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Jochem van Gaelen - 6000 Mw Wind at Sea - IIAS

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<strong>6000</strong> <strong>Mw</strong> <strong>Wind</strong> <strong>at</strong> <strong>Sea</strong> by 2020:<br />

Improving government policy to better support the development of current and future<br />

Name: J.E. <strong>van</strong> <strong>Gaelen</strong> MSc<br />

Student nr: 5683297<br />

offshore wind parks<br />

Email: j.e.<strong>van</strong>gaelen@student.uva.nl<br />

Telephone: +31 (0) 626692369<br />

University of Amsterdam<br />

Faculty of Behavioral and Social Sciences<br />

MSc Thesis Political Science, Intern<strong>at</strong>ional Rel<strong>at</strong>ions<br />

Supervisor: Dr. M. Amineh<br />

2 nd Supervisor: Prof. J. Gupta


Table of Contents: 2<br />

List of Figures & Tables 4<br />

List of Abbrevi<strong>at</strong>ions 5<br />

Acknowledgements 6<br />

Map of the European Union & The Netherlands 7<br />

Chapter 1 – Introduction & Background 8<br />

1.1 Introduction 8<br />

1.2 Theoretical Framework 14<br />

1.3 Methodology 19<br />

1.4 Organiz<strong>at</strong>ion of the work 20<br />

Chapter 2 –<br />

Prospects for renewable energy in the EU and the Netherlands,<br />

the role of offshore wind 21<br />

Introduction 21<br />

2.1 Resource Scarcity 21<br />

2.1.1 Demand-Induced scarcity 22<br />

2.1.2 Supply induced scarcity 26<br />

2.1.3 Structural scarcity 31<br />

2.2 Renewable energy (EU) 32<br />

2.2.1 <strong>Wind</strong> energy in the EU 34<br />

2.3 Offshore wind energy in The Netherlands 37<br />

2.4 Clim<strong>at</strong>e Change 42<br />

2.5 Conclusion 44<br />

Chapter 3 – Offshore <strong>Wind</strong> Energy: Policy in the Netherlands<br />

Introduction 46<br />

3.1 – Renewable Energy in the Netherlands – “Schoon & Zuinig” 46<br />

3.2 – Offshore <strong>Wind</strong> Energy in the Netherlands – 950 MW by 2010 50<br />

3.3 – <strong>Wind</strong> Energy in the Netherlands – A Multi Stakeholder Approach 53<br />

3.3.1 – Stakeholders 55<br />

3.3.2 – Problems with government policy 58<br />

3.4 – New policy cre<strong>at</strong>ion for offshore wind parks 62<br />

3.5 – Conclusions 69<br />

Chapter 4 Technological Innov<strong>at</strong>ion System for Offshore <strong>Wind</strong> Energy Policy<br />

Introduction 71<br />

4.1 – TIS for Offshore <strong>Wind</strong> Energy Policy 71<br />

Step 1- Define TIS in focus 72<br />

Step 2- Actors, Networks, Institutions 72<br />

Step 3 – Mapping the functional p<strong>at</strong>tern of the TIS 73<br />

Step 4 – Determine functionality and set process goals 80<br />

Step 5 – Identify Inducement & Blocking mechanisms 82<br />

Step 6 – Specify Key policy issues 85<br />

4.2 – Conclusions 86<br />

2


Chapter 5 – Conclusions<br />

5.1 – Conclusions & Recommend<strong>at</strong>ions 87<br />

5.2 – Limit<strong>at</strong>ions & Suggestions for further Research 89<br />

Bibliography & References 90<br />

Appendix I - Overview Wbr legisl<strong>at</strong>ion & Offshore Initi<strong>at</strong>ives 94<br />

Appendix II - Sectorakkoord Duurzame Energie<br />

Appendix III - Transcript Interviews<br />

Appendix IV - Estim<strong>at</strong>ed & Projected world popul<strong>at</strong>ion<br />

Appendix V - Regional Production & Consumption of Oil<br />

Appendix VI - Regional Production & Consumption of Gas<br />

Appendix VII - Share of electricity produced from renewables in %<br />

Appendix VIII - Growth <strong>Wind</strong> Energy Capacity in NL (MW)<br />

Appendix IX - Conclusions Kosten-B<strong>at</strong>en Analyse <strong>6000</strong> MW in 2020<br />

3


List of Figure & Tables<br />

Figures:<br />

Figure 1.1 – Number of applic<strong>at</strong>ions for wind parks in the North <strong>Sea</strong> 10<br />

Figure 1.2 – TIS scheme 17<br />

Figure 2.1 - EU Gross Inland Consumption (Energy Mix in M toe, %) – 2006 21<br />

Figure 2.2 - Average annual growth r<strong>at</strong>e of the world popul<strong>at</strong>ion, 1750 – 2050 23<br />

Figure 2.3 - GDP growth per region, PPP per capita 24<br />

Figure 2.4 - China’s Oil Production and Consumption, 1986-2006 26<br />

Figure 2.5 – Oil, Proven Reserves per region 27<br />

Figure 2.6 – Proven reserves for Gas per region 29<br />

Figure 2.7 – Energy dependency per country, EU 2006 30<br />

Figure 2.8 – Oil and gas reserves and expected d<strong>at</strong>e of exhaustion 31<br />

Figure 2.9 - Development of primary production from renewables in EU -27 (2000-2006) 33<br />

Figure 2.10 - <strong>Wind</strong> Energy Annual Install<strong>at</strong>ions 2000-2020 in EU(in GW). 34<br />

Figure 2.11 - EU electricity from <strong>Wind</strong> up to 2030 (in GW & TWh) 35<br />

Figure 2.12 - Development of renewable energy sources in the Netherlands by source 39<br />

Figure 2.13 – <strong>Wind</strong> Resource Map – EU 40<br />

Figure 2.14 – Capacity of Dutch <strong>Wind</strong> Energy by source (in MW) 40<br />

Figure 2.15 – Monthly Carbon Dioxide Concentr<strong>at</strong>ion in the <strong>at</strong>mosphere, 1952 – 2009 42<br />

Figure 2.16 – Global Air temper<strong>at</strong>ure, 1860 – 2008 43<br />

Figure 3.1 – Stakeholders in offshore wind energy 55<br />

Figure 3.2 – Stakeholders in Offshore <strong>Wind</strong> Energy – Noordzeewind 58<br />

Figure 3.3 – Stakeholders in Offshore <strong>Wind</strong> Energy - NWEA 59<br />

Figure 3.4 – Stakeholders in Offshore <strong>Wind</strong> Energy – N<strong>at</strong>uur&Milieu 60<br />

Figure 3.5 – Stakeholders in Offshore <strong>Wind</strong> Energy – TOW 62<br />

Figure 4.1 – TIS Scheme 71<br />

Figure 4.2 – Stakeholders in Offshore <strong>Wind</strong> Energy 73<br />

Figure 4.3 – TIS for offshore wind energy policy 82<br />

Tables :<br />

Table 2.1 – <strong>Wind</strong> Power installed capacities in the EU <strong>at</strong> the end of 2008 36<br />

Table 2.2 – <strong>Wind</strong> Offshore – Power installed capacity in the EU <strong>at</strong> the end of 2008 (in MW) 37<br />

Table 2.3 – Import and Export Balance of the Dutch Energy Mix (2008) in Petajoule 38<br />

Table 4.1 – Actors, Networks & Institutions in the TIS<br />

Maps:<br />

Map 1.1 – The European Union & The Netherlands 7<br />

4


List of Abbrevi<strong>at</strong>ions:<br />

CDM: Clean Development Mechanism<br />

CO2: Carbon Dioxide<br />

ECN: Energie Centrum Nederland<br />

EU ETS: European Union Emissions Trading System<br />

EU: European Union<br />

EWEA: European <strong>Wind</strong> Energy Associ<strong>at</strong>ion<br />

EZ: Economische Zaken (Economic Affairs)<br />

GHG: Greenhouse Gas<br />

IEA: Intern<strong>at</strong>ional Energy Agency<br />

IPCC: Intragovernmental Panel on Clim<strong>at</strong>e Change<br />

IS: Innov<strong>at</strong>ion System<br />

JI: Joint Implement<strong>at</strong>ion<br />

LTO: Land- en Tuinbouw Organis<strong>at</strong>ie (Agricultural Organis<strong>at</strong>ion)<br />

Milieukwalitiet Elektriciteistproductio (Environment Quality Electricity<br />

MEP:<br />

production)<br />

MER: Milieu Effect Rapportage (Envrironment Effect Report)<br />

MKB: Midden Klein Bedrijf (Small & Middle sized Entrepreneurs)<br />

MSP: Multi Stakeholder Processes<br />

MST: Multi Stakeholder Theory<br />

MW: Mega W<strong>at</strong>t<br />

NGO: Non-governmental Organis<strong>at</strong>ion<br />

NWEA: Nederlandse <strong>Wind</strong> Energy Associ<strong>at</strong>ie (Dutch <strong>Wind</strong> EnergyAssoci<strong>at</strong>ion)<br />

OWE: Offshore <strong>Wind</strong> Egmond aan Zee<br />

Q7-WP: Loc<strong>at</strong>ion of Amalia <strong>Wind</strong>park off Ijmuiden, The Netherlands<br />

SDE: Stimulering Duurzame Energie (Stimul<strong>at</strong>ion Sustainable Energy)<br />

TIS: Technological Innov<strong>at</strong>ion System<br />

TOW: Transitie Offshore <strong>Wind</strong><br />

UN: United N<strong>at</strong>ions<br />

UNFCCC: United N<strong>at</strong>ions Framework Convention on Clim<strong>at</strong>e Change<br />

V&W: Verkeer & W<strong>at</strong>ersta<strong>at</strong> (Traffic & W<strong>at</strong>er)<br />

VNO/NCW: Werkgeversbonden (Employer Unions)<br />

Volkshuisvesting Ruimtelijke Ordening & Milieu ( Infrastructure, Spacial<br />

VROM:<br />

Planning & Environment )<br />

Wbr: Wet Beheer Rijksw<strong>at</strong>erwerken (Law for exploiting government property)<br />

5


Acknowledgements<br />

The thesis th<strong>at</strong> lies before you could never have been completed without the help and effort<br />

of several people. First, I would like to thank Dr. Amineh for guiding me through the process<br />

from orient<strong>at</strong>ion towards the finished work. I owe special thanks to the interviewees <strong>at</strong> Shell,<br />

Mr. Huub den Rooijen, mrs. Christine D’Arnaud Gerkens <strong>at</strong> Nuon and Mr. Ed Buddenbaum<br />

<strong>at</strong> the Ministry of Economic Affairs for taking the time to talk to me on the subject and clarify<br />

the direction I needed to take, and colleague gradu<strong>at</strong>es for keeping up healthy academic<br />

competition th<strong>at</strong> kept me motiv<strong>at</strong>ed throughout the thesis.<br />

Last but certainly not least I owe my gr<strong>at</strong>itude to my girlfriend for keeping check on my<br />

progress and helping me to keep a consistent quality in the work and my parents for the<br />

moral support needed for gradu<strong>at</strong>ing a second study.<br />

6


Map 1.1 – The European Union & The Netherlands<br />

7


Chapter 1 – Introduction & Background<br />

1.1 – Introduction<br />

This thesis will focus on offshore wind energy in the Netherlands. The Netherlands have<br />

aligned their energy goals with the 2020 goals th<strong>at</strong> have been specified by the European<br />

Union (EU). The 2020 goals are r<strong>at</strong>ified by the European Council and st<strong>at</strong>e th<strong>at</strong> 20% of the<br />

Europe’s energy must be from renewable sources in 2020. In 2005, 8,5% of the EU energy<br />

came from renewable sources 1 . The Netherlands have committed to the same 20% goal by<br />

2020, the share of renewables in the Dutch energy supply was 2,4% in 2005. Renewable<br />

energy is won from a variety of sources, solar power, hydro-electric power, tidal power,<br />

geothermal energy and biomass and wind power. Of these sources, wind energy is one of<br />

the fastest growing forms of renewable energy, a trend th<strong>at</strong> is expected to continue, making<br />

wind a promising source of energy in terms of capability and further growth. The goal is to<br />

get this percentage up by 20% in 2020, which presents an enormous challenge for the<br />

Netherlands and the EU as a whole.<br />

The 2020 policy and the accompanying goals are set up to effectively deal with the mayor<br />

energy challenges th<strong>at</strong> face the European Union. The challenges are clim<strong>at</strong>e change, the<br />

increasing dependence on the import of energy due to the lack of internal resources, the<br />

strain on energy resources worldwide and access to affordable, secure energy for all users;<br />

these need to be faced in the near future. The goal of the 2020 policy is to develop a low-<br />

energy economy, whilst making the energy sources it has more secure, competitive and<br />

sustainable. Renewable sources of energy offer altern<strong>at</strong>ives for fossil fuels and thereby<br />

reduce greenhouse gas emissions, diversifies energy supply, reducing energy dependency<br />

and reduces the dependency on vol<strong>at</strong>ile fossil fuel markets, these traits make renewable<br />

sources of energy very well suited to deal with the energy challenges the EU faces.<br />

The Dutch government has, in line with the 2020 goals as specified by the EU, the goal to<br />

have one of the cleanest and most efficient energy systems of Europe by 2020. In order to<br />

achieve this, the program “Schoon & Zuinig” is developed, which specifies the goals and<br />

ambitions of the government in the transition to a higher share of renewable energy in the<br />

energy mix. Schoon & Zuinig aligns itself with a reduction of greenhouse gasses and also<br />

embodies energy efficiency and the development of renewable sources in the Dutch energy<br />

mix.<br />

1 EU Energy portal http://www.energy.eu/#renewable (accessed on 25-06-2009)<br />

8


The government has only a limited influence in determining the energy mix in the<br />

Netherlands, and relies on market actors to develop the necessary technologies, invest in<br />

altern<strong>at</strong>ive energy sources, and improve the energy efficiency. The task of the government is<br />

to cre<strong>at</strong>e the right conditions for market actors to step in. Market actors are <strong>at</strong>tracted by cost-<br />

effective projects and sound investment opportunities th<strong>at</strong> renewable energy can offer, aided<br />

by government policy to provide the necessary support. For The Netherlands, the<br />

government cooper<strong>at</strong>es with the energy sector to make a successful transition towards the<br />

use of renewable sources like Biomass, Solar, CO2 storage and <strong>Wind</strong> energy, the most<br />

prominent renewable energy sources for this country. These four options are the most<br />

suitable for the Dutch geography and industry, although CO2 storage is not really renewable,<br />

but a way to decline CO2 emissions by storing CO2 underground, thereby not dealing with the<br />

source but with the result of the problem.<br />

The Dutch government relies on wind energy to be the most prominent renewable energy<br />

source th<strong>at</strong> will contribute to the growth in renewable sources. <strong>Wind</strong> energy will have a<br />

leading role in the development of a clean and efficient economy. <strong>Wind</strong> on land will be<br />

expanded and renewed, and big plans exist for offshore wind energy wind, by doubling<br />

capacity and cre<strong>at</strong>ing new wind parks offshore in the Noordzee (Beurskens en Noord, 2003)<br />

Offshore wind energy has a number of ad<strong>van</strong>tages compared to onshore wind facilities.<br />

Offshore parks offer less visual intrusion and noise pollution. Therefore, wind turbines can be<br />

larger and more productive, also because wind <strong>at</strong> sea is more constant then on land, as wind<br />

speeds are higher and fluctu<strong>at</strong>e less. The space available for the placement of wind parks is<br />

many times larger than on land. However, investment costs are much higher for offshore<br />

facilities, maintenance costs are higher and the technologies for offshore wind farms are<br />

rel<strong>at</strong>ively new, which increases the investment and development risk. The Netherlands does<br />

have the ad<strong>van</strong>tage th<strong>at</strong> the North <strong>Sea</strong> is rel<strong>at</strong>ively shallow in the Netherlands continental<br />

shelf (less then 50 meters), a shallow sea poses less strain on found<strong>at</strong>ions for wind turbines,<br />

thereby adding to the potential of wind energy as a large scale solution.<br />

The goals th<strong>at</strong> have been specified for offshore wind capacity is to have 450 MW of<br />

electricity gener<strong>at</strong>ion capacity in 2010, the next step is to grow to <strong>6000</strong> MW by the year 2020.<br />

This development implies th<strong>at</strong> 15% of the electricity supply of the Netherlands will be sources<br />

from the offshore wind parks. With these goals is mind, two parks were being developed, the<br />

Offshore <strong>Wind</strong> park Egmond aan Zee (OWEZ) with a capacity of 108 MW, th<strong>at</strong> went<br />

oper<strong>at</strong>ional in 2006 and the Prinses Amalia windpark with a capacity of 120 MW th<strong>at</strong> was<br />

oper<strong>at</strong>ional in 2008. Since the development of the parks started, the market actors are very<br />

9


interested in offshore wind as a renewable energy source. The government has recently<br />

increased the 2010 goal of 450 MW by 500 MW, so in line with the new goals, 722 MW must<br />

still be commissioned by 2010.<br />

Illustr<strong>at</strong>ed in Figure 1.1 is the current number of applic<strong>at</strong>ions for offshore wind parks in the<br />

North <strong>Sea</strong>. A large part of the North <strong>Sea</strong> is part of the Dutch Exclusive Economic Zone<br />

(E.E.Z). The area outside of the 12-mile zone are officially intern<strong>at</strong>ional w<strong>at</strong>ers, but Dutch<br />

EEZ, part of the sea th<strong>at</strong> the Netherlands can exploit.<br />

Figure 1.1 – Number of applic<strong>at</strong>ions for wind parks in the North <strong>Sea</strong><br />

Source: Rijksw<strong>at</strong>ersta<strong>at</strong>, 26-02-2009, Kaartnummer: NZWS 2009-0016<br />

10


The two areas in blue are the existing wind parks th<strong>at</strong> are oper<strong>at</strong>ional already, those are the<br />

Offshore <strong>Wind</strong> park Egmond aan Zee (OWEZ), oper<strong>at</strong>ed by Nuon and Shell and the Prinses<br />

Amalia windpark oper<strong>at</strong>ed by Eneco and E-concern. The red and dotted red areas are<br />

military training terrains, shipping lanes, clearways, oil and gas rigs and other areas th<strong>at</strong><br />

have exclusively been reserved and are unsuited for offshore wind parks. The figure shows<br />

th<strong>at</strong> the North <strong>Sea</strong> is used intensively by a large number of different actors. The yellow areas<br />

are new applic<strong>at</strong>ions for wind parks, a total of 17 loc<strong>at</strong>ions for parks are entered by 10<br />

different applicants. These loc<strong>at</strong>ions and the parks th<strong>at</strong> are planned are currently under<br />

investig<strong>at</strong>ion by the government to see if these are viable options. Each of these applic<strong>at</strong>ions<br />

are between 300-500 MW capacity, and the viable parks will be able to compete in a tender<br />

for subsidy and the definitive permit to start construction and development of the park. The<br />

winning initi<strong>at</strong>ives must be finished within 5 years after the commissioning, all the other parks<br />

will be canceled, as a new procedure will be in place from 2010 on to facilit<strong>at</strong>e the move to<br />

<strong>6000</strong> MW in 2020.<br />

The government has committed to develop a new subsidy- and permit policy for wind <strong>at</strong> sea<br />

projects, due l<strong>at</strong>est 2010, to support the energy sector in the road to more sustainability 2 and<br />

the pursuit of <strong>6000</strong> MW capacity. In 2009, no new wind energy parks will be commisioned<br />

and there is even a slight decrease in wind on land capacity. This is due to the legisl<strong>at</strong>ive<br />

problems and the hold on new wind capacity because of the problems the government faces<br />

in developing new procedures and policy to cope with the overwhelming interest in (offshore)<br />

wind. The current procedures have led to a number of problems and are unfit to support the<br />

development needed to reach the goals. There is a lack of cooper<strong>at</strong>ion, transparency and<br />

efficiency in the policies th<strong>at</strong> hamper development by cre<strong>at</strong>ing lack of trust and confidence in<br />

the responsibility of the government to cre<strong>at</strong>e effective rules th<strong>at</strong> will allow market actors to<br />

develop the wind parks and also overloads the departments th<strong>at</strong> deal with offshore wind.<br />

My research focuses on the cooper<strong>at</strong>ion between the energy sector and the Dutch<br />

government and my central point will be to identify how to strengthen the cooper<strong>at</strong>ion by<br />

improving government policy for offshore wind park development in order to reach the<br />

committed goals. The government and the energy market actors have committed to<br />

sustainability goals of cre<strong>at</strong>ing <strong>6000</strong> MW of wind energy capacity <strong>at</strong> sea by the year 2020.<br />

However, a number of problems exist in the policies and the procedures surrounding this<br />

goal. I will look into the current parks and try to improve the government policy to resolve<br />

some important issues hampering the development. The question th<strong>at</strong> I want to answer is:<br />

2 Sectorakkoord Energie 2008-2020, convenant tussen Rijksoverheid en energiebranches in het kader <strong>van</strong> het<br />

werkprogramma Schoon en Zuinig.<br />

11


How can government policy be improved to better support the development of current and<br />

future offshore wind parks to <strong>6000</strong> MW in 2020?<br />

The knowledge and experience gained by the two different off shore wind experiments th<strong>at</strong><br />

are underway, being the Egmond aan Zee Offshore wind park (OWEZ) and the Prinses<br />

Amalia <strong>Wind</strong>park (Q7-WP) off IJmuiden in the Netherlands are used to analyze the current<br />

outlook for offshore wind energy. Using the Resource Scarcity model, Multiple Stakeholder<br />

Processes and the Technological Innov<strong>at</strong>ion System approach, I will compare the results and<br />

outlook of these projects and craft advice on how to optimize the development of offshore<br />

wind parks to meet the goals st<strong>at</strong>ed by the government and the energy sector. The focus will<br />

be mainly on government policies surrounding the offshore wind developments. The current<br />

policies, subsidy programs and permit procedures are unclear, inefficient and take too long<br />

to complete 3 and are as such not suitable for the development and scale needed in the future<br />

park development. Due to the high profile of wind energy and the high interests for<br />

government, the energy sector and society as a whole, wind park development needs better<br />

policy to successfully cre<strong>at</strong>e new capacity and include all stakeholders in the process to<br />

optimize cooper<strong>at</strong>ion and commitment to meet the sustainability goals as pursued by the<br />

government. This thesis will investig<strong>at</strong>e where goals and interest converge and collide, and<br />

will clarify where wh<strong>at</strong> administr<strong>at</strong>ive obstacles exist in the cre<strong>at</strong>ion of more offshore wind<br />

capacity, and how they can be dealt with.<br />

The offshore wind development in the Netherlands is a focal point of EU and Ducth<br />

government policy, and as such has far reaching societal impact, on society as a whole by<br />

influencing the future economy and energy mix and pricing. Both the energy sector and the<br />

government have signed documents to achieve 450 <strong>Mw</strong> <strong>at</strong> <strong>Sea</strong> by 2011, with the <strong>6000</strong> <strong>Mw</strong><br />

as final goal for 2020. The development of offshore parks will influence not only the energy<br />

companies and government, but also shipping <strong>at</strong> the North <strong>Sea</strong>, the environment (by<br />

lowering GHG emissions) as well as the impact of the wind parks on marine life, the aim is<br />

also to cre<strong>at</strong>e a new industry around wind energy for the Netherlands.<br />

The current economic crisis and recession th<strong>at</strong> sweeps across the globe has also affected<br />

the Netherlands. On Thursday the 26 th of March 2009, the Dutch government presented their<br />

crisis agreement, aimed <strong>at</strong> coping with the economic crisis. This plan has also increased the<br />

budget for the subsidy for offshore wind energy and increased the original 450 MW goal in<br />

2010 to 950 MW. The government wants to use the crisis to craft a sustainable and<br />

