘For example, you could use biogas if there is insufficient electricity supply’, explains Huygen. ‘At other times electricity can be converted into thermal heating.’

"For example, you could use biogas if there is insufficient electricity supply"


The ideal storage method has yet to be found, and creating this system integration remains quite difficult. A promising way to make the inconsistent supply of green energy manageable is through demand-side management: making its price dependent on supply encourages consumers and industry to adjust their energy consumption.
‘All manner of processes that require the use of energy can begin a couple of hours earlier or later without causing problems’, explains Huygen. ‘For example, there are processes in horticulture, factories, and cold-storage depots, not to mention the recharging of electrical vehicles and the operation of a water pump. By using ict peak demand for energy can be levelled off, and off-peak supply utilized more.’


One of the big issues for energy transition is whether the energy required can be better produced centrally or locally. Is it useful to build a windmill in every neighbourhood and smother all roofs with solar panels? Or is the future more about big-scale windmill parks? ‘As yet, we don’t know the answer’, says Huygen.
‘In the coming years we will need both small-scale and large-scale systems. For the interim period, conventional and sustainable energy sources will complement each other. These hybrid systems need to be efficiently organized, so that we can switch to sustainable energy at a quicker pace.’

"For the interim period, conventional and sustainable energy sources will complement each other"


t sounds obvious, but Huygen is the last person to sit idly by and await the outcome. In fact, she believes that there is a need to experiment much more with small-scale energy production because only then is it possible to make a well-reasoned choice ‘At the moment, small-scale initiatives are not being given much of a chance. There are often interesting innovations on the drawing board, but there are all sorts of rules and regulations that pose a problem for implantation at a local level.’


Laws and regulations governing energy supply are still based on the old system, under which large power stations generate power from fossil fuels. This means that consumers have few opportunities for exchanging electricity supply with each other. They barely profit at all from the difference in prices between periods of over-supply and periods of scarcity. There are still a lot of rules standing in the way of creating integrated installations at local level.


Energy tax is also a significant financial disincentive in terms of local energy production, explains Huygen. ‘If you want to put solar panels on your roof, you don’t pay energy tax on what you produce for yourself. But if as a community you produce solar energy together, you are suddenly in line for all this tax. Business cases for clean, local initiatives are often unfeasible due to the tax payable on solar energy.’


The solution, says Huygens, is actually quite simple: tax the emissions of carbon dioxide instead of energy. That way, the biggest polluters pay the most tax. ‘At present, the more energy you use, the less tax you pay. That’s just weird.’

"At present, the more energy you use, the less tax you pay. That’s just weird"


Updating old regulations is a help, but it isn’t enough to prepare the Netherlands for this energy transition. For example, to give demand-side management a chance to succeed, bigger price differentials, based on supply and demand, are essential. At the moment we lack these, because the Netherlands has an over-capacity of conventional energy supplies from coal and oil power stations. ‘For as long as energy prices don’t surge due to scarcity, there will be no urgency’, says Huygen. ‘And whilst there are more and more people coming to realize the need for this energy transition, until there is a business case for this transition, it remains difficult. However, if we wait until our over-capacity disappears, then it may be too late.’


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