Innovation and institutional change: the transition to a sustainable ...

Evolution of decentral cogeneration in the Netherlands 135
where to construct new and larger power plants based on relatively cheap
gas 8 with higher efficiency that enabled stable electricity prices, energy
companies were forced to think about improving efficiency and energy
saving under volatile price conditions and slowing demand. Securing energy
supply through resource diversification and reducing energy consumption
through energy saving were the pillars under the changed energy policy in
the first energy paper, which in fact was the first government attempt to
develop a more comprehensive energy policy (TK, 1974). Initially, decentral
cogeneration was not on the agendas of electricity companies and
government but the focus was foremost on central cogeneration with district
heating 9 . This changed when the energy council, founded in response to the
first energy crisis, pointed out the potential of industrial cogeneration for
energy saving and proposed a range of measures to realise this potential 10
(AER, 1978). The council had heterogeneous membership with
representatives from industry, civil society, science and the electricity sector
and was less biased to the existing configuration dominated by monopolistic
behaviour of electricity companies. A specific committee on industrial
cogeneration was formed by the Ministry of Economic Affairs to assess
impediments for industrial cogeneration more in detail and to develop
recommendations to overcome these obstacles (EZ, 1980).
Mobilisation of actors for alternative routes
The second oil crisis accelerated policy change in favour of decentral
cogeneration due to skyrocketing energy prices. Energy saving was central
to the second white paper on energy policy and significant contributions
were planned by central cogeneration through district heating, and by
decentral industrial cogeneration (TK, 1979). Policy change both involved
8 After discovery of the large Slochteren gas field in 1959 in the North of the Netherlands
gas was offered at relatively advantageous prices. This policy changed to a prudent use of
gas after the oil crisis. In the first energy paper of 1974 also a link of the gas price to the
oil price was announced, and no new gas contracts for electricity generation were settled,
except for highly efficient plants, such as combined cycles of gas and steam turbines
(CCGT) (TK, 1974; Bläsing, 1992; Vlijm, 2002). For example, in 1976 the Donge CCGT
power plant was brought into use with an efficiency of 44% (Bläsing, 1992: 331). Steam
turbines reached efficiencies of 35 to 40% (VDEN, 1980; SEP, 1994; Hofman and
Marquart, 2001).
9 A committee was set-up in 1975 to investigate the potential of district heating. Although
the SEP was initially sceptical regarding the economics of district heating, in light of
energy saving targets, government pressure, and growing insights regarding the potential,
from 1977 on 16 large scale district heating projects were initiated. The focus on larger
scale was expected to improve the cost picture.
10 Relevant to note is that two decades earlier the high efficiency of decentral cogeneration
relative to central generation was already reported but largely ignored by the electricity
sector and government (Buiter and Hesselmans, 1999; Verbong et al., 2001).