3 Quickscan Zeekracht – kafka brigade, Augustus 2008<br />

12


innov<strong>at</strong>ive economy, wind energy has an important role in this development. In the coming<br />

15 years, the government is investing another 2,4 billion Euro extra into the offshore wind<br />

parks currently being developed in the North <strong>Sea</strong>. The original goal of 450 <strong>Mw</strong> of wind<br />

energy from the North <strong>Sea</strong> will be increased to 950 <strong>Mw</strong>. The SDE (Stimulering Duurzame<br />

Energie/Stimul<strong>at</strong>ion Renewable Energy), the governments instrument for funding innov<strong>at</strong>ion<br />

and wind development will therefore be expanded and increased 4 . Remarkably enough, <strong>at</strong><br />

the very same time, Shell, one of the major energy company and partner of the OWEZ<br />

project (with Nuon and the Dutch government) has decided to stop investing in wind energy 5 .<br />

These conflicting interests and messages between the various parties involved in offshore<br />

wind parks makes this field a very interesting topic for further research.<br />

<strong>Wind</strong> energy and policy around renewable energy enjoys a high profile resulting in a wide<br />

body of liter<strong>at</strong>ure to broad to introduce here, I will specify some areas of specific interest<br />

rel<strong>at</strong>ed to this thesis. Lund (2007) and Enzensberger et al. (2002) have researched the<br />

effectiveness of policy measures and policy approach in transforming the energy system<br />

towards renewable sources. The Energie Centrum Nederland (ECN) is a word renowned<br />

research institute th<strong>at</strong> has been active in research on all aspects of wind energy. Beurskens<br />

& Noord (2003) have studied the current and future developments of offshore wind parks in<br />

the Netherlands, the UK and Norway. And special target groups issued by the Dutch<br />

government, like the Str<strong>at</strong>egiegroep Transitie Offshore <strong>Wind</strong> (TOW), have already examined<br />

a transition towards the 2020 goals for offshore wind. Maintenance and oper<strong>at</strong>ion costs have<br />

been estim<strong>at</strong>ed (Rademakers et al. 2008) for offshore wind parks, and more research is<br />

being done on the technological challenges facing wind energy <strong>at</strong> open sea. Recently, the<br />

energy transition policy in the Netherlands is studied, signaling the risk of the current<br />

transition str<strong>at</strong>egy to be captured by the energy regime countering the needed innov<strong>at</strong>ion<br />

(Kern, Smith, 2008).<br />

Offshore wind energy is a hot topic of many scholarly, government and industry research,<br />

governments and energy companies make offshore wind parks the spear points for their<br />

policies and str<strong>at</strong>egies. However, the offshore wind energy sector is still in development, and<br />

large scale use of offshore wind parks is a very recent initi<strong>at</strong>ive th<strong>at</strong> needs further study and<br />

growth to evolve and m<strong>at</strong>ure. Therefore, research and policy are very closely intertwined,<br />

which makes any research done in this area interesting, valuable and applicable.<br />

In the advice on wind energy <strong>at</strong> sea, the Str<strong>at</strong>egiegroep Transitie Offshore <strong>Wind</strong> (TOW), a<br />

str<strong>at</strong>egic study group th<strong>at</strong> is part of the general energy transition body of the Dutch<br />

4 Kabinet presenteert crisisakkoord - Volkskrant, 26-03-2009<br />

5 Shell stopt met wind- en zonne-energie - NRC Handelsblad, 18-03-2009<br />

13


government, has clarified the role of the government as the identific<strong>at</strong>ion of the right<br />

requirements for transition. The group stresses a close rel<strong>at</strong>ion with the corpor<strong>at</strong>e sector.<br />

Offshore wind energy is a rel<strong>at</strong>ively new industry with enormous potential. Both government<br />

and corpor<strong>at</strong>e sector lack sufficient experience, and the focus must be on innov<strong>at</strong>ion in<br />

management of offshore wind energy, project technical – and oper<strong>at</strong>ional innov<strong>at</strong>ion.<br />

(Str<strong>at</strong>egiegroep TOW, 2007, p. 20)<br />

1.2 Theoretical Framework<br />

I will use 3 theories to structure my approach on the subject th<strong>at</strong> will allow me to formul<strong>at</strong>e<br />

proposed improvements for policies and legisl<strong>at</strong>ure th<strong>at</strong> will influence offshore wind energy<br />

development. First, I will analyze the energy mix of the Netherlands and Europe in order to<br />

give substance to the energy challenges specified in EU policy and the specific effects for the<br />

Netherlands on their energy supply. The Resource Scarcity Model (Amineh & Houweling,<br />

2007) is used for this, as the model analyzes scarcity of fossil fuels and traditional forms of<br />

energy, thereby analyzing energy dependency and energy security consider<strong>at</strong>ions for the EU<br />

and The Netherlands. These consider<strong>at</strong>ions fuel the development of renewable sources and<br />

wind energy. In order to better understand the problems and drawbacks of the current Dutch<br />

policies and legisl<strong>at</strong>ions I will use the Multiple Stakeholder Processes approach (Hemm<strong>at</strong>i,<br />

2002) th<strong>at</strong> will identify stakeholders and also specifies underlying characteristics of sound<br />

sustainability policy making. This theory enables me to test the policies and their critics using<br />

ground rules and values specified by the theory, thereby being able to examine its quality.<br />

The third theory I will use in this research is the Technological Innov<strong>at</strong>ion System (TIS)<br />

approach (Bergek et al, 2008). The TIS approach is a tool th<strong>at</strong> focuses on the development,<br />

diffusion and use of a particular technology. The approach th<strong>at</strong> I have will use has been<br />

redesigned to be applicable to policy, policy implic<strong>at</strong>ions and to specify policy problems.<br />

Resource Scarcity model<br />

The developments in renewable (wind)energy th<strong>at</strong> are under study in this research have to<br />

be put in context of today’s energy environment, th<strong>at</strong> is domin<strong>at</strong>ed by fossil fuels. The<br />

Resource scarcity model (Amineh & Houweling, 2007) identifies the scarcity of fossil fuels<br />

and traditional forms of energy in three ways. Demand Induced scarcity is scarcity by rising<br />

demand of fossil fuels, and is caused by three effects. The first is popul<strong>at</strong>ion growth in<br />

consuming countries, the second is the rising of per capita income in the developed countries<br />

and the l<strong>at</strong>e industrializing countries (South- and East-Asia). The third effect is technological<br />

change, as industrializ<strong>at</strong>ion has made the access to fossil fuels more important for wealth<br />

14


and power (Amineh & Houweling, 2007, p.375). The strain on the supply of oil and gas<br />

reserves rises because of the increasing number of people depending on fossil fuels.<br />

Supply-induced scarcity is scarcity th<strong>at</strong> develops due to problems on the supply of energy<br />

sources. It is caused by the fluctu<strong>at</strong>ion of the level of known stocks or proved reserves. This<br />

is a form of scarcity is not only caused by economic indic<strong>at</strong>ors like extraction costs, but also<br />

by psychological factors, which makes for a dynamic interplay (Amineh & Houweling 2007.<br />

p.375). Psychological factors are for example the varying anticip<strong>at</strong>ion of future stock levels.<br />

The last form of scarcity, structural scarcity exists when a major power deliber<strong>at</strong>ely cre<strong>at</strong>es<br />

supply-induced scarcity. Control over territories rich in oil and gas are str<strong>at</strong>egic assets, and<br />

rivaling powers have interest in inducing scarcity by gaining access to such territory. A recent<br />

example of structural scarcity is the American invasion in Iraq, which provided the invading<br />

country with access to the rich Iraqi Oil fields.<br />

The interplay of the scarcities in the model provide a framework to analyze the fossil fuel<br />

dependency of the EU, this will illustr<strong>at</strong>e the need for the EU to develop altern<strong>at</strong>ive sources<br />

and forms of energy to enable a stable and affordable energy mix.<br />

By effectively moving into renewable energy sources, the EU aims <strong>at</strong> limiting the influence of<br />

resource scarcity by producing energy from renewables. The goal is to diminish the effects<br />

of scarcity of traditional energy resources and decreasing the EU’s reliance on energy<br />

imports.<br />

Multi Stakeholder Theory<br />

Multiple Stakeholder Processes (MSPs) cover a wide set of spectrums and levels of<br />

engagement. They vary among objectives, issues, scope, time line and participants.<br />

Generally, MSP is used to describe processes which aims to bring together all major<br />

stakeholders in a new form of communic<strong>at</strong>ion, decision finding or decision making structure.<br />

MSPs are based on recognition of the importance of achieving equity and accountability in<br />

communic<strong>at</strong>ion between stakeholders built on democr<strong>at</strong>ic principles of transparency and<br />

particip<strong>at</strong>ion. Succesfull MSPs will aim to develop partnerships and strengthen networks<br />

between and among stakeholders. (Hemm<strong>at</strong>i, 2002, p. 19)<br />

MSP is a very useful approach in <strong>at</strong>taining the common goal of increasing offshore wind park<br />

development, as it can build trust and increase cooper<strong>at</strong>ion in the future between<br />

stakeholders. MSP can put together stakeholders th<strong>at</strong> have expertise in offshore wind<br />

development and cre<strong>at</strong>e mutual benefits, cre<strong>at</strong>e commitment by enabling partners to identify<br />

with the goals, put important issues on the political agenda and cre<strong>at</strong>e clear responsibilities<br />

and also cre<strong>at</strong>e and carry out joint action plans, functions th<strong>at</strong> have been underlined in many<br />

15


esearch (Szarka, 2005, Jacobsson & Bergek, 2004, Kern & Smith, 2008). MSPs can also<br />

promote diffusion of innov<strong>at</strong>ion and develop both incremental and radical innov<strong>at</strong>ion<br />

(Bleiswitch, 2003). I will use MSP theory to identify and test any Multiple Stakeholder<br />

Process already underway, and offer advice on how to redesign or improve MSPs to improve<br />

offshore wind development in the future.<br />

Technological Innov<strong>at</strong>ion Systems<br />

The Technological Innov<strong>at</strong>ion Systems approach stems from Innov<strong>at</strong>ion Systems Theory. An<br />

Innov<strong>at</strong>ion System (IS) is “…The network of institutions in the public and priv<strong>at</strong>e sectors<br />

whose activities and interactions initi<strong>at</strong>e, import, modify, and diffuse new technologies”<br />

(Freeman, 1987). The IS approach comes from the developments in the institutional<br />

economists and evolutional economic theorists, the interdependence recognizes, th<strong>at</strong><br />

physical and social technologies co-evolve, and th<strong>at</strong> this co-evolutionary process is the<br />

driving force behind economic growth (Nelson & Nelson, 1998). The central idea behind the<br />

IS approach is th<strong>at</strong> innov<strong>at</strong>ion and diffusion of technology is both an individual and a<br />

collective act. The IS approach includes firm specific dynamics, technology characteristics<br />

and adoption mechanisms (Hekkert et al. 2002).<br />

An innov<strong>at</strong>ion system is primarily an analytical construct, a tool to better understand and<br />

illustr<strong>at</strong>e system dynamics and performance. Technological Innov<strong>at</strong>ion Systems are socio-<br />

technical systems focused on the development, diffusion and use of a particular technology.<br />

The TIS has been redesigned to focus on policy and policy implic<strong>at</strong>ions within the TIS. By the<br />

functional division, explicitly st<strong>at</strong>ing and including all functions makes for opportunity of<br />

system<strong>at</strong>ically identifying policy problems (Bergek et al, 2008, p.409 ), this focus on policy<br />

problems and the better system<strong>at</strong>ic approach of the TIS approach makes it a valuable tool in<br />

this research.<br />

The TIS approach described a number of functions, which have a direct and immedi<strong>at</strong>e<br />

impact on the development and diffusion and use of new technologies. For this research, the<br />

technology will be offshore wind parks.<br />

16


Figure 1.2 – TIS<br />

Source: Bergek et al (2008) - Analyzing the functional dynamics of<br />

technological innov<strong>at</strong>ion systems: A scheme of analyisis, Research<br />

Policy 37. pp. 407-429<br />

The TIS approach consists of six steps, mentioned in Figure 1.2. In the next section I will<br />

describe the steps and their function.<br />

Step 1: Define the TIS in focus<br />

The first step is the oper<strong>at</strong>ionalis<strong>at</strong>ion of the TIS in focus, in this case offshore wind energy<br />

policy, with specific focus on the Netherlands. I will focus on a knowledge field (as opposed<br />

to a product/artifact) of the policy and the policy improvements. Offshore wind energy is an<br />

industry th<strong>at</strong> is in it’s infancy, large uncertainties still exist in technologies of turbines,<br />

found<strong>at</strong>ions, suppliers of parts, maintenance, connection to the electricity grid etc. Although<br />

these factors are also of grave importance to the success of offshore wind in the<br />

Netherlands, my approach will be on policies and legisl<strong>at</strong>ure, th<strong>at</strong> will need to cre<strong>at</strong>e the right<br />

conditions for the development of the entire industry, including the other challenges I<br />

described earlier. Getting this process optimal for economies to develop is a crucial first step.<br />

Step 2: Identify the structural components of the TIS<br />

The structural components of the TIS are the actors, networks and institutions th<strong>at</strong> are active<br />

in influencing and shaping the Dutch policy for offshore wind parks. I have used extensive<br />

analysis of legisl<strong>at</strong>ure, policies around wind energy as well as published papers on policy<br />

and legisl<strong>at</strong>ure for offshore wind in the Netherlands. Offshore wind enjoys a high profile and<br />

17


eceives a lot of <strong>at</strong>tention in the media, as well as research institutes, industry associ<strong>at</strong>ions<br />

and government (research) agencies. I have conducted interviews with professionals <strong>at</strong><br />

Shell, Nuon and the ministry of Economic Affairs to get a educ<strong>at</strong>ed view on the current and<br />

future policies and I also had contact with the NWEA (Netherlands Associ<strong>at</strong>ion for <strong>Wind</strong><br />

Energy), the leading industry associ<strong>at</strong>ion. This helps me to get a complete picture of the<br />

rele<strong>van</strong>t actors and policies.<br />

Step 3: Mapping the functional p<strong>at</strong>tern of the TIS<br />

The next step is to map the functional p<strong>at</strong>tern of the TIS. The steps mentioned, knowledge<br />

cre<strong>at</strong>ion and diffusion, resource mobiliz<strong>at</strong>ion, market form<strong>at</strong>ion, influence in the direction of<br />

search, legitim<strong>at</strong>ion, entrepreneurial experiment<strong>at</strong>ion and development of external<br />

economies are all traits th<strong>at</strong> will give an overview of the reach, size and scope of the TIS. I<br />

will elabor<strong>at</strong>e on the functions of the TIS in this thesis in Chapter 4.<br />

Step 4: Asses the functionality of the TIS and set process goals<br />

In the fourth step, after we have analyzed how the TIS is working in step 3, we will look into<br />

how well the TIS is performing. Comparing offshore wind policy development to other, similar<br />

processes and taking into account the phase of development of the TIS, we can infer wh<strong>at</strong><br />

the goals for the TIS (offshore wind energy policy) should be, and how we must expect it to<br />

perform.<br />

Step 5: Identify inducement and blocking mechanism<br />

The success of any TIS is not only a result of the inner workings, external dynamics also play<br />

a vital role in the functioning of a TIS. In policy, it is very important to get a good<br />

understanding of the inducement and blocking mechanisms th<strong>at</strong> influence the TIS. I will<br />

device a map of the inducement and blocking mechanisms and their influence on the<br />

functional p<strong>at</strong>tern defined in step 4 of this approach. The result of this analysis will be taken<br />

to the next step.<br />

Step 6: Specify key policy issues<br />

Having now defined the process goals, the reason for setting these goals and how to<br />

measure whether the goals are reached, the key policy goals can be specified, crucial for<br />

achieving the desired functional p<strong>at</strong>tern of the TIS. The blocking and inducement<br />

mechanisms for the desired development of the TIS are analyzed, thereby moving to a<br />

system failure view on policy instead of the traditional market failure approach to policy<br />

form<strong>at</strong>ion. In chapter 4 of this research, the TIS method will be applied to this research.<br />

18


1.3 Methodology<br />

An important part of this research will be comprised of liter<strong>at</strong>ure studies. An abundance of<br />

research and policy papers on off shore wind energy already exists, available through books,<br />

research papers, journals, websites and official government departments. Research into the<br />

development of offshore wind have been conducted and made available via different<br />

sources. For this research, my focus will mainly be on the Netherlands, which housed a gre<strong>at</strong><br />

number of specific research agencies (ECN), lobby groups (Noordzeeloket), university<br />

research programs (Duwind of TU Delft), government departments (Ministerie VROM &<br />

Economische Zaken). Next to this local knowledge I will also include research from leading<br />

scientific journals like Energy Policy.<br />

The broad liter<strong>at</strong>ure study in the subject will be complemented by a number of interviews with<br />

key players in the offshore wind park development in the Netherlands. I contacted<br />

Senternovum, the organis<strong>at</strong>ion dealing with subsidy for wind projects and held interviews<br />

with government officials involved in the policy <strong>at</strong> the Ministry of Economic Affairs. I also<br />

interviewed professionals <strong>at</strong> Shell and Nuon, who are in a partnership together in the<br />

Egmond aan Zee wind park. I used semi-structured interviews (<strong>at</strong>tached in the Appendix III)<br />

as this allowed me to focus on the most rele<strong>van</strong>t aspects for this research, but also allowing<br />

the interviewees to elabor<strong>at</strong>e and expand the area of interest to unearth wider inform<strong>at</strong>ion on<br />

the subject. The downside of this approach is th<strong>at</strong> the interviews and inform<strong>at</strong>ion obtained<br />

there can not be directly compared, however, due to the complexity of the subject and the<br />

different background of the interviewees, this approach will work best in this research.<br />

Unfortun<strong>at</strong>ely, I did not have the chance to interview E-concern and Eneco, involved in the<br />

Prinses Amalia windpark, Q7-WP, due to their bankruptcy.<br />

The liter<strong>at</strong>ure study and interviews will be complemented with d<strong>at</strong>a provided by institutes as<br />

for instance the IEA (Intern<strong>at</strong>ional Energy Associ<strong>at</strong>ion), <strong>Wind</strong> Service Holland (Dutch <strong>Wind</strong><br />

research) the EU and ECN (Energie Centrum Nederland).<br />

19


1.4 Organiz<strong>at</strong>ion of the work<br />

In the next part, Chapter 2, I will discuss energy supply security and clim<strong>at</strong>e change, further<br />

examining the Resource Scarcity model and global energy trends and their impact on the<br />

European and Dutch energy mix and the role of renewables in the energy supply.<br />

The energy dependency and energy security consider<strong>at</strong>ions th<strong>at</strong> the EU will have to face in<br />

the future are an important motiv<strong>at</strong>ion th<strong>at</strong> have shaped the move to renewable energy in<br />

EU policy.<br />

Chapter 3 will have a more specific focus <strong>at</strong> offshore wind development in the Netherlands,<br />

the policies around offshore wind parks are investig<strong>at</strong>ed and a closer look is provided on the<br />

various stakeholders and their interests in further deployment of offshore wind parks to see<br />

how the move to renewable sources of energy has taken shape in the Netherlands. The<br />

problems and critique on these procedures are investig<strong>at</strong>ed and will provide the necessary<br />

input in improvements needed to facilit<strong>at</strong>e the <strong>6000</strong>MW goal in 2020.<br />

In Chapter 4, I will look into the current oper<strong>at</strong>ional offshore wind parks, the Egmond aan Zee<br />

OWE park and the Prinses Amalia (QW-7) park <strong>at</strong> Ijmuiden and the other parks currently<br />

under development. Using the TIS approach focused on offshore wind energy policy I will<br />

define inducement and blocking mechanisms for the cre<strong>at</strong>ion of policy th<strong>at</strong> suits the need of<br />

the government and the other stakeholders involved in offshore wind energy. I will elabor<strong>at</strong>e<br />

on the current situ<strong>at</strong>ion in the priv<strong>at</strong>e/public cooper<strong>at</strong>ion and advice on how to improve the<br />

results in offshore wind development by improving the policies and legisl<strong>at</strong>ure. The last part,<br />

Chapter 5, will present the conclusions of this research, the limit<strong>at</strong>ions of the research will be<br />

explained and suggestions for further research will be elabor<strong>at</strong>ed.<br />

20


Chapter 2 - Prospects for renewable energy in the EU and the Netherlands and the<br />

role of offshore wind<br />

Introduction<br />

In this Chapter I will describe the current energy supply and demand dynamics as they exist<br />

in the world today, with specific focus on Europe. I will structure my approach by applying<br />

assumptions of the scarcity model (Amineh & Houweling, 2007) summarized in Chapter 1.<br />

I will look into the development of the production and consumption of fossil fuels, the<br />

resulting levels of CO2 in the <strong>at</strong>mosphere and global warming. I will examine the effects for<br />

the EU in general and specific focus on the Netherlands, followed by an analysis and outlook<br />

regarding the potential of renewable energy sources. The European perspective is of<br />

importance as the Netherlands has aligned its policies with the 2020 goals as formul<strong>at</strong>ed by<br />

the European Union, th<strong>at</strong> are a direct result of the European energy mix. I will describe the<br />

electricity production and consumption in the EU and the share of renewable sources th<strong>at</strong> is<br />

aimed for. Then I will go into the energy mix and renewable energy potential of the<br />

Netherlands and elabor<strong>at</strong>e on the future for offshore wind as a prominent source of<br />

renewable energy for the Netherlands.<br />

2.1 Resource Scarcity in the European Union<br />

In applying the resource scarcity model I will focus on oil and gas, as these sources of<br />

energy are the most intensively used products in the European energy mix. Oil has remained<br />

the largest source of energy for years, decreasing only 1% from 1990, to 37% in 2006.<br />

During the same period the percentage of gas and nuclear energy increased to 24% for gas<br />

and 14% for Nuclear energy. Together, as illustr<strong>at</strong>ed in Figure 2.1, Oil and gas make up for<br />

61% of the energy mix, renewable only represent 7% of the energy use in 2006. Using the<br />

Resource scarcity model, I will analyze the impact this has on energy supply and security for<br />

the European Union, since oil and gas are scarce resources th<strong>at</strong> are vital to the meet the<br />

EU’s energy demand.<br />

21


Figure 2.1 – EU Gross Inland Consumption (Energy Mix in M toe, %) - 2006<br />

Source: DG Energy and Transport , 2009<br />

Scarcity of n<strong>at</strong>ural resources (oil and gas) is caused by three types of scarcity. The three<br />

types are: demand-induced scarcity, supply-induced scarcity and structural scarcity (Amineh<br />

and Houweling, 2007). Demand-induced scarcity itself is again caused by three factors:<br />

popul<strong>at</strong>ion growth in consumer countries, rise in per capita income in high-income countries,<br />

and technological change (Ibid. p. 375). Supply-induced scarcity is caused by two other<br />

factors, firstly, the dwindling of stock and secondly concern about the stability of supply. The<br />

concern for the stability of supply mainly forms due to political tensions in the region of the<br />

producing countries (for example, the tensions around the Iranian Nuclear Program th<strong>at</strong><br />

might influence oil availability for the West as political tension may cause them to cut oil<br />

supply). Structural scarcity is supply-induced by the deliber<strong>at</strong>e action of a major power, by<br />

non-st<strong>at</strong>e actors such as major oil companies, or by producer cartels such as the<br />

Organiz<strong>at</strong>ion of Petroleum Exporting Countries (OPEC) (Ibid. p.375).<br />

