From natural gas to a green transition: how the Netherlands ended a sixty year long relationship

  1. Rapid transition to clean energy is possible even where a whole country has become quickly reliant on fossil fuels. The total dominance of gas left the Netherlands with few choices, but the government learned from this mistake and its multi-pronged, diverse approach to replace gas now draws on a wide range of renewable technologies.
  2. Public outrage and organising works. Without the uproar over earthquakes linked to gas extraction and public concern over climate change, the Netherlands’ government would not have been forced to introduce ambitious legislation and targets to shift away from gas.
  3. Think global, act very local. Political devolution in the Netherlands means that technological solutions can be tailored to local needs, where communities can actively shape and maintain the solutions and, as a result, are more enthusiastic and supportive of change. This is vital for the rapid scaling-up of low-carbon alternatives to gas and creating public buy-in for the transition.

Natural gas is to the Netherlands what oil is to the Gulf States: it has completely shaped the country’s economic and industrial legacy. In 1959, the ninth largest natural gas field in the world was discovered in the northern province of Groningen – and within just five years nearly every home in the Netherlands was connected to the gas grid. As of 2018, gas heated nine in every ten homes in the Netherlands, with 38 per cent of total energy consumption going towards heating – a set-up not dissimilar to the UK, where 85 per cent of households use gas to heat their homes.

But as gas supplies began to run out, companies turned to fracking, and a series of earthquakes rocked the country. Protests erupted, and by 2019 the government had announced it would go completely gas-free by 2050 and halt domestic production by 2030, possibly as early as 2022.

The Netherlands’ government looked to leave up to €66 billion (£58 billion) worth of fossil fuels in the ground – a monumental shift that would drive the decarbonisation of the country’s wider built environment. So how did this shift come about?

A brief history of energy transition in the Netherlands

Despite its clean-living image of bicycles and windmills, the Netherlands hugely exploited its discovery of gas in 1959. The government and industry strove to use as much gas as possible, driven partly by the belief that cheap nuclear energy was about to sweep the continent. Meanwhile, the ubiquity of gas and relative affordability enabled farmers to heat kilometres of greenhouses cheaply, making the Netherlands the second largest agricultural exporter in the world after the US with just a fraction of the land. In 2013 Royal Dutch Shell topped the Fortune Global 500 list of the world's largest companies, with a revenue equal to 84 per cent of the Netherlands’ GDP.

However, the Netherlands is running out of gas – output fell to 52 billion cubic meters in 2019, the lowest level since the early 1970s. Attempts to remove harder-to-reach reserves using fracking caused underground disruption that damaged thousands of homes: one local survey found that 152,000 homes (and 18,000 other buildings) needed to be reinforced at a cost of many billions of Euros. A group of farmers then launched a legal challenge, demanding that the extraction companies pay for damage caused by their activities. By 2018, just over a billion Euros had been earmarked to cover damage claims, with the Dutch state footing the bill for 64 per cent of the costs.

In 2017 the extraction company NAM, a joint venture between Royal Dutch Shell and US oil giant ExxonMobil, called for gas profits to be poured into the deployment and scaling-up of Dutch renewable energy capacity. The same year, the Netherlands’ government banned the installation of gas heaters in new homes and the city of Amsterdam declared it would be gas-free by 2050. The Netherlands now aims to be powered 100 per cent by renewables by the middle of the century.

The initial momentum for an energy transition started seriously with the Energy Agreement for Sustainable Growth, a 2013 project bringing together government, industry, trade unions and the third sector to scope and shape plans for the country’s energy transition. Further agendas were published in the following years, before the Netherlands drew up its national climate commitments in 2018, again working with labour unions, NGOs, business associations and local authorities to shape targets.

Key aims of the commitment include:

  • From 2020, new homes should be almost energy-neutral, meaning they will generate as much energy as they use
  • 300,000 existing homes and other buildings should be made energy-efficient every year by a consortium of the construction, engineering and energy sectors
  • Creating an Energy Performance Incentive Scheme for the rental sector, including a special fund to help landlords improve the energy efficiency of their properties.
  • From 2018, all new government buildings should be nearly energy-neutral

nearly energy-neutral

‘Nearly zero-energy building’ is a term defined within the Energy Performance of Buildings Directive with further advice given in the European Commission Recommendation (EU) 2016/1318.

Cross-industry coalitions

Change happened across industries: in the energy sector, where a coalition recommended that no gas-only boilers should be installed in homes; in construction and housing, where an initiative aimed to disconnect 100,000 houses from the gas grid by 2021; and in retail, with supermarket chain Lidl disconnecting all of its 410 Netherlands stores from the gas grid in just four years.

