TenneT's security of supply report (May 2024) warns of potential problems with the security of electricity supply in the Netherlands in 2033. This is due to a combination of growing electricity demand and a larger share of solar and wind power in the electricity mix. The decline of controllable generation capacity, such as gas-fired power plants, and the limited supply of other forms of flexibility contribute to this threat. This problem is also visible in other Northwest European countries, which increases the urgency to address this issue.
In the current situation, coal and gas plants are the main controllable power. However, with the ban on coal power starting in 2030, by 2033 the Netherlands will rely on renewable energy, imports from surrounding countries, gas power plants and battery storage to meet demand. About 9 GW of gas power plants are expected to be operational in 2033, down from the current 12.5 GW. There is a risk that the number of available gas power plants will decline more or less simultaneously, which could seriously threaten security of supply.
The TEACOS model used in the report calculated that the Netherlands will need 23 GW of controllable power in 2033, or 37.6 TWh on an annual basis (for 3,798 hours). This means that the Netherlands will depend on imports, gas plants or industrial demand-side management 40% of the time. Interconnection capacity for imports is an important resource at 13.8 GW, but the availability of imports at times of scarcity is not guaranteed due to competition from other countries and geopolitical risks.
Battery capacity is seen as a complementary solution, but can only contribute for short periods and is limited by technical and market uncertainties. The remaining need for controllable power must be met by gas power plants, as the other options do not provide sufficient capacity.
The cost of shutting down or shifting in time industrial production, especially when it becomes mandatory, can be high and negatively impact businesses and households. Capacity mechanisms have been introduced in surrounding countries, where availability is rewarded. This option could also help in the Netherlands to ensure security of supply at lower social costs.
The report recommends the creation of an "insurance premium" for keeping regulable generation capacity available, especially in the form of gas plants, through, for example, a capacity mechanism. This should help prevent the Netherlands from becoming dependent on unreliable imports and the expensive demand-side management option. It is also suggested that security of supply be looked at more broadly, taking into account not only the costs of demand-side management but also the impact on value chains, investments and the affordability of energy for households and businesses.