2.1.1 Demand Induced Scarcity<br />

Demand Induced Scarcity is caused by popul<strong>at</strong>ion growth, rise in per capita income and<br />

technological change. In the following paragraphs the development of each of the three<br />

variables is analyzed. Rising demand for energy will increase the pressure on the limited<br />

resources present in the world, this will lead to increased shortage of our primary energy<br />

sources, oil and gas.<br />

22


Popul<strong>at</strong>ion growth<br />

The world popul<strong>at</strong>ion growth reached its peak <strong>at</strong> 2% each year around the 1970s, depicted in<br />

Figure 2.2. Since then, the growth r<strong>at</strong>e has been declining, now the popul<strong>at</strong>ion growth is<br />

around 0.6%. By the middle of the twenty-first century, the popul<strong>at</strong>ion of the world is<br />

projected to be growing <strong>at</strong> an annual average of 0.5 per cent.<br />

Figure 2.2 – Average annual growth r<strong>at</strong>e of the world popul<strong>at</strong>ion, 1750 - 2050<br />

Source: UN St<strong>at</strong>istics D<strong>at</strong>abase, 2008<br />

Nonetheless, the projected World popul<strong>at</strong>ion shows an increase in the coming years. The UN<br />

has estim<strong>at</strong>ed the World popul<strong>at</strong>ion growth using a low, medium and high growth variant. In<br />

the medium variant, the world popul<strong>at</strong>ion is expected to grow to 8.9 billion people by the year<br />

2050 (see Appendix IV). Currently, the world popul<strong>at</strong>ion is around 6 billion. Rise in popul<strong>at</strong>ion<br />

means th<strong>at</strong> an increasing number of people will need to have access to energy sources,<br />

which will increase demand for energy.<br />

Rise in per capita income<br />

Rise in per capita income is the second determinant of demand induced scarcity. This is<br />

measured by Gross Domestic Product (GDP) per capita. Per capita GDP represents the total<br />

value in Purchasing Power Parity terms of final goods and services produced within a<br />

country during a specified time period divided by the average popul<strong>at</strong>ion for the same one<br />

year. Purchasing Power Parity (PPP) is a theory which rel<strong>at</strong>es changes in the nominal<br />

exchange r<strong>at</strong>e between two countries currencies to changes in the countries' price levels,<br />

thereby ruling out exchange r<strong>at</strong>e differences.<br />

23


The graph below, depicted in Figure 2.3, shows the growth of GDP per capita from 1980 on<br />

towards (predictions of) GDP development in 2014. We can clearly see a downturn due to<br />

the recent economic crisis, but after a few years GDP is expected to continue to rise further.<br />

Although Europe and North America continue to have the highest GDP per capita by far, we<br />

can see th<strong>at</strong> Asia Pacific and South America are also on the rise. Per capita income is going<br />

up, which means th<strong>at</strong> the demand for energy and resources is going to rise as well. Per<br />

capita income developments seem to continue to add to demand induced scarcity of<br />

traditional energy sources.<br />

We can see th<strong>at</strong> Europe has the second highest GDP, after North America. A high GDP<br />

transl<strong>at</strong>es into a higher welfare level. Consequently, higher welfare directly influences the<br />

energy usage of a society. The number of electrical appliances rises, people live in larger<br />

houses th<strong>at</strong> need more energy and make use of modern transport<strong>at</strong>ion th<strong>at</strong> further raise<br />

energy needs.<br />

US dollars<br />

50000<br />

45000<br />

40000<br />

35000<br />

30000<br />

25000<br />

20000<br />

15000<br />

10000<br />

5000<br />

0<br />

1980<br />

1982<br />

1984<br />

Figure 2.3 – GDP growth per region, PPP per capita<br />

1986<br />

Technological change<br />

1988<br />

1990<br />

1992<br />

1994<br />

1996<br />

1998<br />

Years<br />

2000<br />

2002<br />

2004<br />

Source: IMF, 2008<br />

2006<br />

2008<br />

2010<br />

2012<br />

2014<br />

Middle East<br />

North America<br />

Europe<br />

Africa<br />

Asia and Pacific<br />

South America<br />

Technological change is the third factor th<strong>at</strong> determines demand induced scarcity. The<br />

Industrial Revolution presented the biggest influence, th<strong>at</strong> started in the l<strong>at</strong>e 18 th century,<br />

initi<strong>at</strong>ed by the invention of the steam engine in 1775. The Industrial Revolution origin<strong>at</strong>ed in<br />

24


Gre<strong>at</strong> Britain and marks the start of a shift in human society by a move from agricultural-<br />

based societies to modern society because of machine-based production. The invention of<br />

the steam engine marked a technological change th<strong>at</strong> spread from Gre<strong>at</strong> Britain to Europe<br />

and the United St<strong>at</strong>es. The mechaniz<strong>at</strong>ion of transport<strong>at</strong>ion and manufacturing paved the<br />

way for trade and economic growth.<br />

Industrializ<strong>at</strong>ion gre<strong>at</strong>ly increased the wealth of the industrialized countries. Since then,<br />

industrialized societies have relied on fossil fuels to provide their energy needs and became<br />

dependent for their wealth and power on energy from fossil sources (Amineh and Houweling,<br />

2007, p.375). Wood and coal were the primary energy inputs in early industrializ<strong>at</strong>ion,<br />

leading to decim<strong>at</strong>ion of forests and coal reserves, currently oil and gas are the main energy<br />

sources th<strong>at</strong> fuel ad<strong>van</strong>ced societies.<br />

The development of China and India, the two largest new industrializing countries, has<br />

increased energy demand drastically. China, one of the largest countries of the world<br />

represents the biggest influence on global energy demand. In the past years, China has<br />

picked up on the industrial revolution, moving from an agricultural society to an ad<strong>van</strong>ced<br />

industrial economy. As of 2000, the share of China’s industrial sector has grown to be about<br />

two-third of China’s total GDP. The share of agricultural sector of GDP has expectedly<br />

declined from 42.2% in 1970 to 11.9% in 2000 (Dutta, 2005, p.1169). China’s demand for<br />

energy to fuel their industrializ<strong>at</strong>ion has grown dram<strong>at</strong>ically. In 2008, Chinese energy<br />

demand experienced a growth of 7.7%, accounting for half of global energy consumption<br />

growth 6 . Figure 2.4 below shows th<strong>at</strong> China’s Industrial Revolution has increased their oil<br />

demand, turning China in a Net importer of oil.<br />

6 BP st<strong>at</strong>isitical review of world energy energy 2008 www.bp.com<br />

25


Figure 2.4 – China’s Oil Production and Consumption, 1986-2006<br />

Source: EIA Intern<strong>at</strong>ional Petroleum, 2008<br />

The growth and industrializ<strong>at</strong>ion of China will have far reaching consequences for Europe<br />

and its energy needs. China’s energy demand accounted for half of the total energy demand<br />

growth in 2006, leading to increased demand for resources on the already scarce oil<br />

resources. China poses a new and sizeable competitor for oil resources, th<strong>at</strong> will claim its<br />

part of the resources predominantly sourced from the Middle East. The technological<br />

development of China is expected to increase in the coming decades, increasing their energy<br />

demand and thus the competition for scarce resources.<br />

So, looking from the demand side, the analysis shows th<strong>at</strong> the global energy demand is most<br />

likely going to increase in the coming years. The growing popul<strong>at</strong>ion th<strong>at</strong> has increased<br />

purchasing power th<strong>at</strong> will develop the need for higher energy demand, as well as the<br />

developing industrializ<strong>at</strong>ion of China th<strong>at</strong> will pose a new competitive risk for the already high<br />

demand for resources in the EU due to their increased demand for oil and gas to fuel their<br />

development. In the next part, we will take a look <strong>at</strong> energy supply.<br />

2.1.2 Supply induced scarcity<br />

Supply-induced scarcity is the second type of scarcity in the model, where demand-induced<br />

scarcity puts pressure on the demand side, supply induced scarcity is initi<strong>at</strong>ed by shortages<br />

of supply, running out of reserves/stock and uncertainty in supply due to external factors.<br />

These factors put extra pressure on today’s energy consumption.<br />

26


In determining supply-induced scarcity, I will look <strong>at</strong> the dwindling of stock and the concern<br />

about the stability of supply and their influence on energy scarcity. In the next paragraphs I<br />

will analyze the development of the main sources of energy (oil and gas) in recent years,<br />

based on these criteria.<br />

Dwindling of Stock<br />

In this paragraph, I will look <strong>at</strong> the reserves of the most prominent energy sources in the<br />

energy mix of the EU today, oil and gas. EU proven reserves will be compared with both<br />

production and consumption in the European Union and in the rest of the world, together with<br />

the ramific<strong>at</strong>ions this has on energy security in the EU. As has been depicted in figure 2.5,<br />

the proven oil reserves for the EU have been on a constant low. At the end of 1986, the EU<br />

had 9,2 thousand million barrels of oil, <strong>at</strong> the end of 2006 this has declined to 7,1 thousand<br />

millions barrels, 0,6% of the total reserves in the world. The Middle East has by far the<br />

biggest reserves, 61,5% of the total, which seen increase since 1986. The expansion of<br />

proven reserves is mainly due to new technology and new site discovery th<strong>at</strong> increases the<br />

supply of oil th<strong>at</strong> can be extracted.<br />

Figure 2.5 – Oil Proven Reserves per region<br />

<strong>at</strong> end <strong>at</strong> end<br />

At end<br />

Oil: Proved reserves 1986 1996 <strong>at</strong> end 2005 2006<br />

Thousand Thousand Thousand Thousand<br />

Million million million Million Share<br />

Barrels barrels barrels Barrels of Total<br />

Total North America<br />

Total S. & Cent.<br />

101,6 89,3 60,7 59,9 5,0%<br />

America 64,6 90,8 103,2 103,5 8,6%<br />

Total Middle East 536,7 672,2 742,7 742,7 61,5%<br />

Total Africa 58,0 74,9 117,2 117,2 9,7%<br />

Total Asia Pacific 39,7 39,2 40,5 40,5 3,4%<br />

European Union 27 9,2 8,5 7,3 7,1 0,6%<br />

Source: BP world energy st<strong>at</strong>istics 2006<br />

Now th<strong>at</strong> we have established th<strong>at</strong> the EU has a small oil reserve, we will look <strong>at</strong> the<br />

production and consumption dynamics to look into the energy dependency of the EU. The<br />

small reserves the EU possesses do not allow them to have large production.<br />

27


As depicted in Table 2.6 below, we can see th<strong>at</strong> the Middle East has the largest production,<br />

31,2% of total <strong>at</strong> 25.5 million barrels daily, followed by North America with a production of<br />

12,1% of total. Europe sources the majority of their oil from the Middle East and the US, the<br />

production of 2412 thousand barrels daily do not weigh up to the 15198 thousand barrels,<br />

leaving an import dependency of 12786 thousand barrels daily.<br />

North America, Asia Pacific and Europe are all depending on oil from the Middle East in<br />

order to meet their consumption. The high reserves in the Middle East of these vital energy<br />

sources are of gre<strong>at</strong> importance to the global energy rel<strong>at</strong>ions as oil and gas are the primary<br />

sources for energy around the world. The EU will have to compete for resources with North<br />

America and Asia-Pacific, all relying on imports for meeting their energy needs. (See<br />

Appendix V for Production & Consumption D<strong>at</strong>a)<br />

In the next part, we will take a look <strong>at</strong> gas import and exports, the second main energy<br />

source in the world today, and 24% of the energy mix in the European Union. I will also<br />

briefly discuss the gas supply of the Netherlands, but will do this in more detail with regard to<br />

the renewable sources in paragraph 2.3 of this Chapter. The Russian Feder<strong>at</strong>ion is included<br />

as a separ<strong>at</strong>e entry due to the fact th<strong>at</strong> the Russian Feder<strong>at</strong>ion is the most prominent<br />

supplier of gas to the EU. The EU has only 1,3% of the total gas reserve known today, with<br />

2,43 trillion m 3 . The Middle East has the most reserves <strong>at</strong> 40,5% of total proven reserves.<br />

The most important source for gas for the EU is the Russian Feder<strong>at</strong>ion with 26,3% of total<br />

reserves. The enormous reserves, and the fact th<strong>at</strong> Russia borders the EU make it the<br />

predominant gas supplier. However, this is not without its problems, as I will illustr<strong>at</strong>e further<br />

in paragraph 2.1.3. The Netherlands has a rel<strong>at</strong>ively large reserve <strong>at</strong> 0,7% of the world total<br />

reserves, and is less dependent on Russian gas supplies as the rest of the EU countries,<br />

however, due to its inexplicable linkage to the EU and the EU common energy market, the<br />

general supply dynamics of the EU will also affect the Netherlands.<br />

28


Figure 2.6 – Regional Proven Reserves for Gas<br />

N<strong>at</strong>ural Gas: Proved<br />

<strong>at</strong> end<br />

reserves <strong>at</strong> end 1986 <strong>at</strong> end 1996 2005 At end 2006<br />

Trillion Trillion Trillion Trillion<br />

cubic Cubic Cubic cubic Share R/P<br />

metres metres Metres metres of total r<strong>at</strong>io<br />

Total North America 10,26 8,41 7,83 7,98 4,4% 10,6<br />

Total S. & Cent. America 4,24 6,06 6,85 6,88 3,8% 47,6<br />

Total Middle East 30,41 49,31 72,49 73,47 40,5% *<br />

Total Africa 7,40 10,17 14,08 14,18 7,8% 78,6<br />

Total Asia Pacific 8,14 10,40 14,66 14,82 8,2% 39,3<br />

European Union 25 3,57 3,42 2,49 2,43 1,3% 12,8<br />

Russian Feder<strong>at</strong>ion n/a n/a 47,66 47,55 26.3% 77.8<br />

Netherlands 1,82 1,77 1,39 1,35 0,7% 21,8<br />

Source: BP World Energy Outlook, 2006<br />

Now, we will take a look <strong>at</strong> the production and consumption dynamics for gas (see Appendix<br />

VI for d<strong>at</strong>a). Most of the production of gas is taking place in North America, with 26,5% of the<br />

total production. North America is still a net importer though, as their production of 754,4<br />

billion m 3 in 2006 did not supply for the 770,3 billion m 3 of consumption. Asia Pacific is also a<br />

net importer, with 377,1 billion m 3 production against 438,5 billion m 3 consumption in 2006.<br />

However, the EU looks the most troubling, as they have only 202,7 billion m 3 production (of<br />

which 61,9 billion m 3 in the Netherlands) against 487,4 billion m 3 of consumption. More than<br />

half of EU’s gas consumption has to be imported, predominantly from Russia, which leads to<br />

a very high import dependence for a energy source making up 24% op the total energy mix<br />

for the EU. The Netherlands has a considerable gas reserve and high production, but more<br />

than half of this production is consumed by the Netherlands themselves. The Netherlands<br />

has a very gas-intensive energy mix and this leaves a small portion of gas available for<br />

export.<br />

From the analysis above we can conclude th<strong>at</strong> for the most dominant energy sources in the<br />

EU energy mix, oil and gas, the EU has a high import dependency for both sources. For oil,<br />

the Middle East is the dominant supplier and for Gas the Russian Feder<strong>at</strong>ion. Figure 2.7<br />

below further specifies the energy dependency of the EU per country.<br />

29


Figure 2.7 – Energy dependency per country, EU 2006<br />

Source: EU Energy portal, 2009<br />

We can see th<strong>at</strong> a large number of countries are very dependent on imports, with the highest<br />

dependency for Spain, Portugal and Italy. France and The Netherlands show a low<br />

dependency due to nuclear energy and n<strong>at</strong>ural gas supplies respectively.<br />

The future looks troublesome for the EU energy supply. The EU energy dependency will rise<br />

from 50% in 2000, to 70% in 2030. As predicted, 45% of oil imports origin<strong>at</strong>e from the Middle<br />

East, and by 2030, 90% of the oil consumption will be based on imported oils. Gas imports<br />

are for 40% from Russia, rising to 60% in 2030 with an overall gas dependency of 80% 7 .<br />

As oil and gas are non-renewable energy sources they will replenish, adding to the<br />

importance of developing renewable energy sources. Below is a estim<strong>at</strong>ion of the d<strong>at</strong>e oil<br />

and gas reserves are empty 8 .<br />

7 The Commission Green Paper on security of energy supply (November 2000) http://www.euractiv.com/en/energy/geopolitics-<br />

eu-energy-supply/article-142665 (accessed on 20-04-2009)<br />

8 EU Energy Portal http://www.energy.eu/#renewable (accessed on 28-04-2009)<br />

30


Figure 2.8 – Oil and gas reserves and expected exhaustion d<strong>at</strong>e<br />

N<strong>at</strong>ural Gas (in cubic metres) Oil (in barrels)<br />

Total world<br />

reserves –<br />

Jan 1 st 2009<br />

World usage<br />

per second<br />

Estim<strong>at</strong>ed<br />

d<strong>at</strong>e of<br />

exhaustion<br />

174436171550404 Total World<br />

reserves – Jan 1 st<br />

2009<br />

92653 World usage per<br />

07:19 Sept. 12 th ,<br />

2068<br />

second<br />

Estim<strong>at</strong>ed d<strong>at</strong>e of<br />

exhaustion<br />

Source: Europe Energy Portal, 2009<br />

1206780968626<br />

986<br />

16:36 Oct 22,<br />

2047<br />

With the oil exhaustion d<strong>at</strong>e <strong>at</strong> 2047, and gas <strong>at</strong> 2068, the global shortage of energy sources<br />

is apparent, stressing the necessity of concentr<strong>at</strong>ing on renewable energy. Should the<br />

current consumption of fossil fuels continue, the global supply of oil and gas will be finished<br />

before 2070. Increased scarcity of these vital resources will lead to increasing tensions<br />

between the producer and consumer countries, and fierce competition between the import<br />

dependent st<strong>at</strong>es.<br />

Concluding, we have seen th<strong>at</strong> demand induced scarcity is expected to be of growing<br />

importance in the energy security of the EU. In order to decrease demand induced scarcity,<br />

the EU will have to look into lowering demand by increasing efficiency, or develop renewable<br />

energy sources. An important part of the EU str<strong>at</strong>egy will be to develop renewable energy in<br />

order to be able to sustain the current standard of life for its increasing number of inhabitants<br />

in the future. In the next part, we will take a look <strong>at</strong> structural scarcity facing the EU.<br />

2.1.3 Structural Scarcity<br />

Structural scarcity is supply-induced by the deliber<strong>at</strong>e action of a major power, by non-st<strong>at</strong>e<br />

actors such as major oil companies, or by producer cartels such as the Organiz<strong>at</strong>ion of<br />

Petroleum Exporting Countries (OPEC) (Amineh and Houweling, 2007, p.356).<br />

A recent example th<strong>at</strong> underlines problems in structural scarcity for the EU is the Ukrainian<br />

Gas crisis.<br />

31


In December 2008, the Ukraine and Gazprom got into a dispute on the supply price of gas<br />

and transit prices. Gazprom is the world's largest gas producer and supplies a quarter of the<br />

European Union's gas needs, or 42% of the EU's gas imports, much of it via Ukraine 9 .<br />

Gazprom, although priv<strong>at</strong>ely owned, is closely linked to the Russian government, and the<br />

gas supply of Russia it manages can be used as a political tool, as the Gas Crisis shows.<br />

In response to the deb<strong>at</strong>e on the gas prices, the Russians cut the gas supply to the Ukraine<br />

in January 2009. Because the Ukraine acts as the main transfer country of Russian gas to<br />

the EU, the gas delivery for a large number of EU countries stalled. This resulted in<br />

disruptions in supply to 18 European countries in the middle of winter as the Ukraine is the<br />

main gas supplier for the European Union 10 . The Ukraine and Russia have a long history of<br />

disputes over gas prices and supply contracts, d<strong>at</strong>ing back to the early nineties. The<br />

continuous irregularity in supply for the EU makes it highly susceptible for structural scarcity<br />

risks, further adding to unstable energy security for the EU as a whole.<br />

2.2 Renewable Energy:<br />

As we have seen in the paragraphs above, Europe is heavily reliant on foreign countries for<br />

its energy sources, which leads to vol<strong>at</strong>ility in supply. Coupled to rising demand and the<br />

exhaustion of oil and gas, Europe needs to find altern<strong>at</strong>ive, renewable energy sources. In<br />

this part, we will take a closer look on renewables in the European energy mix, and the plans<br />

for renewables in the future. In 2006, only 7% of the EU energy mix is sourced from<br />

renewables. But the EU will have to rely on renewables as altern<strong>at</strong>ive sources for energy in<br />

the near future.<br />

Renewable energies can play a major role in contributing to the challenge of energy security<br />

and decreasing global warming as a result of preventing CO2 emission because they can<br />

not deplete and also produce less greenhouse-gas emissions than fossil fuels.<br />

Renewables can play an important role in decreasing Europe’s energy dependency, thereby<br />

strengthening energy supply and counterbalancing the increasing pressure on the depleting<br />

fossil fuels 11 .<br />

9 BBC website - http://news.bbc.co.uk/2/hi/europe/7806616.stm<br />

10 Euractiv website - http://www.euractiv.com/en/energy/europe-seeks-draw-lessons-gas-crisis/article-178708<br />

(accessed on 19-04-2009)<br />

11 Euractiv website – www.euractiv.com - (accessed on 02-05-2009)<br />

32


The renewable energy market also presents a very promising new sector of industry,<br />

especially for countries in North-West Europe. Sectors include manufacturing of components,<br />

systems design and engineering and electricity transport. Each sector will benefit<br />

economically by cre<strong>at</strong>ing employment and new sources of revenue.<br />

The European Commission has issued a directive th<strong>at</strong> lays down the principles according to<br />

which Member St<strong>at</strong>es need to ensure th<strong>at</strong> the share of renewable energy in the EU final<br />

energy consumption reaches <strong>at</strong> least 20% by 2020, and establishes n<strong>at</strong>ional overall targets<br />

for each Member St<strong>at</strong>e. The directive focuses on three different sectors th<strong>at</strong> are concerned in<br />

renewable energy, this thesis focuses on electricity. In Appendix VII you can find an overview<br />

of the 2020 goals for all the member countries in the EU.<br />

The directive has been put in effect in 2001, since then a large number of member countries<br />

have been heavily investing in renewable sources of energy. In Figure 2.9 below I have<br />

depicted the development of primary production from renewables in the EU-27 from 2000 to<br />

2006. The year 2000 acts as a base year (with value 100).<br />

Figure 2.9 – Development of primary production from renewables<br />

in EU -27 (2000-2006)<br />

Source: Eurost<strong>at</strong>, 2009<br />

The lines represent the development of the accompanying renewable energy source. Blue<br />

represents biomass and wastes, yellow is hydro, purple for wind energy, light blue for<br />

geothermal and green for solar energy.<br />

Since 2000, hydro energy has seen a decline of its share in primary production, biomass and<br />

wastes are growing but rel<strong>at</strong>ively slow, and geothermal has stagn<strong>at</strong>ed its development<br />

33


around 2003. The most impressive results are in solar energy and wind energy, with solar<br />

more than doubling in capacity since 2000, and wind energy has more then tripled its share<br />

of primary production. These results underline th<strong>at</strong> the directive has been effective and th<strong>at</strong><br />

wind energy has seen the most prominent growth.<br />

2.2.1 <strong>Wind</strong> Energy in the EU<br />

<strong>Wind</strong> Energy has seen the most prominent growth in supply in the recent years, and is<br />

expected to be the most prominent source of renewable energy in the future. As the fossil<br />

fuels are going to run out and will be increasingly vol<strong>at</strong>ile because of resource scarcity, wind<br />

energy is a suitable altern<strong>at</strong>ive, as it is indigenous and unlimited. Relying on wind energy will<br />

lower the need for fuel imports. <strong>Wind</strong> energy can be produced <strong>at</strong> known prices, decreasing<br />

vol<strong>at</strong>ility in the energy market and lowering infl<strong>at</strong>ionary pressure. Another important aspect of<br />

wind energy is th<strong>at</strong> it is not affected by intern<strong>at</strong>ional political pressure or regional conflict.<br />