For those who work as installers, there is also relief: the Netherlands government has also promised to train 6,000 more engineers to help support emerging markets. The fact remains, however, that to hit ambitious climate targets, between 30,000 and 50,000 homes need to be disconnected from gas every year up to 2022, 200,000 homes a year thereafter. Time will tell if the country can move quickly enough.

This was accompanied by a shift in consumer awareness. Electric cooking hobs made up 73 per cent of total hob sales in 2018, up from 58 per cent the year before, with similar trends in heating – sales of heat pumps increased by 27 per cent in 2018, in part because of government subsidy and tax relief schemes.

In the Netherlands, residential heating is still responsible for around 10 per cent of annual carbon emissions (compared to 15 per cent in the UK) – a sizable chunk relative to other sectors of the economy. The challenge of decarbonising this residential heating system offers a unique opportunity to redesign and overhaul the ownership structures of energy generation and distribution, however: district heating networks, where heat is transmitted from a centralised source through a network of insulated pipes to multiple buildings, present an opportunity to create energy cooperatives and local transition networks that give local people a greater say in their own energy system, and encouraging microgeneration of renewable power can help alleviate the fuel poverty that affects just under a million Dutch households.

The Netherlands’ high population density and widespread use of low-rise apartment blocks often makes district heating the sensible choice – some estimates forecasting that district heating can replace gas for around half of Dutch homes. District heating does not usually require a monumental retrofitting and insulation programme to improve the energy efficiency of each home and residential apartment block, making it perfect for decarbonising older neighbourhoods.

These systems could be fueled by waste thermal energy from heavy industry, waste processing facilities, geothermal plants, and even data centres and ice-skating rinks. However, this brings its own risk of an overreliance on thermal sources: if a district heating network is being powered by the waste thermal energy from local industry, then problems may arise when that industry moves away or innovates.

Protest and dissent

Public support and dissent play a key role in this story. The government’s botched response to fracking-induced earthquakes, the destruction they caused, and the limited amount of money set aside to address the damages, lit a fuse among the public. With a growing sentiment that the fight against climate breakdown should be ramped up, a substantial portion of the population was galvanised to demand change.

Despite various geopolitical shifts, a wholesale move away from gas would have been impossible without the public protest, organising and political contesting of the affected communities. Protest completely shifted the debate concerning the ‘necessity’ of gas, shedding light on the entanglement between the state and oil and gas companies such as ExxonMobil and Royal Dutch Shell at the same time.

In 2019, the Supreme Court also upheld previous decisions in a climate case brought by the environmental group Urgenda, finding that the government had obligations to urgently and significantly reduce emissions in line with human rights policies. It has, accordingly, introduced a series of legislation at national and local levels, with targets for the short term (2021), near term (2030) and long term (2050).

The benefits of devolution

The devolution of local government in the Netherlands is another key factor in the shift away from gas – having the flexibility to tailor solutions to each location is crucial to getting community engagement and support, and ensuring the successful longevity of transition.

In 2016 the government directly engaged with citizens on questions of energy transition and how to further decarbonization efforts, all the way up to 2050, through its Energy Dialogue. While this form of consultation differs from the UK’s more recent Climate Assembly, it was effective in opening up a dialogue and empowering citizens to think about energy transitions and their impact upon the lives of families and communities.

Some provinces are even running competitions to galvanise local business and communities into helping to devise efficient alternatives to gas. Gelderland, for instance, launched a €5 million award to the municipality with the most effective plan to get neighbourhoods off gas. Local energy cooperatives are also emerging to provide guidance on ‘gas-free living’ and energy demand reduction.

Looking to the future

Fortunately, there is a range of available technologies and solutions to replace Dutch gas dependence, and local governance structures allow each neighbourhood and home to have a solution tailored to its needs to ensure performance, efficiency and economy. For instance, the existing gas infrastructure is well suited for the burgeoning green hydrogen industry, with Europe’s largest green hydrogen project already underway in Groningen. All of the current solutions being brought to market in the Netherlands are supported too by a range of financial mechanisms, such as grants and subsidies, to accelerate roll-out and consumer uptake.

In short, the Netherlands’ example challenges notions that natural gas is a long-term energy solution, showing that with the right level of ambition, stringent climate legislation and an engaged public, removing gas completely is possible. Although natural gas is often thought of as a bridge fuel, it’s clearly a bridge to nowhere. As the President of the European Investment Bank, Dr Werner Hoyer, succinctly put it: “gas is over”.