<strong>Wind</strong> also has the possibility of being implemented on a large scale, making a sizeable<br />

contribution to energy supply. Until 2001, wind energy was only produced <strong>at</strong> onshore<br />

loc<strong>at</strong>ions, but since 2001, the first offshore parks were oper<strong>at</strong>ional. In Figure 2.10, we can<br />

see the annual wind energy install<strong>at</strong>ions for Europe from 2000 onwards, with projections until<br />

2020 by the European <strong>Wind</strong> Energy Associ<strong>at</strong>ion (EWEA). As illustr<strong>at</strong>ed in the graph, onshore<br />

wind will gradually grow, but the most dominant growth is seen in the offshore wind<br />

install<strong>at</strong>ions. Each year, a large install<strong>at</strong>ion is added offshore to a projection of a 7 GigaW<strong>at</strong>t<br />

install<strong>at</strong>ion in 2020.<br />

Figure 2.10 - <strong>Wind</strong> Energy Annual Install<strong>at</strong>ions 2000-2020 in EU(in GW)<br />

Source: EWEA, 2008<br />

.<br />

34


If we take a closer look <strong>at</strong> the cumul<strong>at</strong>ive capacity and electricity production from wind<br />

energy, we see a similar development.<br />

Figure 2.11 - EU electricity from <strong>Wind</strong> up to 2030 (in GW & TWh)<br />

Source: EWEA (2008)<br />

The cumul<strong>at</strong>ive capacity of onshore loc<strong>at</strong>ions will continue to be dominant, but offshore wind<br />

energy will see the highest increase, from 7 GW in 2020 to around 450 GW in 2030. The<br />

electricity production th<strong>at</strong> will origin<strong>at</strong>e from offshore install<strong>at</strong>ions is projected to grow to<br />

almost half of the total electricity production sourced from wind.<br />

Taking a closer look <strong>at</strong> the EU, we can see in Table 2.1 th<strong>at</strong> Germany has the biggest<br />

installed capacity with 23902 MW in 2008, followed by Spain with 16740 MW in 2008. Italy,<br />

France, UK, Denmark, Portugal and the Netherlands comprise the rest of the top 8 of<br />

installed capacity, however, Germany and Spain have the largest capacity by far.<br />

Germany and Spain have 39,4% and 26,8% respectively in 2007, with the other countries of<br />

the top 8 <strong>at</strong> 5,5% (Denmark) and lower. The Netherlands have a 3,1% share of the total<br />

capacity.<br />

We have earlier concluded th<strong>at</strong> the offshore wind market is projected to grow significantly in<br />

the next decades. This growth potential illustr<strong>at</strong>ed by the EWEA projections is supported by<br />

similar goals of the EU th<strong>at</strong> aim to support the potential of offshore wind by the EU ETS as<br />

well as EU legisl<strong>at</strong>ion.<br />

35


Table 2.1 – <strong>Wind</strong> Power installed capacities in the EU <strong>at</strong> the end of 2008<br />

2007<br />

(in MW)<br />

2008<br />

Capacity in<br />

2006<br />

Decommissioned<br />

in 2008<br />

Germany 22247,2 23902,8 1165,1 9,7<br />

Spain 15151,3 16740,3 1609,1 20,1<br />

Italy 2726,1 3736,5 1010,4<br />

France 2455,1 3404,0 948,9<br />

UK 2419,3 3287,9 868,6<br />

Denmark 3123,8 3179,9 77,6 21,5<br />

Portugal 2149,6 2862,0 712,4<br />

Netherlands 1747,0 2224,6 499,4 21,8<br />

Sweden 831,0 1021,0 190,0<br />

Ireland 795,0 1002,7 207,7<br />

Source: Adapted from EWEA, 2009<br />

Measured in total installed capacity, The Netherlands takes the 8th place in the EU, with<br />

leaders Germany and Spain <strong>at</strong> one and two respectively with a much larger capacity<br />

installed. But, if we look <strong>at</strong> offshore wind capacity, we see th<strong>at</strong> the Netherlands has the 3 rd<br />

installed capacity of the EU after the UK and Denmark, with considerably more capacity then<br />

4 th country Sweden. In the next part of this chapter I will look <strong>at</strong> the potential for offshore wind<br />

energy in The Netherlands.<br />

36


Table 2.2 – <strong>Wind</strong> Offshore – Power installed capacity in the EU<br />

<strong>at</strong> the end of 2008 (in MW) (incl. near shore projects and offshore test sites)<br />

2007 2008<br />

UK 403,8 565,8<br />

Denmark 426,4 426,4<br />

Netherlands 126,6 246,8<br />

Sweden 133,5 133,5<br />

Belgium 0,0 30,0<br />

Ireland 25,0 25,0<br />

Finland 0,0 24,0<br />

Germany 7,0 12,0<br />

Italy 0,0 0,1<br />

Total EU 27 1122,5 1463,6<br />

Source: EarObserv / ER 2009<br />

2.3 Offshore <strong>Wind</strong> Energy in the Netherlands.<br />

Now th<strong>at</strong> we have analyzed the scarcity for the main energy sources, oil and gas for the<br />

European Union, and also examined the development of renewable energy sources in the<br />

EU, we will now focus on the Netherlands and their position in these developments. The<br />

European situ<strong>at</strong>ion has a very important impact on the Netherlands. First of all, Europe is<br />

striving for a liberalized energy market with the goal to connect all n<strong>at</strong>ional energy markets<br />

into one large interconnected European market. Considerable steps are undertaken to<br />

gradually move towards one market, this means th<strong>at</strong> the energy problems th<strong>at</strong> the EU is<br />

facing will increasingly become Dutch problems as well. As we have seen, The Netherlands<br />

currently has 3,1% of the total capacity of wind energy installed and is aiming to get a larger<br />

share of the market.<br />

First, I will analyze the import and export balance of the Dutch energy mix in 2008, as<br />

depicted in Table 2.3<br />

37


Table 2.3 – Import and Export Balance of the Dutch Energy Mix (2008) in Petajoule<br />

Energy Sources<br />

(in Petajoule)<br />

Total Coal<br />

Total Oil<br />

N<strong>at</strong>ural Gas<br />

Electricity<br />

He<strong>at</strong>, Biomass,<br />

Waste<br />

Nuclear<br />

Total Energy<br />

Sources<br />

Production<br />

Source: CBS St<strong>at</strong>line, 2009<br />

We can see th<strong>at</strong> The Netherlands rely heavily on the import of oil, 7567 petajoule is<br />

imported. A large amount, 5511 petajoule, is exported again, which means the import<br />

balance for the Netherlands is 2067 petajoule. Nuclear Energy is produced <strong>at</strong> Borselle, the<br />

only Nuclear Plant in the Netherlands, all of it’s production is consumed <strong>at</strong> the home market.<br />

Coal is largely replaced by oil and n<strong>at</strong>ural gas, and represents an import balance of only 359<br />

petajoule. Electricity is also largely imported, with a production of only 16 petajoule and 90<br />

petajoule import. With a consumption of three times the production, electricity sourced from<br />

wind can play an important role in decreasing the import balance.<br />

The Netherlands use four of the five renewable sources for their electricity supply, only<br />

geothermal energy is not present in the n<strong>at</strong>ural resources. Initi<strong>at</strong>ives are developed in solar,<br />

hydro, biomass and wind energy. Depicted in Figure 2.12 is the development of these four<br />

renewable sources from 2000 until 2007.<br />

Import<br />

Export<br />

Import<br />

Balance<br />

- 562 203 359<br />

93 7567 5511 2056<br />

2544 760 1852 -1092<br />

16 90 33 57<br />

149 - - -<br />

40<br />

2843 8979 7598 1381<br />

38


Figure 2.12 - Development of renewable energy sources in the Netherlands by source<br />

4,5<br />

4<br />

3,5<br />

3<br />

2,5<br />

2<br />

1,5<br />

1<br />

0,5<br />

0<br />

00<br />

01<br />

in % of total electricity consumption (2000-2007)<br />

02<br />

03<br />

04<br />

05<br />

06<br />

07<br />

00<br />

01<br />

02<br />

03<br />

04<br />

05<br />

06<br />

07<br />

00<br />

01<br />

02<br />

03<br />

04<br />

05<br />

06<br />

07<br />

00<br />

01<br />

02<br />

03<br />

04<br />

05<br />

06<br />

07<br />

Hydro <strong>Wind</strong> Solar Biomass<br />

Source: CBS St<strong>at</strong>line, 2009<br />

Hydro-power and solar power play only a marginal role in electricity production, biomass has<br />

the largest percentage of consumption <strong>at</strong> around 3% of the electricity consumption, closely<br />

followed by wind with just under 3%. <strong>Wind</strong> energy has seen the highest increase of all the<br />

renewable sources from 2000 on.<br />

The most notable source in the energy mix is the reserve of n<strong>at</strong>ural gas The Netherlands<br />

possesses, allowing for a production of 2544 peta joule, and an import balance of -1092 peta<br />

joule. The indigenous gas supply is an important asset for the Dutch energy mix, their<br />

reserves allow them to export gas and makes the Netherlands invulnerable to the<br />

dependency on Russian Gas th<strong>at</strong> is experienced by the rest of the EU. Notwithstanding the<br />

large n<strong>at</strong>ural gas supply, The Netherlands have ambitious plans for renewable energy, and<br />

offshore wind will play the most prominent role in <strong>at</strong>taining these goals. The ambition is to<br />

have <strong>6000</strong> MW of offshore wind park capacity installed by 2020. This is a gre<strong>at</strong> challenge<br />

given th<strong>at</strong> the current installed capacity is 450 MW.<br />

With a long coastline on the North <strong>Sea</strong>, the Netherlands are loc<strong>at</strong>ed in an area with high wind<br />

speeds, very suitable for offshore wind energy. As depicted in the graph below, wind speeds<br />

are around 8 M/s and wind power 600-800 W<strong>at</strong>ts per m 2 of rotor surface, compared to 100 –<br />

400 W<strong>at</strong>t per m 2 for the other loc<strong>at</strong>ions. Only hills and ridges score higher in terms of wind<br />

speed and power capacity.<br />

39


Figure 2.13 – <strong>Wind</strong> Resource Map - EU<br />

Source: <strong>Wind</strong>power, 2008<br />

In line with the plans outlined in the EC Directive and the Schoon en Zuinig plan, the<br />

Netherlands has been developing their wind energy capacity steadily from 1987 onwards,<br />

starting with wind on land. In Figure 2.14, the capacity development of wind energy in the<br />

Netherlands in MW is depicted. The graph shows the apparent increase in capacity after<br />

2001, the start of both the Directive and Schoon en Zuinig.<br />

Figure 2.14 – Capacity of Dutch <strong>Wind</strong> Energy by source (in MW)<br />

Source: <strong>Wind</strong> Service Holland, 2009<br />

40


From 1996 on, the first nearshore install<strong>at</strong>ions were set up, the first oper<strong>at</strong>ional near shore<br />

park is Egmond aan Zee, commissioned in 2001. The first offshore install<strong>at</strong>ions in the<br />

Netherlands were developed in 2006, in the form of the Prinses Amalia park.<br />

If we take a look <strong>at</strong> the realised capacity per year, we can see by looking <strong>at</strong> the irregular<br />

peaks in the graph (Appendix VIII) th<strong>at</strong> a coherent str<strong>at</strong>egy is much needed to get a steady<br />

increase. In 2006 and 2008 capacity growth peaked, while other years showed fluctu<strong>at</strong>ion.<br />

The neg<strong>at</strong>ive result so far for 2009 means th<strong>at</strong> some turbines have been decommisioned,<br />

leading to loss of capacity. With a very small part under construction, no new wind energy<br />

will be commisioned in 2009, and a slight decrease in wind on land capacity can be seen.<br />

The government has put a hold on new wind capacity because of the problems the<br />

government faces in developing new procedures and policy to cope with the overwhelming<br />

interest in (offshore) wind. The procedures th<strong>at</strong> were put in place for the development of wind<br />

<strong>at</strong> sea in the Netherlands have been plagued by inefficiency in the first round of 950 MW in<br />

2010. The government chose to leave the initi<strong>at</strong>ive to market actors to exploit parks and<br />

develop loc<strong>at</strong>ions for offshore wind parks were to be developed by market actors. In Chapter<br />

3 I will further analyze the policies and legisl<strong>at</strong>ure th<strong>at</strong> help cre<strong>at</strong>e the offshore parks and the<br />

problem associ<strong>at</strong>ed with these procedures.<br />

So far we have determined th<strong>at</strong> offshore wind is the most prominent renewable energy for<br />

the Netherlands in fulfulling the 2020 goals, with a <strong>6000</strong> MW committed capacity in 2020.<br />

<strong>Wind</strong> energy is the most prolific source of renewable energy for the Netherlands, as the<br />

Netherlands are highly suitable geographically for large-scale offshore wind loc<strong>at</strong>ions due to<br />

the large EEZ in the North <strong>Sea</strong> and the rel<strong>at</strong>ively shallow depth fo the w<strong>at</strong>er. Since 2001, the<br />

first nearshore and offshore parcs are developed, and the next step will be commissioning<br />

larger parks to be able to make the <strong>6000</strong> MW goal. However, large scale offshore wind<br />

energy comes with a gre<strong>at</strong> deal of uncertainty and risk, offshore wind is not cost-effective yet,<br />

and developers rely on government stimulus to be able to develop large scale parks. This<br />

implies th<strong>at</strong> the government needs to have sufficient budget and commitment to this form of<br />

renewable energy in order to cre<strong>at</strong>e the right environment for market actors to enter into the<br />

large scale development of this source of energy. However, the energy dependency and<br />

energy security issues outlined above do underline the need for the Netherlands to diversify<br />

their energy mix and decrease their import dependency.<br />

In the next paragraph, the interest for renewable energy from a clim<strong>at</strong>e change perspective<br />

are described.<br />

41


2.4 Clim<strong>at</strong>e Change<br />

The importance of renewable energy sources for Europe is also motiv<strong>at</strong>ed by the clim<strong>at</strong>e<br />

change and the greenhouse gas emissions as a result of energy by fossil fuels. Fossil fuels<br />

emit Greenhouse gasses (w<strong>at</strong>er vapor, CO2, methane, nitrous oxide, ozone, CFCs) th<strong>at</strong><br />

impact the earth’s <strong>at</strong>mosphere neg<strong>at</strong>ively by cre<strong>at</strong>ing global warming. The second most<br />

dominant of the greenhouse gasses is CO2.<br />

Below, the rise in CO2 concentr<strong>at</strong>ion is depicted.<br />

Figure 2.15 – Monthly Carbon Dioxide Concentr<strong>at</strong>ion in the <strong>at</strong>mosphere, 1952 - 2009<br />

Source: HADCRUUT 3, 2008<br />

The rise in CO2 levels in the <strong>at</strong>mosphere has said to contribute to global warming. The rise of<br />

the temper<strong>at</strong>ure in the earth’s <strong>at</strong>mosphere is apparent, and has enormous influence in the<br />

future of our planet and life on earth 12 .<br />

12 http://www.cru.uea.ac.uk/cru/info/warming/ (accessed on 01-04-2009)<br />

42


In the past decades global warming is apparent, the graph below shows the rising<br />

temper<strong>at</strong>ure of the earth, with the rising concentr<strong>at</strong>ion of greenhouse gasses as the most<br />

likely explan<strong>at</strong>ion.<br />

Figure 2.16 – Global Air temper<strong>at</strong>ure, 1860 - 2008<br />

Source: IPCC, 2008<br />

The graph shows the combined global land and marine surface temper<strong>at</strong>ure from 1850 to<br />

2008, 2008 being the 10th warmest year of the time series. The nineties was the warmest<br />

decade 13 .<br />

Clim<strong>at</strong>e change, its origins and its implic<strong>at</strong>ions are researched by a special, Nobel-prize<br />

winning, research panel, The Inter-governmental Panel on Clim<strong>at</strong>e Change (IPCC). The<br />

IPCC st<strong>at</strong>ed, in its most recent report in 2007: “Warming of the clim<strong>at</strong>e system is<br />

unequivocal, as is now evident from observ<strong>at</strong>ions of increases in global average air and<br />

ocean temper<strong>at</strong>ures, widespread melting of snow and ice, and rising global average sea<br />

level” … “Most of the observed increase in globally averaged temper<strong>at</strong>ures since the mid-<br />

20th century is very likely due to the observed increase in anthropogenic greenhouse gas<br />

concentr<strong>at</strong>ions.<br />

The effects of the temper<strong>at</strong>ure increase are very worrying and pose widespread thre<strong>at</strong>s to<br />

agriculture, ecosystems, human health, w<strong>at</strong>er resources, industry and society. (For a full list<br />

of effects, see the IPCC report of 2007). Renewable energy can make a big contribution in<br />

countering the production of greenhouse gasses and limiting the effects of clim<strong>at</strong>e change.<br />

13 Hadcruut website – http://www.cru.uea.ac.uk/cru/info/warming/ (accessed on 24-04-2009)<br />

43


2.5 Conclusion<br />

In this chapter I have analyzed the supply and demand characteristics of energy for the<br />

European Union in general, with specific focus on the Netherlands. I have demonstr<strong>at</strong>ed th<strong>at</strong><br />

the rise in the world popul<strong>at</strong>ion together with the rise of per capita income has increased the<br />

demand for energy and the energy use in world. Europe, as on of the wealthiest areas in the<br />

world has sharply increased the energy usage. At the same time, we are witnessing an<br />

Industrial Revolution in China. Energy demand has risen tremendously from 1992 onwards,<br />

with the recent economic recession only slowing the growth down mildly.<br />

If we look <strong>at</strong> the supply side, we see th<strong>at</strong> for its oil and gas supply, Europe is heavily<br />

dependent on oil from the Middle East, and gas from Russia. Relying on energy sources<br />

controlled by foreign powers gre<strong>at</strong>ly influences security of supply, and the gas crisis in 2008<br />

between the Ukraine and Russia has proven th<strong>at</strong> the supply security for Europe is very weak<br />

as the Ukrainian dispute resulted in supply interruptions with far reaching implic<strong>at</strong>ions for a<br />

number of European countries, who had to limit gas supply to their popul<strong>at</strong>ions. The existing<br />

tensions will only increase with gas reserves expected to run out in 2068 and oil reserves in<br />

2047 already. Together with the clim<strong>at</strong>e change, largely caused by the world’s energy use,<br />

this makes a strong case for the dedic<strong>at</strong>ion to renewable energy sources in Europe. A move<br />

to more renewable energy will increase security of supply, limit the impact on clim<strong>at</strong>e change<br />

and will result in a more stable energy environment for Europe.<br />

Of the various renewable energy sources (hydro, solar, wind) wind energy has the most<br />

potential. <strong>Wind</strong> energy is indigenous and unlimited, is not effected by political pressure or<br />

regional conflict and has the possibility of being implemented on a large scale. <strong>Wind</strong> energy<br />

will lower the need for fuel imports, and will decrease the vol<strong>at</strong>ility in the energy market<br />

because it can be produced <strong>at</strong> known prices.<br />

Taking a closer look <strong>at</strong> the Netherlands, we can see th<strong>at</strong> the geographic loc<strong>at</strong>ion of the<br />

Netherlands on the North <strong>Sea</strong> does make it highly suitable for offshore wind energy<br />

development. However, if we compare the Dutch offshore wind energy development we see<br />

th<strong>at</strong> the Netherlands is has the 8 th largest capacity in total wind, and a respectable 3 rd place<br />

in offshore wind capacity. The development of offshore wind has only started <strong>at</strong> 2001 with<br />

the OWEZ park, and currently only 250 MW is oper<strong>at</strong>ional, with an enlargement of 950 MW<br />

in 2010 to be expected. This is still a far cry away from the <strong>6000</strong> MW goal for 2020, with<br />

procedural problems further damping the growth of offshore wind until the new round of<br />

2012.<br />

44


In the next chapter we will look <strong>at</strong> the role policy had and will have in the past and future for<br />

offshore wind energy development in the Netherlands.<br />

45


Chapter 3 – Offshore <strong>Wind</strong> Energy: Policy in the Netherlands<br />

Introduction<br />

In this chapter I will go into detail into the policies, legisl<strong>at</strong>ion and permits th<strong>at</strong> are applicable<br />

to the development of offshore wind parks in The Netherlands. I will use the Multi-<br />

Stakeholder Processes Theory (MSP) specified to sustainable governance in order to<br />

determine in wh<strong>at</strong> aspects this theoretical approach is used by the government to connect to<br />

stakeholders and to increase the success of the Schoon & Zuinig ambitions. I will describe<br />

the stakeholders most rele<strong>van</strong>t for this research and their responses to current policy and<br />

their role in the development of offshore wind energy. Furthermore, I will go into the designs<br />

for new policy, and describe where Multi Stakeholder Theory comes into the policy making<br />

process as developed in the Netherlands.<br />

3.1 Renewable Energy in the Netherlands – “Schoon & Zuinig”<br />

The Dutch government has issued a special program in order to achieve the sustainability<br />

goals: Schoon & Zuinig represents the approach the government undertakes. The program<br />

has been developed after a 100-day dialogue with various stakeholders in society. The<br />

government cannot solve the clim<strong>at</strong>e problems alone, and has seen an encouraging amount<br />

of interest and action from other parties. The government can play a role in stimul<strong>at</strong>ing and<br />

supporting developments and initi<strong>at</strong>ives and take away barriers. Particip<strong>at</strong>ion works better<br />

then government pressure, and as a direct result convenant agreements are sealed with<br />

various stakeholders 14 .<br />

Schoon & Zuinig needs to stay in line with energy and clim<strong>at</strong>e policies by the European<br />

Union and needs to improve the Dutch Knowledge-intensive economy and energy-industry<br />

into market leaders. In 2010, the current results and expect<strong>at</strong>ions for Schoon & Zuinig will be<br />

evalu<strong>at</strong>ed and necessary adapt<strong>at</strong>ions will be devised in case the progress is not s<strong>at</strong>isfactory.<br />

The Schoon & Zuinig plan uses a mix of five instruments to achieve its goals:<br />

1- Market Incentives: The European Emissions Trading System (ETS) is the<br />

cornerstone of the plan.<br />

14 Sectorakkoord Energie 2008 – 2020 – Convenant tussen Rijksoverheid en de energiebranches in het<br />

kader <strong>van</strong> Schoon & Zuinig, Duurzaamheidsakkoord – Convenant tussen overhead, MKB,<br />

VNO/NCW, LTO, Sta<strong>at</strong>sblad 142, 2009<br />

46


2- Norms: Next to market incentives, norms will be formul<strong>at</strong>ed for energy-efficiency,<br />

CO2 emission and sustainability. Norms will act as minimum requirements for slow-<br />

adapters and act as innov<strong>at</strong>ion stimulants.<br />

3- Instruments for Innov<strong>at</strong>ion: Innov<strong>at</strong>ion can lead to cost-reduction, cost-efficiency<br />

and competition<br />

4- Temporary Stimulus: Subsidies for renewable energy of fiscal stimulus<br />

5- Intern<strong>at</strong>ional Clim<strong>at</strong>e- and Energy diplomacy: This is a role for the European<br />

Union.<br />

In the next section, I will go in depth on the various instruments;<br />

1- Market Incentives: EU ETS<br />

The European Emissions Trading System (ETS) is the cornerstone of the European and<br />

Dutch system to cut emissions. The intern<strong>at</strong>ional cap-and-trade system th<strong>at</strong> is put in place is<br />

a mand<strong>at</strong>ory system of allowances for emitting CO2 and other greenhouse gasses. In its<br />

current form, the caps are determined per industry on a n<strong>at</strong>ional level. This effectively<br />

cre<strong>at</strong>es an intern<strong>at</strong>ional carbon market. The ETS connects a price to each ton of emission,<br />

thereby forcing companies and industries to innov<strong>at</strong>e and cre<strong>at</strong>e low-emission standards th<strong>at</strong><br />

are needed to counter clim<strong>at</strong>e change. The ETS is based on four principles 15 :<br />

• It is a ‘cap-and-trade’ system<br />

• Particip<strong>at</strong>ion is mand<strong>at</strong>ory for businesses in the sectors covered<br />

• It contains a strong compliance framework<br />

• The market is EU-wide but taps into emission reduction opportunities in the rest of<br />

the world by accepting credits from emission-saving projects carried out under the<br />

Kyoto Protocol’s Clean Development Mechanism (CDM) and Joint Implement<strong>at</strong>ion<br />

instrument (JI). The EU ETS is also open to establishing formal links with comp<strong>at</strong>ible<br />

mand<strong>at</strong>ory cap-and-trade systems in third countries th<strong>at</strong> have r<strong>at</strong>ified the Kyoto<br />

Protocol.<br />

The cap cre<strong>at</strong>es scarcity th<strong>at</strong> facilit<strong>at</strong>es the market. Low-emission companies can sell any<br />

excess capacity on the market, while over-emission companies can either invest to lower<br />

their emissions or buy extra credits on the market. Only business are given allowances, but<br />

any other parties (government, institutions, NGOs, etc) can buy and sell on the emission<br />

market.<br />

15 EC, 2009 - The EU emissions trading Scheme<br />

http://ec.europa.eu/environment/clim<strong>at</strong>/pdf/brochures/ets_en.pdf (accessed on 24-05-2009)<br />

47


2- Norms<br />

Norms are a less rele<strong>van</strong>t tool for the subject under study. Examples of norms are maximum<br />

emission targets for cars, carbon footprint for buildings or EC-labels for products and<br />

stimul<strong>at</strong>ion of energy-friendly light bulbs and he<strong>at</strong>ing systems. Norms are also used to<br />

enhance trading of green electricity by limiting rules and transl<strong>at</strong>ing European policy to<br />

n<strong>at</strong>ional characteristics.<br />

3- Innov<strong>at</strong>ion Instruments<br />

Innov<strong>at</strong>ion instruments are financial and non-financial supports to invest in innov<strong>at</strong>ion in its<br />

widest form. Innov<strong>at</strong>ion leads to cost-reductions, efficiency and raises competitiveness of<br />

firms. The government invests in Research & Development, pilot-projects, but also tries to<br />

remove non-technological barriers by changing rules and procedures. For wind energy, a<br />

number of projects involve raising the budget for the Energy Centre Netherlands (ECN)<br />

research facilities and improving MEP (Milieu Effect Rapportage/Environment-quality Energy<br />

production) structures th<strong>at</strong> looks into the environmental impact of energy production for<br />

example offshore wind parks and IES (Energy Innov<strong>at</strong>ion Subsidy) programs to support<br />

projects and companies th<strong>at</strong> invest in green electricity. Included in this are also campaigns<br />

th<strong>at</strong> educ<strong>at</strong>e the general public in the potential of renewables. The MEP is now cancelled<br />

and included in the SDE (Stimulus Renewable Energy).<br />

4- Temporary Stimulus – SDE<br />

The SDE is the tool for stimul<strong>at</strong>ing renewable energy. Renewable energy is more expensive<br />

to produce than conventional energy. The SDE supports renewable energy production in<br />

order to compens<strong>at</strong>e for the cost inefficiency of renewable energy, the policy became active<br />

in 2008. In the SDE, the amount of the subsidy will be adapted to the market. If the energy<br />

price is high and a lot of renewable energy is produced, the loss will be smaller, so the SDE<br />

support will be less, and the other way around. The SDE can also compens<strong>at</strong>e for the<br />

revenue achieved by selling of certific<strong>at</strong>es and CO2 rights th<strong>at</strong> are won by renewable<br />

production. The amount of SDE is calcul<strong>at</strong>ed each year, and will be corrected with the<br />

electricity price. For each project, the government will subsidize the loss on each project. The<br />

SDE will accept request on a first come, first serve basis and has a yearly budget restriction.<br />

The SDE is specifically made to enhance learning. For wind <strong>at</strong> sea this means th<strong>at</strong> the<br />

tender projects are rel<strong>at</strong>ively small, in order to optimize monitoring and evalu<strong>at</strong>ion. The SDE<br />

will also allow projects to be selected on innov<strong>at</strong>iveness on top of cost-effectiveness. Fiscal<br />

measures are also included to lower tax on green energy and increase tax on carbon-<br />

intensive products.<br />

48


The results of the measures until now have not been without deb<strong>at</strong>e, the ECN researched<br />

the progress of the Schoon & Zuinig program in 2007, the next progress report is due in<br />

2010. They found th<strong>at</strong> the SDE and MEP budgets are not enough to fulfill the goals of the<br />

program, and expected 2800 MW of wind <strong>at</strong> sea if the policy was continued in the form it was<br />

oper<strong>at</strong>ional back then.<br />

The ECN concluded th<strong>at</strong> the SDE will start with a surplus budget, but this will dry out in l<strong>at</strong>er<br />

years. In none of their variants did Schoon & Zuinig reach their goals. This was partly due to<br />

lack of resources, unclear project-plans and the dur<strong>at</strong>ion of prepar<strong>at</strong>ions 16 .<br />

In reaction to these findings, the SDE budget is further increased in 2009 in order to speed<br />

up development and increase the chances of success. In March 2009, the government also<br />

issued some changes in the SDE, many of which have to do with wind <strong>at</strong> sea. The<br />

government wants to have more certainty when issuing subsidies on the basis of SDE.<br />

Especially wind <strong>at</strong> sea, which are often complex, large-scale projects th<strong>at</strong> have a long<br />

planning and completion phase.<br />

Developers th<strong>at</strong> innov<strong>at</strong>e and improve parks can get an extra additional subsidy on top of<br />

SDE to stimul<strong>at</strong>e further learning. In order to increase the flexibility of the procedures,<br />

developers can now decide when to start receiving the SDE to improve the procedures<br />

tailored to bigger parks. On top of this measure, the term of realiz<strong>at</strong>ion for wind parks is<br />

increased from 3 years to 4 years to increase trust with big park development. Efforts to<br />

even the playing field and allow for fair competition have resulted in a more direct link to the<br />

SDE and the loc<strong>at</strong>ion where loc<strong>at</strong>ion th<strong>at</strong> are further <strong>at</strong> sea <strong>at</strong> deeper loc<strong>at</strong>ions will receive<br />

more SDE, as well as taking into account wind vari<strong>at</strong>ion in the new procedures, specified to<br />

each loc<strong>at</strong>ion.<br />

Measures th<strong>at</strong> increase control on the government’s side are contractual requirements for<br />

park developers to finish their parks if they won the tender, this to increase the risk of parks<br />

not being finished. The SDE can be taken away if these risks exist. The minimum and<br />

maximum electricity price for offshore wind energy is fixed to increase the budget control for<br />

the government’s stimulus measures. Also, wind capacity th<strong>at</strong> can receive subsidy is<br />

maximised <strong>at</strong> 80% of a defined number of hours of oper<strong>at</strong>ion (different for each park). The<br />

subsidy then takes into account vari<strong>at</strong>ion in wind and prevents too much subsidy in good<br />

years and too little in bad years. 17<br />

ECN predicts th<strong>at</strong> with the current SDE, the 2011 goals will be made, but th<strong>at</strong> for the longer<br />

term additional measures should be developed. The SDE for 2009 opens in November for<br />

16<br />

PBL/ECN – Tussenstand <strong>van</strong> een aantal onderdelen uit het werkprogramma Schoon en Zuinig,<br />

November 2008<br />

17<br />

Duurzaamheidsakkoord – Convenant tussen overhead, MKB, VNO/NCW, LTO, Sta<strong>at</strong>sblad 142,<br />

2009<br />

49


wind <strong>at</strong> sea after a recalcul<strong>at</strong>ion of the electricity prices and the final alter<strong>at</strong>ions to the policy<br />

being made official.<br />

5- Intern<strong>at</strong>ional Clim<strong>at</strong>e – and Energy diplomacy<br />

An important part of the options the Dutch government has for the clim<strong>at</strong>e policies are<br />

determined by the European Union (For example the ETS system). The Netherlands will try<br />

to actively influence European policies in order to stimul<strong>at</strong>e renewable energy, the next<br />

important milestone for this process is end of 2009. In December 2009 a Clim<strong>at</strong>e Conference<br />

will be held in Copenhagen th<strong>at</strong> will develop a renewed Kyoto protocol, the Copenhagen<br />

protocol, the Conference is an important milestone for the UNFCCC (United N<strong>at</strong>ions<br />

Framework Convention on Clim<strong>at</strong>e Change). The Netherlands will try to influence the EU<br />

stance of Clim<strong>at</strong>e Change and will try to further develop the EU ETS system. The need to<br />

determine a CO2 emission price is shared by the Dutch government, however this price is the<br />

result of European political deb<strong>at</strong>e th<strong>at</strong> is only influenced indirectly, despite the effort to<br />

develop a coherent outlook by the Dutch st<strong>at</strong>e.<br />

3.2 Offshore wind energy in the Netherlands – 950 MW by 2010<br />

In this section I will look into the procedures, permits and legisl<strong>at</strong>ion th<strong>at</strong> is applicable for<br />

developing an offshore wind park. The complete legisl<strong>at</strong>ion is in the Appendix I (in Dutch).<br />

The government has issued a plan for developing 450 MW in 2010, the first step of Schoon &<br />

Zuinig. In the following box section, the government’s plan to develop 450 MW is laid out 18 .<br />

These same procedures apply for the increased target of 950 MW, after 2010 the procedures<br />

will be improved to account for the move towards <strong>6000</strong> MW in 2020. I have included the<br />

policy in order to give a complete view on the procedures and better understand some of the<br />

problems identified by the market actors.<br />

18 Draaiboek Commitering 450 <strong>Mw</strong> <strong>Wind</strong> op Zee – Ministerie <strong>van</strong> Economische Zaken - beleidsstuk, 4<br />

juni 2008<br />

50


2008<br />

Step 1: The generic part of the appraisal is finished by the government<br />

(loc<strong>at</strong>ions are to be selected by the applicants)<br />

Step 2: Criteria for the SDE subsidy are developed and published<br />

The goal is to get the most production out of the least of subsidy. In order to spark<br />

competition and innov<strong>at</strong>ion, a tender is set up.<br />

Step 3: Consult<strong>at</strong>ion with wind sector on subsidy criteria.<br />

End of 2008:<br />

The prospective wind park developers are asked if they wish to continue with their<br />

parks (By issuing W.b.r permits and M.E.R)<br />

Parties th<strong>at</strong> wish to exploit a wind park need to apply for a Wbr-permit, th<strong>at</strong>, once<br />

given, will allow them to develop and build a park in the exclusive economic zone <strong>at</strong><br />

sea.<br />

The permit will be valid for three years, so the park needs to be ready within this time.<br />

The wind park developer needs to provide the st<strong>at</strong>e with document<strong>at</strong>ion th<strong>at</strong> it has<br />

sufficient funds to complete the park.<br />

Then, the following document<strong>at</strong>ion needs to be provided:<br />

- Coordin<strong>at</strong>es describing the outer limits of the park<br />

- N<strong>at</strong>ure and design of the park<br />

- Proof of usefulness and necessity of the park<br />

- D<strong>at</strong>a on the ramific<strong>at</strong>ions of the use of the sea (effects for fishing,<br />

oil&gas, shipping etc)<br />

- Effects for the environment (by issuing a M.E.R, environment effect<br />

report)<br />

- Development and construction plan<br />

- Maintenance plan<br />

- Safety plan<br />

- Lighting plan (for shipping safety)<br />

- Calamity plan<br />

- The dur<strong>at</strong>ion of use of the park<br />

- Plan for the extraction of the park<br />

This permit does not include any cabling or connection to the electricity grid, an extra<br />

procedure needs to be undertaken to get permission for the cables.<br />

51


February 2009:<br />

Step 4b: The government valid<strong>at</strong>es the M.E.R. Adapt<strong>at</strong>ions can be made on basis of<br />

nautical reasons, ecology or risks associ<strong>at</strong>ed with air-traffic.<br />

There are 4 possible scenario’s:<br />

1.1 – The park needs changes because of nautical risks, changes can be made to<br />

get a positive M.E.R (in case of too much changes considering the time limit, the<br />

M.E.R is lost)<br />

1.2 – Side effects occur during M.E.R valid<strong>at</strong>ion th<strong>at</strong> need <strong>at</strong>tention. If other parks do<br />

not have these neg<strong>at</strong>ive effects, the M.E.R is lost. Or compens<strong>at</strong>ing measures<br />

are needed)<br />

1.3 – If the air-traffic to oil or gas pl<strong>at</strong>forms is <strong>at</strong> risk, the wind park developer and the<br />

pl<strong>at</strong>form owner need to consult each other. They need to resolve the problem or<br />

the st<strong>at</strong>e will make a decision<br />

1.4 - The loc<strong>at</strong>ion of the park is in direct conflict with the Delta commission advice.<br />

The Delta commission made an advice on the clim<strong>at</strong>e sustainable design of the<br />

Netherlands for the future. This includes loc<strong>at</strong>ion planning for use of the <strong>Sea</strong>.<br />

March 2009:<br />

Deadline for filing a complete Wbr and M.E.R report.<br />

First quarter 2009:<br />

Further developed subsidy requirements are developed and published (SDE).<br />

Park developers get qualified when given a Wbr, a solid business plan, solid<br />

financial plan and sufficient amount of knowledge and experience.<br />

Recently, the developer Airtricity has been given the permission to develop wind<br />

park “Breeveertien II” th<strong>at</strong> will have a capacity of 350 MW 19 . An overview of the<br />

current st<strong>at</strong>us of the initi<strong>at</strong>ives for wind parks <strong>at</strong> sea can be found in the Appendix I.<br />

December 2009:<br />

Step 5: Subsidy claims need to be filed <strong>at</strong> the ministry of Economic Affairs.<br />

19 Groen licht voor windparken op zee, Nu.nl website, accessed on 10-06-09<br />

http://www.nu.nl/economie/1923076/groen-licht-voor-windmolenpark-op-zee.html<br />

52


December 2009 – April 2010<br />

Step 6: Subsidy claims are considered by the ministry using the known criteria,<br />

developed in the first quarter of 2009. (Max. of 450 MW is subsidized)<br />

April 2010:<br />

SDE subsidy applied to 1 or 2 parks, with a budget restriction. Should the parks need<br />

less subsidy to achieve 450 MW, the remaining subsidy will be used for more<br />

capacity.<br />

Until November 2012:<br />

Step 8: Government ministries check the building and construction of the wind parks.<br />

Wbr permits th<strong>at</strong> did not lead to a complete park will be nullified.<br />

The first step for wind <strong>at</strong> sea, committing to 950 MW in 2010 will be achieved with the current<br />

policy and legisl<strong>at</strong>ive procedures. However, to be able to get to the end goals of Schoon &<br />

Zuinig, <strong>6000</strong> MW wind <strong>at</strong> sea by 2020 the procedures must be drastically improved. The<br />

growth r<strong>at</strong>e after 2010 would mean the commissioning of 550 MW of capacity each year from<br />

2010 onwards. This r<strong>at</strong>e of growth will mean a dram<strong>at</strong>ic increase in SDE subsidy, as well as<br />

faster implement<strong>at</strong>ion of procedures and legisl<strong>at</strong>ion.<br />

In the next paragraph I will describe some of the important stakeholders in the development<br />

of wind <strong>at</strong> sea, and examine their experiences with the government and government policy<br />

so far and rel<strong>at</strong>e this to the MSP theory.<br />

3.3 <strong>Wind</strong> Energy in the Netherlands: A Multi-Stakeholder Approach<br />

The government has st<strong>at</strong>ed th<strong>at</strong> the commitment, knowledge and experience of market<br />

actors and research centers are vital in the development of <strong>6000</strong> MW wind <strong>at</strong> sea in 2020 20 .<br />

Both in the original Schoon & Zuinig plan and in the analysis for the feasibility of the <strong>6000</strong><br />

MW goal this has been clearly st<strong>at</strong>ed as one of the preconditions. In the Sustainability<br />

agreement, signed in 2007 and active till 2020, the government, represented by five<br />

ministers and two secretaries of st<strong>at</strong>e, and represent<strong>at</strong>ives of the employer and employee<br />

associ<strong>at</strong>ions and MKB have signed a contract th<strong>at</strong> included: “For the realiz<strong>at</strong>ion of the<br />

ambitions the parties need each other. The government cannot do without market actors th<strong>at</strong><br />

are entrepreneurial and take initi<strong>at</strong>ive, the market actors need consistent government policy<br />

20 Reactie op kosten/ b<strong>at</strong>en analyse <strong>6000</strong> <strong>Mw</strong> wind op zee, Minister <strong>van</strong> EZ Brinkhorst, 19-09-2005<br />

53


and clear rules of the game to be able to make sound investments. Both government and<br />

market have direct interest in a joint str<strong>at</strong>egy for a smart and efficient contribution to the<br />

clim<strong>at</strong>e problems by The Netherlands” and “Parties underline th<strong>at</strong> far reaching commitment is<br />

needed to achieve the goals of this agreement. …. The government policy will be aimed <strong>at</strong><br />

providing a maximum of certainty in making the goals, and also offer flexibility to the market<br />

to make the most cost-effective measures” (Sectorakkoord Energie 2008 – 2020 –<br />

Convenant tussen Rijksoverheid en de energiebranches in het kader <strong>van</strong> Schoon & Zuinig,<br />

p. 2, complete contract in Appendix II in Dutch).<br />

The sectoral agreement between government and the Energy sector for 2008 – 2020 is part<br />

of the Sustainability agreement described above, and st<strong>at</strong>es th<strong>at</strong> both parties should make a<br />

joint plan for the realiz<strong>at</strong>ion of <strong>6000</strong> MW <strong>at</strong> 2020. I will use Stakeholder theory in order to<br />

analyze how the cooper<strong>at</strong>ion between the market and the government has taken shape. The<br />

goal of stakeholder analysis is to develop cooper<strong>at</strong>ion between the actors involved in<br />

offshore wind development and develop cooper<strong>at</strong>ion. By cooper<strong>at</strong>ion, a successful outcome<br />

is pursued.<br />

Multiple Stakeholder Processes (MSPs) aim to bring together all major stakeholders in a new<br />

form of communic<strong>at</strong>ion, decision finding or decision making structure. They are based on<br />

recognition of the importance of achieving equity and accountability in communic<strong>at</strong>ion<br />

between stakeholders; on democr<strong>at</strong>ic principles of transparency and particip<strong>at</strong>ion, and aim to<br />

develop partnerships and strengthen networks between and among stakeholders (Hemm<strong>at</strong>i,<br />

2002, p.24). MSPs can be valuable tools in the sustainability deb<strong>at</strong>e, as MSPs require a<br />

process of dialogue and ultim<strong>at</strong>e consensus-building of all stakeholders as partners.<br />

Stakeholders can build rel<strong>at</strong>ionships and knowledge which will enable them to innov<strong>at</strong>e and<br />

cre<strong>at</strong>e solutions for the many challenges facing offshore wind energy. The values of a<br />

successful MSP mean th<strong>at</strong> government g<strong>at</strong>hers all stakeholders for consult<strong>at</strong>ions, dialogue<br />

and/or consensus-building and/or ongoing implement<strong>at</strong>ion, monitoring and evalu<strong>at</strong>ion<br />

processes. However, MSPs should include the right partners, partners th<strong>at</strong> have credibility,<br />

interest and public support, groups with good inform<strong>at</strong>ion and fresh, cre<strong>at</strong>ive ideas who can<br />

add to the process and uphold an output-oriented focus. The St<strong>at</strong>e, as leader in the MSP,<br />

needs to have a strong vision and practice empowering and collabor<strong>at</strong>ive leadership. This<br />

will broaden the discussion and refrain from narrow minded goals of stakeholders to an<br />

inclusive goal th<strong>at</strong> will reap broader public support.<br />

The wind energy sector in the Netherlands is very large and consists of an enormous amount<br />

of companies, NGOs, government actors, found<strong>at</strong>ions etc. This thesis focuses on<br />

54


government policy and the effects and ramific<strong>at</strong>ions these policies have on the development<br />

of offshore wind parks. In the next paragraph a number of influential stakeholders will be<br />

described. Hereafter, their standpoints and role are explained with rel<strong>at</strong>ion to government<br />

policy as it is now. Their comments are analyzed and rel<strong>at</strong>ed to the MSP theory in order to<br />

be able to see where the policies are performing adequ<strong>at</strong>e or not.<br />

3.3.1 – Stakeholders in Offshore wind energy in The Netherlands<br />

I have included the scheme shown in Figure 3.1 to aid in keeping the overview in the rest of<br />

the chapter. These actors are involved in offshore wind parks, and have experience with in<br />

the field and with the policy, the main goal of this thesis. I have ordered the stakeholders by<br />

separ<strong>at</strong>ing government and market positions, to be able to show the difference of interests<br />

figur<strong>at</strong>ively as well. NGOs fall in between this separ<strong>at</strong>ion. First, I will introduce the actors in<br />

the figure, then I will proceed to clarify their respective positions.<br />

Government:<br />

Senternovem: www.senternovem.nl<br />

Figure 3.1 – Stakeholders in offshore wind energy<br />

Government Market<br />

Senternovem<br />

TOW<br />

Noordzeewind<br />

N<strong>at</strong>uur&Milieu<br />

/Kafka<br />

NWEA<br />

Prinses Amalia<br />

Senternovem is an agency th<strong>at</strong> is a part of the Ministry of Economic affairs. They are<br />

responsible, on behalf of the government, to stimul<strong>at</strong>e sustainable economic growth by<br />

bridging the gap between market and government, both n<strong>at</strong>ional and intern<strong>at</strong>ional.<br />

Companies, institutions and governments can ask for advice and financial support.<br />

55


Senternovem acts as the main access point to the government subsidies and legisl<strong>at</strong>ure for<br />

the market actors.<br />

Str<strong>at</strong>egiegroep Transitie Offshore:<br />

The government has instituted a department of Energy Transition to influence the market, to<br />

stimul<strong>at</strong>e public-priv<strong>at</strong>e cooper<strong>at</strong>ion and to develop an innov<strong>at</strong>ion agenda. This department<br />

has formed a transition str<strong>at</strong>egy th<strong>at</strong> will cover the a long term str<strong>at</strong>egy until 2020. It also<br />

points the government on any policy shortcomings and guards consistency in policy and a<br />

stabile development of new policy. The str<strong>at</strong>egy group Transition Offshore (TOW) has put<br />

together a str<strong>at</strong>egy for the long term development of Offshore <strong>Wind</strong> Energy, published in<br />

November 2007.<br />

Market actors:<br />

NWEA – www.nwea.nl<br />

The NWEA (Netherlands <strong>Wind</strong> Energy Associ<strong>at</strong>ion) is a combin<strong>at</strong>ion of all organiz<strong>at</strong>ions and<br />

companies th<strong>at</strong> are active in the wind energy sector in the Netherlands. The goal of NWEA is<br />

to persuade the government and corpor<strong>at</strong>e actors to actively improve wind energy. Members<br />

of NWEA are developers of wind parks, producers, energy companies, consultancy bureaus,<br />

research-facilities, maintenance companies, financial companies and suppliers. They have a<br />

commission offshore th<strong>at</strong> consists of the actors th<strong>at</strong> issued initi<strong>at</strong>ives for offshore parks and<br />

this commission has the goal to contribute to stabile and continuous development of wind <strong>at</strong><br />

sea. The NWEA is also associ<strong>at</strong>ed with EWEA, the European <strong>Wind</strong> Energy Associ<strong>at</strong>ion.<br />

Noordzeewind (Shell & Nuon) – www.noordzeewind.nl<br />

Noordzeewind is a collabor<strong>at</strong>ion between Shell and Nuon. The collabor<strong>at</strong>ion is specifically<br />

set up for the development, construction and management of the offshore wind park in<br />

Egmond aan Zee. Both companies are motiv<strong>at</strong>ed to sustainability of energy, and think wind<br />

is a important contribution.<br />

Nuon is an energy company active in the Netherlands, Belgium and Germany. Nuon aims to<br />

gener<strong>at</strong>e green electricity and contribute to sustainable energy. Shell on the other hand is<br />

one of the biggest global energy companies, with their main activity in traditional fossil fuels.<br />

They acknowledge the growing importance of renewable energy in the future. Remarkably,<br />

Shell recently decided to stop investing in wind energy.<br />

56


The government (Ministry of Economic Affairs) is involved in the project in Egmond by<br />

supporting it with funding as well as with a research project th<strong>at</strong> will help future wind park<br />

development. The loc<strong>at</strong>ion of the park has been realized by government research and<br />

planning, and Noordzeewind won the tender and started developing the wind park. During<br />

the whole process of developing and building the park, all problems and bottlenecks are<br />

recorded as part of the study project.<br />

Prinses Amalia <strong>Wind</strong>park (Econcern & Eneco) – www.prinsesamaliawindpark.eu<br />

The Prinses Amalia <strong>Wind</strong>park is a joint venture from the sustainable energy group Econcern,<br />

an investment corpor<strong>at</strong>ion and energy company Eneco. Econcern is a holding company th<strong>at</strong><br />

has the goal to provide sustainable energy for everybody. Next to the Netherlands, Econcern<br />

is also involved in offshore wind energy in the United Kingdom, Belgium and Germany.<br />

Eneco is one of three biggest energy companies of the Netherlands. Eneco’s key processes<br />

are transport, trade and distribution of energy en rel<strong>at</strong>ed products and services. The<br />

development of the Prinses Amalia Park started in 1998, after starting the process of getting<br />

the necessary permits, the final permission was issued in 2001. Beginning 2005, Eneco and<br />

the holding company sign the contract for building and exploiting the park. In 2008 the park<br />

became fully oper<strong>at</strong>ional. The Amalia park used an innov<strong>at</strong>ive financial construction to get<br />

the necessary funds given th<strong>at</strong> a large part is financed with loans from a number of banks.<br />

The risks accompanied by the development of large-scale offshore are hedged by this<br />

construction. The innov<strong>at</strong>ions of the financial construction include sharing risks with bank<br />

coalition to hedge for cost-increases, mechanisms for realizing shorter loan periods, limiting<br />

interest payments and guarantees in turbine delivery with the turbine producer. On top of<br />

this, optimal use of subsidy schemes and long term insurance are innov<strong>at</strong>ions th<strong>at</strong> increase<br />

the effectiveness of the financial construction.<br />

NGOs:<br />

Stichting N<strong>at</strong>uur & Milieu (Zeekracht) – www.zeekracht.nl<br />

Stichting N<strong>at</strong>uur & Milieu is a found<strong>at</strong>ion th<strong>at</strong> initi<strong>at</strong>ed Zeekracht (<strong>Sea</strong>force), a non-profit<br />

cooper<strong>at</strong>ion. Zeekracht tries to put the Netherlands back on the map with innov<strong>at</strong>ive clean<br />

energy by particip<strong>at</strong>ion of the Dutch public. Mass particip<strong>at</strong>ion of civilians in energy<br />

production is new in The Netherlands. The focus of the plan is on wind energy <strong>at</strong> sea, the<br />

plan was put in action in 2008. Zeekracht has three parts, the first is a strong lobby of the<br />

found<strong>at</strong>ion to urge the government to quickly make a decision on <strong>6000</strong> MW by 2020 and also<br />

issue the needed budgets.<br />

57


The second part is to involve civilians to build their own wind park. The third part is to form a<br />

coalition of companies and organiz<strong>at</strong>ions th<strong>at</strong> commit themselves to building this park.<br />

3.3.2 Problems with the policy<br />

Noordzeewind<br />

Figure 3.2 – Stakeholders in Offshore <strong>Wind</strong> Energy - Noordzeewind<br />

Government Market<br />

Senternovem<br />

TOW<br />

Noordzeewind<br />

N<strong>at</strong>uur&Milieu<br />

/Kafka<br />

The OWEZ park is different from the other parks, because the development and planning<br />

has been done for a gre<strong>at</strong> deal by the government. An important difference is th<strong>at</strong> the<br />

loc<strong>at</strong>ion of the park was already labeled as a loc<strong>at</strong>ion suitable for wind energy before a<br />

market actor was involved in the construction of the actual park. An intensive monitoring and<br />

evalu<strong>at</strong>ion system is developed to stimul<strong>at</strong>e learning on technological, innov<strong>at</strong>ion and<br />

environmental impacts as well as legisl<strong>at</strong>ion. The findings are public and are published,<br />

which allows for open access to inform<strong>at</strong>ion. The Noordzeewind team has described the<br />

process of development of the park and had remarks on the procedures 21 . Important remarks<br />

in this report include technical aspects of wind park development, but permit procedures and<br />

subsidy schemes. Thes schemes have to be optimized and can gre<strong>at</strong>ly increase the<br />

efficiency of the process for market actors. Also, a direct link to Wbr permit and SDE subsidy<br />

is promoted as this takes away uncertainty for developers. Noordzeewind stresses th<strong>at</strong> the<br />

government should be responsible for loc<strong>at</strong>ion management due to the varying and important<br />

stakes <strong>at</strong> the North <strong>Sea</strong>. The government should lead in taking responsibility in the loc<strong>at</strong>ion<br />

planning <strong>at</strong> the North <strong>Sea</strong>, as market actors are not suitable for this task. This will also<br />

gre<strong>at</strong>ly reduce the MER process as the loc<strong>at</strong>ions are already reserved for wind, this way a<br />

MER can be done more efficiently and keep the costs down.<br />

21 Rapportage Proces vergunningverlening OWEZ – August 2007<br />

NWEA<br />

Prinses Amalia<br />

58


The monitoring and evalu<strong>at</strong>ion program is a very interesting construction and should be set<br />

up with every offshore wind park. Learning and innov<strong>at</strong>ion are important drivers for<br />

development and cost-effectiveness in an industry th<strong>at</strong> is still in development. The very high<br />

profile and high expect<strong>at</strong>ions offshore wind enjoys can only be met if the current initi<strong>at</strong>ives<br />

are very well planned and evalu<strong>at</strong>ed. However, Noordzeewind and OWEZ have a special<br />

st<strong>at</strong>us as they enjoyed close cooper<strong>at</strong>ion with the government and knew of this project’s<br />

details <strong>at</strong> the start of the tender. Other market actors th<strong>at</strong> move into wind energy will be<br />

reluctant to share inform<strong>at</strong>ion as this will damage their competitive position. Shell, one of the<br />

partners in Noordzeewind, is very positive about the cooper<strong>at</strong>ion with the government on this<br />

project, although procedures were <strong>at</strong> times slow and inefficient, a lot of improvement is made<br />

on streamlining the procedures and permits. Shell also values the thorough procedures th<strong>at</strong><br />

lead to the development of an offshore wind park as these decisions have large ramific<strong>at</strong>ion<br />

for the North <strong>Sea</strong>, the government’s budget and are developed for <strong>at</strong> least 30 years. This is a<br />

process th<strong>at</strong> needs careful planning and <strong>at</strong>tention and a thorough and intensive prepar<strong>at</strong>ion<br />

also gre<strong>at</strong>ly influences the success of development in l<strong>at</strong>er stages. Together with a<br />

monitoring program this will gre<strong>at</strong>ly improve the success of offshore wind energy in general.<br />

For the OWEZ park, the MSP ground rules are well included in the development, government<br />

cre<strong>at</strong>ed clear and concise plans for the park, looked for suitable market actors via tender and<br />

has developed a fruitful cooper<strong>at</strong>ion. However, these findings are not supported by all<br />

stakeholders.<br />

Figure 3.3 – Stakeholders in Offshore <strong>Wind</strong> Energy - NWEA<br />

Government Market<br />

Senternovem<br />

TOW<br />

Noordzeewind<br />

N<strong>at</strong>uur&Milieu<br />

/Kafka<br />

NWEA<br />

Prinses Amalia<br />

59


NWEA:<br />

The NWEA, as the associ<strong>at</strong>ion representing market actors in wind energy has a vital role in<br />

market cooper<strong>at</strong>ion. Various market actors have st<strong>at</strong>ed th<strong>at</strong> the NWEA must play an<br />

important role in the forming of policy. Being an industry associ<strong>at</strong>ion, the NWEA is not<br />

susceptible for competition, as they represent the general interest of their following. Although<br />

the NWEA is not the only associ<strong>at</strong>ion in wind energy, it certainly enjoys a high profile in the<br />

market. The NWEA has provided a vision for offshore wind online on February 2008 22 . The<br />

most dominant critic on the government policy is the lack of pull and the need for a coalition<br />

approach to be able to construct policy th<strong>at</strong> is accur<strong>at</strong>e, efficient, has a broad base and takes<br />

into account the wishes and needs of consumers of the policy, the market actors involved in<br />

wind, in an early stage. More transparency in loc<strong>at</strong>ion studies and procedures, risks and<br />

project planning is stressed in their reaction, aspects they miss in the government as an<br />

credible partner. Market actors need better and more direct represent<strong>at</strong>ion in the policy<br />

development, and the NWEA is prepared to perform this role. However, they feel th<strong>at</strong> the<br />

government has not been committed to include market actors enough, and are unclear on<br />

improvements to procedures as well as the role of wind park developers as active<br />

participants in the forming of government initi<strong>at</strong>ives to improve legisl<strong>at</strong>ion and procedures.<br />

Figure 3.4 – Stakeholders in Offshore <strong>Wind</strong> Energy – N<strong>at</strong>uur&Milieu<br />

Government Market<br />

Senternovem<br />

TOW<br />

Noordzeewind<br />

N<strong>at</strong>uur&Milieu<br />

/Kafka<br />

NWEA<br />

Prinses Amalia<br />

22 Dossier Offshore – NWEA visie op toekomst offshore windenergie - http://www.nwea.nl/dossieroffshore#NWEA_visie<br />

(accessed on 05-04-2009)<br />

60


Stichting N<strong>at</strong>uur & Milieu<br />

N<strong>at</strong>uur & Milieu has issued a research into the critical points in the legisl<strong>at</strong>ive procedures for<br />

developing a wind park by the Kafka Brigade. They pointed out a number of problems th<strong>at</strong><br />

developers face with the current policy, published in August 2008. Their recommend<strong>at</strong>ions<br />

are on the technical ramific<strong>at</strong>ions of the current procedures, stressing the diffuse<br />

responsibilities within the government and the inefficiency in contacting the government and<br />

lack of clarity on the connection to the electricity grid. Their comment involves shifting the<br />

responsibility for all offshore wind to the Ministry of Economic Affairs only to resolve this 23 .<br />

The found<strong>at</strong>ion also critiqued shifting targets on the part of the goverment, from having <strong>6000</strong><br />

MW developed and oper<strong>at</strong>ional to only committing to <strong>6000</strong> MW is an important step as this<br />

will mean stretching the deadline from having built, to having planned. Furthermore, with the<br />

goals clear, the pace and loc<strong>at</strong>ion study must be finished as soon as possible as this gre<strong>at</strong>ly<br />

influence transparency and development p<strong>at</strong>terns, which is lacking now. As it is now, a large<br />

number of parties are waiting for the government to issue a longer term plan including<br />

technical improvements in permits, but also, and most important, a clear str<strong>at</strong>egy on<br />

declaring wind loc<strong>at</strong>ions as well as how market actors can apply for these loc<strong>at</strong>ions and wh<strong>at</strong><br />

the details will be in procuring the tender for each loc<strong>at</strong>ion towards the complete <strong>6000</strong> MW.<br />

We have identified a number of important stakeholders, as well as their respective positions<br />

on the government policy surrounding offshore wind parks for the 950 MW th<strong>at</strong> is being<br />

developed for 2010, and the lack of MSP values th<strong>at</strong> this policy shows. In the next paragraph<br />

I will clarify wh<strong>at</strong> alter<strong>at</strong>ions are planned for the policy th<strong>at</strong> involves the growth to <strong>6000</strong> MW,<br />

and determine wh<strong>at</strong> improvements must be made solve the problems pointed out by the<br />

stakeholders and government alike. First, I will describe the vision on the current policy by<br />

the government itself.<br />

23 Kafkabrigade – Quickscan Zeekracht – August 2008<br />

61


3.4 New policy cre<strong>at</strong>ion for offshore wind parks<br />

Figure 3.5 – Stakeholders in Offshore <strong>Wind</strong> Energy - TOW<br />

The government has put together a pl<strong>at</strong>form for Energy Transition, th<strong>at</strong> will advice on how to<br />

make the transition to sustainable energy supply. The pl<strong>at</strong>form includes government,<br />

companies, NGOs, think tanks, etc. in order to involve a gre<strong>at</strong> deal of stakeholders in the<br />

decision process. Specifically for offshore wind energy, a str<strong>at</strong>egy group Transition Offshore<br />

<strong>Wind</strong> (TOW) has put together a report on how to realize <strong>6000</strong> MW by 2020. The str<strong>at</strong>egy<br />

group concludes th<strong>at</strong> for the realiz<strong>at</strong>ion of <strong>6000</strong>MW offshore wind in 2020 if a stable<br />

environment for the development is cre<strong>at</strong>ed. Financial support from the government is<br />

necessary, but this will decline as learning effects and innov<strong>at</strong>ion will support and increase<br />

profitability of future wind parks, speeding up the process to cost-effective oper<strong>at</strong>ion.<br />

In optimizing these effects it is the task of the government is to cre<strong>at</strong>e the right preconditions<br />

for a transition to sustainable energy. There are 13 steps th<strong>at</strong> should be undertaken to<br />

successfully make the transition to 2020 and beyond, as st<strong>at</strong>ed in the TOW report. On top of<br />

the TOW group, a recent effort is underway in the form of the commission Veenman, th<strong>at</strong> is<br />

cre<strong>at</strong>ed in 2009 to investig<strong>at</strong>e opportunities for a better link between the market actors and<br />

the government, and a possible coalition.<br />

Government Market<br />

Senternovem<br />

TOW<br />

Noordzeewind<br />

N<strong>at</strong>uur&Milieu<br />

/Kafka<br />

NWEA<br />

Prinses Amalia<br />

62


“Organis<strong>at</strong>ion”<br />

1- Cre<strong>at</strong>e a leading coalition of government and market actors th<strong>at</strong> work on the basis of an<br />

agreement to <strong>at</strong>tain specified goals.<br />

“Cre<strong>at</strong>ing preconditions”<br />

2- Finish the current round of 950 MW in 2011.<br />

3- Issue a loc<strong>at</strong>ion study to give wind energy its own zones on the North <strong>Sea</strong><br />

4- Cre<strong>at</strong>e and execute a new policy for large-scale offshore wind parks from 2012 on.<br />

5- Cre<strong>at</strong>e a pl<strong>at</strong>form for consult<strong>at</strong>ion for the various parties th<strong>at</strong> are involved in the North <strong>Sea</strong><br />

planning<br />

6- Cre<strong>at</strong>e a clear and efficient alloc<strong>at</strong>ion method for the whole process from issueing a request to<br />

build a wind park to the realiz<strong>at</strong>ion.<br />

7- Deliver on a stable system for government funding for sustainable energy.<br />

8- Cre<strong>at</strong>e netplanning for the transport of electricity (n<strong>at</strong>ional & Intern<strong>at</strong>ional)<br />

9- Cre<strong>at</strong>e a program to stimul<strong>at</strong>e innov<strong>at</strong>ive development from R&D and implement<strong>at</strong>ion<br />

experiences.<br />

“Execution”<br />

10- Cre<strong>at</strong>e infrastructure for electricity <strong>at</strong> sea so the wind parks can be connected to the grid<br />

11- Adapt the electrical infrastructure to facilit<strong>at</strong>e the dynamics of wind electricity production.<br />

12- Issueing of new wind parks in large units of 1000+ MW.<br />

13- Design, finance, build and oper<strong>at</strong>e with <strong>at</strong>tention to knowledge cre<strong>at</strong>ion (implement<strong>at</strong>ion,<br />

innov<strong>at</strong>ion, improvement).<br />

Source: Str<strong>at</strong>egiegroep Transitie Offshore <strong>Wind</strong>, November 2007 – <strong>Wind</strong> energie op Zee, Een transitiepad naar een<br />

duurzame elektriciteitsvoorziening<br />

The TOW advice is divided into three segments in order to move toward <strong>6000</strong> MW in 2020,<br />

the first being organiz<strong>at</strong>ion, the advice stresses a coalition between market and government,<br />

in line with the critique of NWEA. Cre<strong>at</strong>ing preconditions for the capacity increase includes<br />

steps th<strong>at</strong> need to be fulfilled in order to make further development possible, stressing to<br />

develop new policy for offshore wind parks after 2012, take control of loc<strong>at</strong>ion planning by<br />

making this a government priority and streamline this process by setting up a pl<strong>at</strong>form for the<br />

63


various parties active in the North <strong>Sea</strong>. This pl<strong>at</strong>form should include departments like the<br />

Ministry of Economic Affairs, the Minsitry of VROM, responsible or spacil planning and<br />

environment, Defense, Rijksw<strong>at</strong>ersta<strong>at</strong>, th<strong>at</strong> is responsible or planning and regul<strong>at</strong>ing the<br />

North <strong>Sea</strong> and Fishery who all have an important claim on the North <strong>Sea</strong> territory 24 .<br />

(SOURCE INTERVIEW) This will lead to a clear alloc<strong>at</strong>ion method for the parks th<strong>at</strong> should<br />

be backed by a sufficient funding mechanism. Another important step is to account for the<br />

netplanning, allowing electricity from the parks on the electricity grid. To improve innov<strong>at</strong>ion<br />

and R&D in the industry, monitoring and evalu<strong>at</strong>ion programs must be coupled to each park<br />

under development. Then, to meet the <strong>6000</strong> MW target in 2020, parks must be alloc<strong>at</strong>ed in<br />

b<strong>at</strong>ches of 1000MW+ capacities. We will look <strong>at</strong> recommend<strong>at</strong>ions by Senternovem on the<br />

offshore wind policy and a SWOT analysis of the energy market in the Netherlands in the<br />

next paragraph, before analyzing the value of the proposed improvements.<br />

In the energy monitor for 2008 25 , a SWOT analysis is performed of the current energy<br />

landscape in the Netherlands. The goals of the government are st<strong>at</strong>ed and critical steps are<br />

formul<strong>at</strong>ed for offshore wind th<strong>at</strong> further underline the TOW and market comments on current<br />

procedures. The tasks for the government in the next 2 years are:<br />

1- The government shall cre<strong>at</strong>e conditions for offshore parks to be developed and built<br />

in high volumes. The tenders for the parks will leave room for innov<strong>at</strong>ive concepts.<br />

2- The government will arrange for a connection of the parks to the electricity grid.<br />

3- The government will stimul<strong>at</strong>e net-oper<strong>at</strong>ors to innov<strong>at</strong>e, and will cre<strong>at</strong>e norms.<br />

4- The government will research how investors in sustainable energy can get more<br />

certainty, including the help of financial instruments.<br />

24 Interview Dhr. E Buddenbaum – Director<strong>at</strong>e General for Energy and Telecommunic<strong>at</strong>ios , Ministry of<br />

Economic Affairs.<br />

25 Energie Monitor 2008, Senternovem<br />

Government Market<br />

Senternovem<br />

TOW<br />

Noordzeewind<br />

N<strong>at</strong>uur&Milieu<br />

/Kafka<br />

NWEA<br />

Prinses Amalia<br />

64


While the government should also improve certainty for investors by looking into financial<br />

instruments th<strong>at</strong> might give more long term stability and transparency on costs and benefits<br />

of offshore wind parks. The grid connection of offshore wind energy to the mainland is again<br />

stressed, including decisions on the costs as well as where to place the responsibility for this<br />

connection. Increasing scale of development and a focus on innov<strong>at</strong>ion and learning are<br />

again underlined.<br />

Further improvements are to be found in the SWOT analysis th<strong>at</strong> was performed on the total<br />

energy mix in the Netherlands. I have selected the Strengths, Weaknesses, Opportunities<br />

and Thre<strong>at</strong>s th<strong>at</strong> are applicable to wind energy.<br />

Strengths<br />

- Good geographical position <strong>at</strong> sea, good<br />

logistic infrastructure<br />

- Knowledge infrastructure (Universities,<br />

ICT) will lead to development of smart<br />

grids<br />

Weaknesses<br />

- Lack of direction in<br />

government policy<br />

(Offshore wind)<br />

- Lack of intern<strong>at</strong>ional<br />

connection to EU policy<br />

- Knowledge development<br />

does not link to market<br />

actors<br />

- Lack of communic<strong>at</strong>ion<br />

and joint oper<strong>at</strong>ion in<br />

knowledge institutes and<br />

the market<br />

- Financing risks for new<br />

technologies too high<br />

- Permit structure for new<br />

technologies is lacking<br />

- Entrepreneurship is not<br />

well developed<br />

65


Opportunities<br />

- Clim<strong>at</strong>e change and the<br />

need to take action is<br />

widespread<br />

- Energy dependency on<br />

instable countries is seen<br />

as a bigger problem<br />

- High energy prices make<br />

for increased cost-<br />

efficiency of sustainable<br />

altern<strong>at</strong>ives<br />

- Local environmental<br />

characteristics can spark<br />

solution-oriented<br />

developments<br />

Thre<strong>at</strong>s<br />

- insufficient government<br />

support in innov<strong>at</strong>ion<br />

phase<br />

- lack of results of<br />

government policy and<br />

unclear focus due to<br />

insufficient knowledge in<br />

energy innov<strong>at</strong>ion<br />

- Lack of cooper<strong>at</strong>ion and<br />

leadership thre<strong>at</strong>ens<br />

innov<strong>at</strong>ion<br />

- Sc<strong>at</strong>tered development of<br />

sustainable energy harms<br />

its position in rel<strong>at</strong>ion to<br />

fossil energy<br />

The most important impediments to innov<strong>at</strong>ion include a lack of direction of the government,<br />

also financially, th<strong>at</strong> damages market development of sustainable energy by entrepreneurs.<br />

Large scale development of offshore wind energy is impeded by lack of confidence in the<br />

government’s performance (loc<strong>at</strong>ions, connection to grid) to successfully deploy these in<br />

time. As long as there is a lack of clarity, the investment clim<strong>at</strong>e will be neg<strong>at</strong>ive.<br />

The government has put out the guidelines for new policy, which do include some of the<br />

recommend<strong>at</strong>ions of the stakeholders. The government will point out “wind areas” to be<br />

specified in the N<strong>at</strong>ional W<strong>at</strong>erplan 2009 th<strong>at</strong> is to be released <strong>at</strong> the end of 2009. The wind<br />

areas are zones reserved for wind energy th<strong>at</strong> should be able to provide <strong>6000</strong> MW, with a<br />

total surface of 1000-1500 km2. The decision for determining wind areas is made by MER<br />

and the N<strong>at</strong>ional W<strong>at</strong>erplan. These areas will be hold free, and are directly linked to the SDE<br />

subsidy. This effectively cre<strong>at</strong>es zones th<strong>at</strong> will be tendered to market actors and can be<br />

developed to the adequ<strong>at</strong>e capacity. Periodically, the government opens one of these areas<br />

by a tender for subsidy and permits. The market actor th<strong>at</strong> gets the tender will get a certain<br />

period (th<strong>at</strong> can be discussed) to develop, build and oper<strong>at</strong>e the park. The government will<br />

allow smaller parties to be included in the tender, although they will not be able to directly<br />

build 1000MW+, the phased development will allow them more equal positions in tender<br />

procedures. In order to be able to closely monitor and control the winning parties are<br />

66


committed to the park development, the government has the ability to retract the tender in<br />

case not enough progress is made. The fundamental aspect in the tender is to issue the park<br />

to the developer th<strong>at</strong> can cre<strong>at</strong>e the most capacity using the least subsidy. Coupled to this<br />

policy is a monitoring process th<strong>at</strong> will have to allow the government to be able to check the<br />

cost and investments needed for realiz<strong>at</strong>ion of the park. Market actors will have to agree with<br />

huge transparency with the government on their part. The market actor th<strong>at</strong> gets the license<br />

issues a Wbr (incl. MER) permit procedure, the government will issue the permit, by fine<br />

tuning the characteristics with the N<strong>at</strong>ional W<strong>at</strong>erplan. This policy is an enormous<br />

improvement as the government will already issue the suitable loc<strong>at</strong>ions, th<strong>at</strong> has worked<br />

very well for the OWEZ, and accounted for much frustr<strong>at</strong>ion for the other parks. Now, MER<br />

procedures will be less costly and the interested parties will not overload the applic<strong>at</strong>ion<br />

procedure by issuing a huge number of loc<strong>at</strong>ions for permit and subsidy, as these loc<strong>at</strong>ions<br />

are already specified. The loc<strong>at</strong>ion study will also include an initi<strong>at</strong>ive to link a permit and<br />

SDE scheme to the specific loc<strong>at</strong>ion, this will allow for developers to know beforehand<br />

approxim<strong>at</strong>ely how much subsidy they can receive.<br />

However, cre<strong>at</strong>ing this policy will mean th<strong>at</strong> the laws for the Dutch Exclusive Economic Zone<br />

(EEZ) will have to be changed, since in the current law, no priv<strong>at</strong>e actor can reserve any part<br />

of the EEZ for exclusive economic rights. Amending the Dutch laws will take approxim<strong>at</strong>ely<br />

1,5 years to complete before this policy can be active, so end of 2011. Next to amending the<br />

law, a recent report has been issued th<strong>at</strong> specifies the costs for upd<strong>at</strong>ing the electricity<br />

infrastructure and connect offshore wind parks to the grid. The costs are expected to be<br />

between 5 and 11 billion Euro 26 . The wind park developers are looking <strong>at</strong> costs of 1,4 billion<br />

Euro’s in all scenario’s, and the costs for the electricity grid connection varies substantially,<br />

from 3,2 billion Euro in case of clustered loc<strong>at</strong>ion close to shore, to more then 10 billion Euro<br />

in case of offshore parks far away from the shore, using a more ad<strong>van</strong>ced technology to<br />

make the connection (Eindrapport Net op Zee, Ministerie <strong>van</strong> EZ, pag. 16).<br />

To put this in perspective, the most likely scenario of <strong>6000</strong> MW being realized in 2020 will<br />

mean an increase of energy costs for every household of 25 Euro each year for a dur<strong>at</strong>ion of<br />

20 years. These are enormous amounts th<strong>at</strong> will also asks a considerable financial sacrifice<br />

of the energy consumers (ibid. p. 31). The minister is studying the report and will react on the<br />

findings <strong>at</strong> the end of 2009, irrespective of her conclusion, the amount are enormous and, if<br />

added to the cost and benefit analysis described in Chapter 2 on the <strong>6000</strong> MW goal gre<strong>at</strong>ly<br />

increase the costs of large scale offshore wind.<br />

26 Hoofdrapport Net op Zee – Ministerie <strong>van</strong> Economische Zaken -<br />

http://www.ez.nl/dsresource?objectid=164677&type=PDF (accessed on 22-06-2009)<br />

67


The adapt<strong>at</strong>ions th<strong>at</strong> are proposed to the current procedures do look promising and take<br />

away considerable critique by market actors and research institutes. So far, no action has<br />

been undertaken on coalition building with the other stakeholders to further include them in<br />

the policy making process. The commission Veenman th<strong>at</strong> has been given the task to<br />

investig<strong>at</strong>e the possibility for a coalition between market and government and how this has to<br />

be set up will look into the complaints on lack of pull and lack of transparency by the<br />

government on including the market in policy and legisl<strong>at</strong>ure development. Surprisingly, I<br />

have found in my interviews th<strong>at</strong> both the government and market actors do feel th<strong>at</strong> the<br />

government and the market have developed into a much more cooper<strong>at</strong>ive rel<strong>at</strong>ion and th<strong>at</strong><br />

although no official body has been erected, cooper<strong>at</strong>ion and commitment of both government<br />

and market has been gre<strong>at</strong>ly improved: the leadership, commitment and transparency issues<br />

have diminished gre<strong>at</strong>ly since the critical reports on the current 2010 procedures. The<br />

government has actively engaged the market and this effort has certainly had fruitful results<br />

in the shared goals of government and market.<br />

These findings support the MSP values, the new policy development has succeeded in<br />

cre<strong>at</strong>ing more commitment and trust and has been able to include credible partners. The<br />

critiques of these partners has been taken into account for the future procedures and much<br />

improvement has been made to work on joint development. There are however, a number of<br />

crucial obstacles for the <strong>6000</strong> MW in 2020 goal, part of which lie outside of the policy arena,<br />

which I will elabor<strong>at</strong>e on in the next chapter, but part of the obstacles can be contributed to a<br />

remaining lack of transparency and leadership.<br />

We have already determined th<strong>at</strong> large interest of the market exists for offshore wind and the<br />

large scale development of offshore parks. The government has to cre<strong>at</strong>e the right conditions<br />

and prospects for these actors to actively develop the potential for offshore wind. However,<br />

this is where market actors are facing obstacles. The goal of <strong>6000</strong> MW by 2020 is clear, but,<br />

as recent developments again show, development of these kind of scale require very high<br />

costs th<strong>at</strong> will be faced by the society as a whole, a territory where the government has to<br />

cre<strong>at</strong>e clarity, market actors are missing a strong vision here. The goals are clear for the next<br />

round, but the government has so far not been able to provide a valu<strong>at</strong>ion of the feasibility of<br />

these goals. <strong>6000</strong> MW by 2020 might be overly optimistic, there is no plan for wh<strong>at</strong> will<br />

happen in the worst case scenario’s. Wh<strong>at</strong> will be the outlook when costs rise (like the recent<br />

report on the grid connection)? There is no realistic and strong vision on the risks associ<strong>at</strong>ed<br />

with these large scale developments and the commitment of the government to continue the<br />

development of offshore wind even if these excess costs will have to be faced.<br />

68


Until there is no realistic plan or altern<strong>at</strong>ive scenario’s, investors and developers will not take<br />

the initi<strong>at</strong>ive as the risk of these investments are way to high. For such a complex process as<br />

offshore wind, a more comprehensive and balanced approach is needed to effectively move<br />

towards large scale development, the <strong>6000</strong> MW goal is important to uphold, but 2020 is<br />

proving to be a very short time span to increase to such a scale with the risks th<strong>at</strong> exist in<br />

offshore wind today. The current situ<strong>at</strong>ion is one of “more haste, less speed” and does not<br />

comply with the care and <strong>at</strong>tention th<strong>at</strong> should be upheld in severe processes as large scale<br />

offshore wind.<br />

3.5 - Conclusions<br />

In this part of my thesis I have analyzed the Schoon & Zuinig program th<strong>at</strong> has been set up<br />

by the Dutch government to adhere to the 2020 goals for offshore wind energy. The program<br />

uses five policy instruments; market incentives, norms, instruments for innov<strong>at</strong>ion, temporary<br />

stimulus and intern<strong>at</strong>ional clim<strong>at</strong>e diplomacy. All five instruments are rele<strong>van</strong>t to this thesis,<br />

but the most notable instrument is the temporary stimulus instrument as offshore wind<br />

energy is not yet cost-effective and investment and development of offshore wind parks need<br />

temporary stimulus for their future success.<br />

I have looked <strong>at</strong> the instruments the government has erected especially for offshore wind<br />

energy, the SDE subsidy and the accompanying Wbr permit and possible EIA contribution,<br />

as well as the implement<strong>at</strong>ion of these instruments. Also, Multi Stakeholder Theory is<br />

introduced, and the most important stakeholders for this research have been identified. The<br />

respective positions of the stakeholders with regard to the current permit and policy<br />

procedures have been mapped and compared to get a clear picture of the problems of the<br />

current policy th<strong>at</strong> the selected stakeholders have identified and th<strong>at</strong> withhold an effective<br />

development of offshore wind parks.<br />

If we look <strong>at</strong> the comments on the policy, we can see th<strong>at</strong> a large part of these arise from<br />

unclear procedures and expect<strong>at</strong>ions, policy inefficiency, lack of trust and uncertainty th<strong>at</strong> are<br />

experienced by the market actors, which are also found in government public<strong>at</strong>ions. These<br />

problems are directly rel<strong>at</strong>ed to the lack of collabor<strong>at</strong>ion and effective leadership by the<br />

government in the first round of wind parks with a 950 MW capacity. As we can conclude<br />

from the policy analysis, the problems th<strong>at</strong> exist and the lack of a improvement in the recent<br />

period, show th<strong>at</strong> the MST values are explicitly suited to resolve these frustr<strong>at</strong>ions with the<br />

current results.<br />

69


Large part of the current problems can be resolved if market actors and other stakeholders<br />

are better included in the form<strong>at</strong>ion of policy and the problems th<strong>at</strong> are faced in the<br />

development of wind parks. The analysis and recent developments have also unveiled major<br />

thre<strong>at</strong>s to the feasibility of the <strong>6000</strong> MW goal, as the grid connection is very expensive and<br />

laws have to be changed to be able to move towards better procedures, which has a 1,5 year<br />

minimum dur<strong>at</strong>ion th<strong>at</strong> increases uncertainty. The intensity of the investments and initi<strong>at</strong>ives<br />

to be able to guarantee <strong>6000</strong>MW by 2020 is overwhelming.<br />

With a lack of clear process leadership, and no apparent clear, realistic and effective<br />

approach to the large scale development of offshore wind, the government can seriously<br />

hamper the fulfillment of the specified goals.<br />

In the Chapter 4, I will further analyze which inducement and blocking mechanisms exist in<br />

the development of offshore wind parks in the Netherlands, and I will indentify the key policy<br />

issues th<strong>at</strong> need to be faced in order to be able to achieve an offshore capacity of <strong>6000</strong> MW<br />

by 2020.<br />

70


Chapter 4 Technological Innov<strong>at</strong>ion System for Offshore <strong>Wind</strong> Energy Policy<br />

Introduction<br />

In the previous chapters I have elabor<strong>at</strong>ed on the position wind energy has in the current<br />

energy market and the potential offshore wind energy has in contributing to a sustainable<br />

energy supply for the Netherlands. The current oper<strong>at</strong>ional parks and the planned projects<br />

were described and an overview of the current policies and legisl<strong>at</strong>ion around offshore wind<br />

parks was provided. Various stakeholders and their respective positions towards these<br />

policies and legisl<strong>at</strong>ion were introduced and their problems were identified.<br />

In this chapter, I will further analyze the policy for offshore wind energy as well as the<br />

desirability of the <strong>6000</strong> MW in 2020 goals by using the TIS approach. TIS allows me to<br />

identify wh<strong>at</strong> factors contribute to - and wh<strong>at</strong> factors block the forming of the desired policy<br />

wanted by the stakeholders and government.<br />

4.1 Technological Innov<strong>at</strong>ion System – Offshore wind policy in the Netherlands<br />

The TIS approach presents a scheme of analysis which provides a practical framework to<br />

assess system performance and the identific<strong>at</strong>ion of factors influencing this performance.<br />

The TIS approach allows me to include additional inform<strong>at</strong>ion and input obtained in<br />

interviews and liter<strong>at</strong>ure study to include the most recent rele<strong>van</strong>t inform<strong>at</strong>ion and forge a<br />

policy advice on the future policy for offshore wind parks.<br />

Figure 4.1 – TIS Scheme<br />

Source: Bergek et al (2008) - Analyzing the functional dynamics of technological innov<strong>at</strong>ion systems: A scheme of<br />

analysis, Research Policy 37. pp. 407-429<br />

71


Step 1: Define TIS in focus<br />

The first step is the oper<strong>at</strong>ionaliz<strong>at</strong>ion of the TIS in focus, in this case offshore wind energy<br />

policy, with specific focus on the Netherlands. I will focus on a knowledge field (as opposed<br />

to a product/artifact) of the policy and the policy improvements. Policy is of grave importance<br />

<strong>at</strong> this stage of the development. We have seen th<strong>at</strong> the first round of 950 MW has been<br />

nearly completed, but the permits, legisl<strong>at</strong>ion and procedures were unfit, inefficient and<br />

unclear for the 950 MW capacity, they will have to be changed dram<strong>at</strong>ically in order to be<br />

able to guide the process of moving towards <strong>6000</strong> MW of capacity in 2020.<br />

Offshore wind energy is an industry th<strong>at</strong> is in it’s infancy, large uncertainties still exist in<br />

technologies of turbines, found<strong>at</strong>ions, suppliers of parts, maintenance, connection to the<br />

electricity grid, cost-effectiveness, etc. Although these factors are also of grave importance<br />

to the success of offshore wind in the Netherlands, my approach will be on policies and<br />

legisl<strong>at</strong>ure, th<strong>at</strong> will need to cre<strong>at</strong>e the right conditions for the development of the entire<br />

industry. Getting this process optimal for economies to develop is a crucial first step to be<br />

able to increase the scale and move towards the 2020 goal and the main goal of this<br />

research.<br />

Step 2: Identifying the structural components of the TIS<br />

The structural components of the TIS for offshore wind energy policy in the Netherlands have<br />

already been introduced in Chapter 3, where I have used a MST approach and identified the<br />

actors th<strong>at</strong> are already active in the field. I have included them in a figure below. In the table<br />

3.2 I have listed a number of actors, networks and institutions th<strong>at</strong> are involved directly or<br />

indirect by public<strong>at</strong>ions, research or reports rele<strong>van</strong>t to my subject. Most of the actors have<br />

already been introduced in the research and are not posted to be exhaustive, I merely wish<br />

to point out the width of the industry and the variety of actors th<strong>at</strong> have been included directly<br />

or indirectly in this research, government, market and independent research institutes make<br />

up the actors, networks and institutions included in the TIS and this research.<br />

72


Figure 4.2 – Stakeholders in offshore wind energy policy<br />

Table 4.1 – Actors, Networks & Institutions in the TIS<br />

Actors Networks Institutions<br />

Airtricity Energie Transitie Ministerie <strong>van</strong> EZ<br />

Econcern Kafka Brigade Ministerie <strong>van</strong> V&W<br />

Eneco NWEA Rijksw<strong>at</strong>ersta<strong>at</strong><br />

Nuon TOW TU Delft<br />

Shell We@<strong>Sea</strong> ECN<br />

Senternovem<br />

Stichting N<strong>at</strong>uur & Milieu<br />

Government Market<br />

Senternovem<br />

TOW<br />

Ministeries<br />

Noordzeewind<br />

Step 3: Mapping the functional p<strong>at</strong>tern of the TIS<br />

The next step of the TIS approach I is to determine the functional p<strong>at</strong>tern of the TIS and<br />

ascertaining to wh<strong>at</strong> extent the functions are filled in and determine how the TIS is<br />

performing according to some key processes. For the performance of offshore wind energy<br />

policy, we will determine how we define performance and wh<strong>at</strong> the outcome is for these<br />

policies. In the following section I will explain the processes and their role in assessing the<br />

functional p<strong>at</strong>tern of offshore wind energy policy.<br />

N<strong>at</strong>uur&Milieu<br />

/Kafka<br />

NWEA<br />

Prinses Amalia<br />

73


1- Knowledge development & Diffusion<br />

Knowledge development and diffusion is <strong>at</strong> the heart of the TIS, this function deals with the<br />

knowledge base and the evolution of the knowledge. This TIS is specifically focused on<br />

policy, therefore knowledge development and diffusion is specially geared towards the<br />

cre<strong>at</strong>ion of policy, the evolution of policy and the diffusion of both policy cre<strong>at</strong>ion and<br />

evalu<strong>at</strong>ion.<br />

Although a large number of parties are directly affected by policy, only the government<br />

agencies are involved in policy cre<strong>at</strong>ion, with few parties (ECN, Senternovem) th<strong>at</strong> influence<br />

policy indirectly. The market actors, mentioned above, th<strong>at</strong> deal with the policy and rely on<br />

good policy and the accompanying subsidy are not included in the policy negoti<strong>at</strong>ions and<br />

forming <strong>at</strong> all. The only communic<strong>at</strong>ion th<strong>at</strong> occurs is ex post, limiting flexibility and ability of<br />

market actors to engage the government in the forming of the policy.<br />

Government has in the past been ill-communic<strong>at</strong>ive and unclear until the final policies are<br />

already formed and procedures are in a well developed stadium 27 .<br />

Knowledge development is very high, as a gre<strong>at</strong> deal of scientific research is done in<br />

offshore wind energy and policy surrounding this. In the previous chapter, a detailed<br />

overview of the policies involved is given. The development of the policies and procedures is<br />

being studied by all the stakeholders described there.<br />

There are also a gre<strong>at</strong> number of studies within the Dutch government, several ministries are<br />

closely involved in this, examples are the Ministery of Defence (loc<strong>at</strong>ion of windparks),<br />

Ministry of Rijksw<strong>at</strong>ersta<strong>at</strong> (North <strong>Sea</strong> planning), Ministry of Economic Affairs (SDE), Ministry<br />

of VROM (Developer of Schoon en Zuinig). All these ministries have their own policy<br />

developers as well as specialized research institutes like ECN to aid in developing policy.<br />

Market knowledge has been limited, due to the fact th<strong>at</strong> offshore wind parks are a rel<strong>at</strong>ively<br />

new phenomenon. However, in the Egmond aan Zee Nearshore park a research program is<br />

closely monitoring the development of the park and the procedures surrounding this. This<br />

research program is a joint effort of park owners Shell and Nuon and the government.<br />

Although much is unclear for parks th<strong>at</strong> are further out the coastline, policies and permit<br />

procedures are being developed to c<strong>at</strong>er to the needs of all rele<strong>van</strong>t actors.<br />

One of the problems with this TIS is knowledge diffusion, as we have seen from the policy<br />

analysis and problems associ<strong>at</strong>ed with this in the previous chapter, the government has not<br />

been able to include the other stakeholders in the process to a s<strong>at</strong>isfactory level in the<br />

current procedures.. Most stakeholders st<strong>at</strong>e th<strong>at</strong> they lack communic<strong>at</strong>ion, direction and<br />

inform<strong>at</strong>ion from the government. Policies were unclear, procedures are slowed down and<br />

27 NWEA – reactie Conceptadvies basisbedragen duurzame elektricteitsproductie 2008-2009, 21-11-2007<br />

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uns<strong>at</strong>isfactory. However, the new round of policy th<strong>at</strong> is now being developed shows<br />

improvement on these aspects as a much better cooper<strong>at</strong>ion is cre<strong>at</strong>ed with market actors<br />

and government, but much improvement is needed to expand this further and transl<strong>at</strong>e it into<br />

successful policy.<br />

2- Influence on direction of search<br />

The direction of search function within the TIS posits th<strong>at</strong>, for a TIS to develop new firms and<br />

organiz<strong>at</strong>ions have to enter it. There must be incentives for firms and organiz<strong>at</strong>ions to do so.<br />

New entrants offer new insights, new interests and different views to wind energy policy and<br />

wh<strong>at</strong> the policy needs to include in order to be successful.<br />

Inclusion of new entrants in the TIS for policy cre<strong>at</strong>ion in offshore wind parks is problem<strong>at</strong>ic<br />

for a number of reasons. First of all, wind parks will have effects on a gre<strong>at</strong> deal of factors,<br />

many of which have not been studied yet (f.e safety on sea, effects on n<strong>at</strong>ure, effects on<br />

wildlife, competition with oil and gas fields in the North <strong>Sea</strong>, shipping lanes, energy grid<br />

connection,) all of which need to be taken into account in policy. Of these consider<strong>at</strong>ions,<br />

some will be confidential, which limits the potential for cooper<strong>at</strong>ion.<br />

More entrants in the policy making process will slow this down, and market actors need to be<br />

credible as partner, market actors being represented by an associ<strong>at</strong>ion as NWEA is<br />

preferred. This limits internal competition and ensures a broad focus. In terms of the<br />

development of the TIS, inclusion of market actors is vital for the development of effective<br />

policy, in line with MST principles, cooper<strong>at</strong>ion yields efficiency, ownership and commitment.<br />

Market actors and policy makers will have to engage in close cooper<strong>at</strong>ion in order to develop<br />

better policy, th<strong>at</strong> also suits the needs of the market actors th<strong>at</strong> rely on government stimulus<br />

and policy to develop offshore wind parks. We have seen th<strong>at</strong> this has improved in the last<br />

months during the forming of new policy for the next round starting <strong>at</strong> 2012, th<strong>at</strong> must lead to<br />

<strong>6000</strong>MW. The government has formalized their <strong>at</strong>tention to a strong coalition by erecting the<br />

taskforce <strong>Wind</strong>energy on sea lead by Mr. Veenman th<strong>at</strong> will investig<strong>at</strong>e how the 2020 goals<br />

can be met and how to optimize the role of the market. 28<br />

28 Ministry of Economic Affairs – 19-05-2009- Taskforce <strong>Wind</strong>energie op zee -<br />

http://www.ez.nl/Actueel/Pers_en_nieuwsberichten/Persberichten_2009/Mei_2009/Taskforce_windenergie_op_zee<br />

(accessed on 21-05-2009)<br />

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3 – Entrepreneurial Experiment<strong>at</strong>ion<br />

The entrepreneurial experiment<strong>at</strong>ion step has to do with the ability for experiment<strong>at</strong>ion th<strong>at</strong> is<br />

allowed due to efficient policies in the development of offshore wind energy, since nobody<br />

really has any experience with offshore wind energy on such a large scale, this step is<br />

important to perform but also very abstract. Innov<strong>at</strong>ion and learning are key processes th<strong>at</strong><br />

need to be fostered by government stimuli like the EIA, the focus on innov<strong>at</strong>ion in SDE and<br />

permit procedures and the effects this has on new technologies and it’s applic<strong>at</strong>ions in<br />

offshore wind.<br />

Areas where innov<strong>at</strong>ion is key for large scale implement<strong>at</strong>ion include found<strong>at</strong>ions In deeper<br />

seas, maintenance oper<strong>at</strong>ions th<strong>at</strong> need to be improved to be able to suffice for larger<br />

turbines th<strong>at</strong> are further out to sea. Port capacity needs to be expanded dram<strong>at</strong>ically, even a<br />

port <strong>at</strong> sea is under investig<strong>at</strong>ion, and fabric<strong>at</strong>ors of turbines need to design larger machines<br />

to place them in open seas. The new offshore parks will also have to comply to EU rules and<br />

regul<strong>at</strong>ions and large offshore parks will have to take into account the plans for a possible<br />

EU supergrid to connect UK, Denmark and Dutch initi<strong>at</strong>ives into one looped system, this is<br />

still far away but it is an example of the importance offshore wind has for the Netherlands<br />

and Europe.<br />

The large scale development for 2020 has cre<strong>at</strong>ed enormous demand on turbine<br />

manufacturers th<strong>at</strong> will supply large, reliable turbines. Now, there are only a small number of<br />

firms th<strong>at</strong> can supply these, Vestas, Siemens, General Electric and Enercon, governments<br />

should also take into account any monopolies th<strong>at</strong> may arise by the focus on large scale<br />

projects th<strong>at</strong> will need proven models, limiting competition to only the renowned suppliers,<br />

th<strong>at</strong> might also limit experiment<strong>at</strong>ion and diversific<strong>at</strong>ion th<strong>at</strong> is needed to develop a vibrant<br />

industry.<br />

4 - Market form<strong>at</strong>ion<br />

Offshore wind is still in a very early stage of development in the Netherlands, only two parks<br />

are active today, of which one has an experimental st<strong>at</strong>us (OWE). Offshore wind is not yet<br />

cost-effective, the CPB has calcul<strong>at</strong>ed th<strong>at</strong>, in the optimal situ<strong>at</strong>ion, offshore wind energy will<br />

be cost-effective in 2025, without accounting for the grid connection costs. However,<br />

reaching cost-effectiveness depends on a large number of factors th<strong>at</strong> are outside the control<br />

of the Dutch government. The EU ETS system needs to be fully oper<strong>at</strong>ional with a clear<br />

development of CO2 emission costs, the oil price will have to be rel<strong>at</strong>ively high as this will<br />

urge actors to increase interest into renewable, interest r<strong>at</strong>es and infl<strong>at</strong>ion will have to be low<br />

to have a reliable investment clim<strong>at</strong>e.<br />

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Other uncertainties include the grid connection for offshore wind, loc<strong>at</strong>ions for windparks in<br />

the North <strong>Sea</strong> resulting from the NWP and the results of the ECN/KEMA study into budget<br />

requirements for <strong>6000</strong> MW capacity cre<strong>at</strong>ion (how much MW can we realize for wh<strong>at</strong><br />

amount?) , costs for maintenance and oper<strong>at</strong>ion of offshore wind parks in deeper w<strong>at</strong>ers.<br />

The market for offshore wind parks is still in a learning phase, also with regard to policy<br />

development. The market actors rely on government support and policy form<strong>at</strong>ion to be able<br />

to invest in the joint goal of sustainable offshore wind parks, and expect efficient and<br />

effective policies and procedures. Untill now, the government has not been able to deliver on<br />

these aspects as tension and criticism is mounting out of the market on the current<br />

procedures.<br />

The interest from market parties is still very high, judging by the enormous amount of interest<br />

in the tenders for offshore wind parks, and the multitude of actors engaged in the permit<br />

procedures, recent developments show improvement on the critiques..<br />

Both oper<strong>at</strong>ors of the current oper<strong>at</strong>ional parks have recently been in the news. Shell,<br />

partner in Noordzeewind with Nuon, and oper<strong>at</strong>or of the OWE park has st<strong>at</strong>ed th<strong>at</strong> they will<br />

stop all further investment into wind energy. Shell clarified to have a lack of trust in the<br />

profitability of wind energy and will delay investment until wind energy has a more promising<br />

outlook 29 , in my interview, the director of offshore wind oper<strong>at</strong>ions st<strong>at</strong>ed th<strong>at</strong> this is a<br />

str<strong>at</strong>egic decision of Shell th<strong>at</strong> is not directly resulting from the situ<strong>at</strong>ion in the Netherlands.<br />

The decision to quit further investment was also effected by competition with other forms of<br />

CO2 reduction, like CO2 storage and Biomass/Biofuels. Shell is looking for scale and the<br />

other techniques are more interesting globally <strong>at</strong> this moment.<br />

The oper<strong>at</strong>or of the Prinses Amalia Park, Econcern, has recently filed for bankruptcy, and<br />

have received a temporary credit from the government because of their position. Econcern<br />

plays a vital role in the <strong>at</strong>tainment of the Schoon en Zuinig goals. At this moment, Eneco, the<br />

other partner in the Amalia windpark is looking for a partner to take over Econcern 30 .<br />

Although offshore wind energy has a high profile, and both government and market actors<br />

are involved and show high commitment to the development of more offshore capacity, there<br />

still exists a lot of uncertainty in the market form<strong>at</strong>ion process of this form of energy.<br />

Next to policy problems th<strong>at</strong> have been analyzed in the previous chapter, the main market<br />

actors in the current parks are pulling out of the market. However, both the government and<br />

market actors do not see a thre<strong>at</strong> to the <strong>6000</strong> MW goals, as they feel th<strong>at</strong> the interest is<br />

widespread and a large number of other actors remain. A vital, healthy market sees changes<br />

and mergers and acquisition on a regular basis.<br />

29 Shell “worstelt” met winsten windenergie en stopt ermee – Volkskrant, 17-06-2009<br />

30 Essent en Eneco azen op Econcern – Financieel Dagblad, 23 mei 2009<br />

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5- Legitim<strong>at</strong>ion<br />

Mapping legitim<strong>at</strong>ion includes analyzing the legitimacy of the TIS in the eyes of the<br />

stakeholders and the activities th<strong>at</strong> may increase legitimacy. We can conclude th<strong>at</strong> the TIS<br />

th<strong>at</strong> is analyzed here, specified on offshore wind energy policy, enjoys a very high profile.<br />

Government has presented ambitious plans for offshore wind energy, in line with goals th<strong>at</strong><br />

have been formul<strong>at</strong>ed on the European level, the 2020 goals.<br />

The specific goals for wind energy (<strong>6000</strong> MW by 2020) have been formul<strong>at</strong>ed and the<br />

government and the energy market have committed to these goals.<br />

However, we have seen form the comments on the policy surrounding offshore wind energy<br />

th<strong>at</strong> the alignment between policy and the market needs leaves a lot to be desired. The<br />

problems th<strong>at</strong> have been encountered in the past procedures have lead to strong opposition<br />

of the market actors, with two of the main stakeholders pulling out of wind energy altogether.<br />

As we have already seen in the “direction of search” function, the government has a leading<br />

role in cre<strong>at</strong>ing the right conditions for offshore wind energy to develop. SO far, the results<br />

have been met (950 MW in 2010), but serious comments on the procedures and the<br />

realiz<strong>at</strong>ion of parks for <strong>at</strong>taining <strong>6000</strong> MW in 2020 have been raised. Until now, a lot of the<br />

comments have not been resolved, leading to further lock in and uncertainty for the<br />

stakeholders.<br />

The government should open up communic<strong>at</strong>ion and integr<strong>at</strong>e the market stakeholders in the<br />

form<strong>at</strong>ion of policy to increase legitimacy, this has been acted upon, and for the next policy<br />

cre<strong>at</strong>ion actors are more positive, but the government still needs to fulfill their promises in the<br />

next months and deliver on them.<br />

6– Resource mobiliz<strong>at</strong>ion<br />

Any TIS needs to mobilize and commit a number of resources, forms of capital and assets to<br />

keep a TIS developing and innov<strong>at</strong>ing and add to a high profile th<strong>at</strong> makes any TIS<br />

successful. This is not different for offshore wind energy, in the following part we will look into<br />

human capital, financial capital and complementary assets with regard to moving to <strong>6000</strong><br />

MW in 2020.<br />

Mobiliz<strong>at</strong>ion of human capital in the TIS for offshore wind energy policy has been<br />

considerable and will not be a limiting factor for the development of the TIS, it can be<br />

problem<strong>at</strong>ic as the high profile offshore wind energy puts enormous strain on the government<br />

departments. The high profile of offshore wind drains resources and takes government<br />

officials away from policy cre<strong>at</strong>ion to dialogue, media enquiries and research projects.<br />

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Although this interest is important to further develop the offshore wind policy, this does strain<br />

the governments departments.<br />

Next to the departments, the government has also issued a large number of research<br />

groups, and taskforces to further study the future prospects of offshore wind and policy<br />

implic<strong>at</strong>ions as well as consulting market actors for critiques and input. Especially for the new<br />

rounds the government has improved coalition forming with the market.<br />

Mobiliz<strong>at</strong>ion of financial capital is much more troublesome, as large uncertainties exist on just<br />

how much budget the government is willing to commit to offshore wind. As described before,<br />

the costs of <strong>6000</strong> MW in 2020 are expected to be astronomically high, ranging from 8 billlion<br />

to 16 billion Euro, with an increase in energy prices expected <strong>at</strong> minimum 25 Euro per<br />

household per year for the next 20 years. Although the government has st<strong>at</strong>ed to fully comply<br />

to the st<strong>at</strong>ed goals, these recent developments increase the budget dram<strong>at</strong>ically while<br />

possible delays in procedures further heighten the risk for <strong>at</strong>taining the 2020 goal.<br />

The current economic crisis has also made banks very cautious for lending money out to<br />

long-term, high risk projects like offshore wind parks. Financing problems already led to the<br />

bankruptcy of E-concern, this hampers developers with a rel<strong>at</strong>ively small budget th<strong>at</strong> will<br />

need outside capital for developing the large parks required for making <strong>6000</strong> MW.<br />

On top of this, the Dutch government and Shell also pointed out in the interviews th<strong>at</strong> the<br />

goals for 2020 also put a strain on suppliers of parts and technologies for the wind parks.<br />

7- Development of positive externalities<br />

The development of positive externalities is determined for a gre<strong>at</strong> deal by new entrants, th<strong>at</strong><br />

can strengthen a TIS and improve benefits of further developing a TIS for all members. The<br />

functional profile described above derives it’s strength from the ability to resolve<br />

uncertainties, improve political power and increase inform<strong>at</strong>ion, learning and innov<strong>at</strong>ion<br />

processes.<br />

We have seen th<strong>at</strong> the TIS for offshore wind energy policy is improving on knowledge<br />

diffusion, the government has improved on joint development and coalition building.<br />

The need for monitoring and evalu<strong>at</strong>ion is shared by all parties, but it has to be seen in wh<strong>at</strong><br />

way market actors allow possible competitive inform<strong>at</strong>ion to be included and widely shared.<br />

However, the government has put out numerous researches and cre<strong>at</strong>ed a dialogue with all<br />

rele<strong>van</strong>t actors in the market and in research institutions to allow learning and advice to<br />

shape the discussion and the forming of new policy, efforts are also made to include the<br />

market as much as possible for the 2020 goal.<br />

Innov<strong>at</strong>ion is a key process th<strong>at</strong> the policy should foster, however, there also lies a huge<br />

challenge as much of the needed innov<strong>at</strong>ions are new, unknown and the goals do put<br />

79


considerable strain on the pace of development. Furthermore, much of the needed<br />

developments lie outside of the direct scope of the TIS and also require immense<br />

investments and budgetary commitments of all the actors but especially the government as<br />

leader of the TIS, responsible for policy to cre<strong>at</strong>e a growing industry. There is still no clarity<br />

on just how committed the government is with the looming costs developments of the last<br />

weeks.<br />

It is the intensity of investment th<strong>at</strong> makes the resource mobiliz<strong>at</strong>ion troublesome, the<br />

enormous amounts coupled to substantial unknowns and an economic crisis present hurdles<br />

th<strong>at</strong> will cost effort to decide on while the deadlines are short. Further procedural changes<br />

th<strong>at</strong> need to be crafted to cre<strong>at</strong>e succesfull policy also present challenges to the 2020 goal.<br />

Step 4: Asses the functionality of the TIS and set process goals<br />

In the fourth step, we will look into how well the TIS is performing. Comparing offshore wind<br />

policy development to other, similar processes and taking into account the phase of<br />

development of the TIS, I will try to infer how the offshore wind energy policy is performing<br />

and if this policy is suitable to be able to facilit<strong>at</strong>e the move towards <strong>6000</strong> MW in 2020.<br />

The process goals for offshore wind energy have already been clarified in the 2020 goal of<br />

<strong>6000</strong> MW. The government must cre<strong>at</strong>e policy th<strong>at</strong> allows market actors to develop large<br />

scale offshore wind parks with a combined capacity of <strong>6000</strong> MW.<br />

Offshore wind energy as a large scale industry is still very much in it’s infancy, and policy th<strong>at</strong><br />

will effectively stimul<strong>at</strong>e its development is also untried and untested as the technology and<br />

the industry is still new and under development, this makes policy cre<strong>at</strong>ion to c<strong>at</strong>er to the<br />

needs of all the stakeholders an enormous challenge. We have seen from the current<br />

development of 950 MW th<strong>at</strong> policy was facing a lot of critique because of it’s inefficiency,<br />

lack of transparency and procedural delays.<br />

Offshore wind energy is a new industry th<strong>at</strong> is still in development and large uncertainties<br />

exist in the exploit<strong>at</strong>ion of the to-be-developed parks. Large offshore capacity needs<br />

innov<strong>at</strong>ion in found<strong>at</strong>ion technology for turbines, as stronger found<strong>at</strong>ions are needed for<br />

deep sea loc<strong>at</strong>ions. Turbines are still developing and growing, needing stronger found<strong>at</strong>ion<br />

and maintenance. In order to be able to maintain the parks, new port capacity must be<br />

developed and large infrastructure must be erected <strong>at</strong> sea in order to facilit<strong>at</strong>e electricity<br />

delivery to land. The electricity infrastructure needs to be upd<strong>at</strong>ed and expanded in order to<br />

cope with the increased load. The economic crisis has made financing options more difficult.<br />

The large coalitions between banks needed to source the necessary development funds from<br />

80


are more difficult to complete as banks are more risk averse and less likely to loan the huge<br />

sums of money needed. Another uncertainty is cost-effectiveness of offshore wind parks.<br />

Park developers will only invest in offshore parks if their investment will be covered in a<br />

reasonable term by the commercial exploit<strong>at</strong>ion of the wind park. However, cost-<br />

effectiveness is dependent on the development of the EU ETS, as the premium on CO2<br />

emmissions will initi<strong>at</strong>e a market for emmissions. CO2 emmissions will be very costly as the<br />

emitter will be liable to a premium on every gram emmitted. The higher this premium will be,<br />

the more offshore wind parks are an interesting option as these parks are emmission free.<br />

The CO2 price is however largely dependent on the development succes of the EU ETS, so<br />

far, no definite CO2 price has been agreed upon, leaving much unclear for the near future.<br />

Much of the risks th<strong>at</strong> offshore wind energy faces in its development can not be influenced by<br />

government itself, with recent examples in the economic crisis. The reaction to the crisis was<br />

an increase in budget and capacity goals from 450 MW to 950 MW by 2010 adding to fast<br />

paced further development and growth.<br />

The government, with its open enthusiasm is running the risk of overpacing the<br />

developments, the high expect<strong>at</strong>ions for offshore wind need to be met with enthusiasm, but<br />

also with a coherent, thorough and relentless initi<strong>at</strong>ive in the quality of legisl<strong>at</strong>ure and<br />

procedures, market form<strong>at</strong>ion, fair competition and common objectives. An independent<br />

study in 2006 th<strong>at</strong> looked into the cost-effectiveness of offshore wind and its potential for the<br />

Netherlands concluded th<strong>at</strong> the <strong>6000</strong> MW goals for 2020 are very progressive and a slower<br />

phasing of the capacity growth is to be preferred. (CBP/ECN, Ma<strong>at</strong>schappelijke Kosten<br />

B<strong>at</strong>en Analyse, 2006, p.12). Slower development to <strong>6000</strong> MW will allow for more time to get<br />

a better grip on the risks mentioned above (predominantly the importance of the CO2<br />

emission price), and will allow for a more gradual innov<strong>at</strong>ion and legisl<strong>at</strong>ion development<br />

also closely connected to the developments of the fossil fuel market, since the price<br />

development of oil and gas does not render offshore wind cost effective in the near future. A<br />

more gradual development also lowers the losses and budget needed for government<br />

stimulus measures. A very important conclusion of the study was th<strong>at</strong> with all the uncertainty<br />

in offshore wind, this still is to be preferred over large scale biomass, the other renewable<br />

source for The Netherlands next to wind. This finding demonstr<strong>at</strong>es the importance of wind<br />

energy for the renewable energy development in the Netherlands. (Ibid. p.113)<br />

Costs of the <strong>6000</strong> MW goal by 2020 are enormous, in the most positive scenario, the costs<br />

for this goal are expected to be 3 billion Euro, while a more gradual approach of <strong>6000</strong> MW in<br />

2030 leading to a loss of 945 Million Euro. In the best case scenario, offshore wind will<br />

81


achieve cost-effectiveness <strong>at</strong> 2025. The key findings of the study are included in the<br />

Appendix X.<br />

It is important to note th<strong>at</strong> these findings d<strong>at</strong>e from 2006 and does not take into account the<br />

costs for the connection of the offshore wind parks with the on land electricity grid. Just<br />

recently the government decides th<strong>at</strong> the current grid oper<strong>at</strong>or, TenneT will have to develop<br />

the necessary adjustments. A recent report predicted the costs of this connection to be<br />

anywhere between 5 and 10 billion Euro, adding up a huge amount of costs to an already<br />

very expensive policy goal. In a best case scenario, the current goal of <strong>6000</strong> MW in 2020 will<br />

cost the st<strong>at</strong>e 8 billion Euro, an enormous investment th<strong>at</strong> needs appropri<strong>at</strong>e planning,<br />

procedures, legisl<strong>at</strong>ure and initi<strong>at</strong>ive of government and other stakeholders involved in its<br />

development.<br />

The Netherlands are not the only country with these high expect<strong>at</strong>ions for offshore wind<br />

energy, a large number of countries are working on the large scale applic<strong>at</strong>ion for this source<br />

of energy. The UK, Germany, Denmark and Belgium are countries with similar plans th<strong>at</strong> can<br />

be a direct competition to the Dutch initi<strong>at</strong>ives. The market actors th<strong>at</strong> want to develop<br />

offshore wind capacity are also looking to the development in other countries, and can<br />

reloc<strong>at</strong>e their efforts to the country which offers the best possible prospects regarding<br />

capacity and stimulus policy. Although some countries are moving ahead of the Netherands,<br />

these countries experience similar problems, limiting the influence of intergovernmental<br />

competition, nevertheless, any development hers should be carefully monitored by the Dutch<br />

government.<br />

Step 5: Identify Inducement and Blocking Mechanisms<br />

Now th<strong>at</strong> we have mapped the functional p<strong>at</strong>tern of the TIS and pointed out critical areas for<br />

improvement and development as well as the risks associ<strong>at</strong>ed with the plans, we can device<br />

the inducement and blocking mechanisms th<strong>at</strong> influence the policy process and thus the<br />

success of growth to <strong>6000</strong> MW capacity of offshore wind energy in 2020.<br />

Figure 4.3 illustr<strong>at</strong>es the most prolific inducement and blocking mechanisms and their<br />

interplay.<br />

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Figure 4.3 – TIS for offshore wind energy policy<br />

Adapted from: Bergek et al (2008) - Analyzing the functional dynamics of technological innov<strong>at</strong>ion systems: A<br />

scheme of analysis, Research Policy 37. pp. 422<br />

We can identify 4 main inducement mechanisms for this TIS. The high interest and profile<br />

th<strong>at</strong> offshore wind enjoys influences market form<strong>at</strong>ion due to wide interest of all sorts of<br />

stakeholders th<strong>at</strong> want to take part in large scale offshore wind and contribute to the policy<br />

process, directly and indirectly. The gre<strong>at</strong> number of researches and policy documents on<br />

offshore wind and the impact of large scale use of this form of energy has brought together<br />

all rele<strong>van</strong>t actors in the discussion, diversifying the inputs and leading to healthy push and<br />

pull factors for new policy procedures.<br />

Since the conception of offshore wind plans and the policies for the first round of currently<br />

950 MW to be developed by 2010, a lot of critique and comment have been formul<strong>at</strong>ed on<br />

the procedures surrounding the proposed development. The most consistent was the lack of<br />

cooper<strong>at</strong>ion and transparency of the government in the procedures. In this research I have<br />

found th<strong>at</strong> this has been considerably improved to a point where all stakeholders are<br />

consulted and included in the process of moving towards large scale development. The<br />

government has done well in amending critical weak points in their procedures and have<br />

delivered on much of the critiques of the market, th<strong>at</strong> leads to constructive focus on future<br />

development instead of the procedural mess of the current round. The government has taken<br />

83


an active approach th<strong>at</strong> is valued by market actors and cre<strong>at</strong>ed increased trust in<br />

cooper<strong>at</strong>ion.<br />

The 2020 targets and the Schoon & Zuinig program are clear in their targets, and offer good<br />

guidance to the role for offshore wind energy in the future energy supply for the Netherlands,<br />

accompanying subsidies and other stimulus tools are developed and expanded to aid a fast<br />

development and the inclusion of rele<strong>van</strong>t market actors. The efforts th<strong>at</strong> other countries are<br />

undertaking to pursue a similar large scale development of offshore wind parks further<br />

stimul<strong>at</strong>es a coherent development throughout Europe th<strong>at</strong> can benefit the Dutch effort as<br />

well as prove to be competition, but competition also forces governments to device efficient<br />

and effective policy and procedures th<strong>at</strong> will benefit all the stakeholders in terms of<br />

innov<strong>at</strong>ion, learning and the need for continuous improvement.<br />

There are also a number of important blocking mechanisms th<strong>at</strong> hamper development of<br />

good quality policy and procedures, first of all, the EU ETS and accompanying CO2 price is<br />

not oper<strong>at</strong>ional and the future success of this system is very unclear and hamper long term<br />

certainty for investors and developers, and credibility of the cost-effectiveness of offshore<br />

wind energy as a whole in the long term. The government can not control this process and<br />

can only wait for results on this important issue. Furthermore, there are still a lot of unknows<br />

for large scale offshore wind to be a reality th<strong>at</strong> may need extensive investments. These<br />

investments will, for a large part, have to be done by the government. The recent reports on<br />

the costs for grid connection, th<strong>at</strong> has not been accounted for earlier, add to the magnitude<br />

of the initi<strong>at</strong>ive and the government has not been clear on just how financially committed they<br />

are when faced with delays and budget increases. In this uncertainty, holding on to the <strong>6000</strong><br />

MW goals is also allowing less time for innov<strong>at</strong>ion and learning to take place in a n<strong>at</strong>ural<br />

development, th<strong>at</strong> strains the ability of suppliers and the supporting industries to be able to<br />

have sufficient time to cre<strong>at</strong>e solutions to the new challenges th<strong>at</strong> offshore energy faces<br />

them with<br />

The needed amendments to policy, legisl<strong>at</strong>ion and laws th<strong>at</strong> are set up to regul<strong>at</strong>e the Dutch<br />

energy initi<strong>at</strong>ives on the North <strong>Sea</strong> (i.e. the proposed amendment of the W<strong>at</strong>er wet) also<br />

increase risks for delays, further increasing pressure on the deadlines and capacity goals.<br />

These blocking mechanisms have a very strong influence on the success of the policy<br />

making process and the only way the government can try to take away uncertainty is to be<br />

more transparent on uncertainties, risks and impediments th<strong>at</strong> they are facing in their<br />

process of policymaking for offshore wind energy. Now, the <strong>6000</strong> MW goal is a fixed<br />

outcome th<strong>at</strong> has become a buzzword for the ambitions of the government. But market<br />

actors, investors, developers and energy companies need a realistic, honest and complete<br />

picture on the goals, but more importantly on wh<strong>at</strong> are the bumps in the road towards these<br />

goals. This has not been included in the deb<strong>at</strong>e in a s<strong>at</strong>isfactory manner and this may lead to<br />

84


a devalu<strong>at</strong>ion of the ambitious development plans of the government and loss of much<br />

needed initi<strong>at</strong>ive and commitment of the market actors. More transparency will inform market<br />

actors better and allow them to have a position where not ambitions are clear, but the<br />

discussion is lead by the reality of the current phase of large scale offshore wind energy as a<br />

solution to realizing a large share of renewable energy as well as a leading energy industry in<br />

the Netherlands.<br />

Step 6: Specify Key policy issues<br />

The analysis of the inducement and blocking mechanisms above has resulted in four distinct<br />

key policy issues th<strong>at</strong> need to be addressed in order to device successful policy for future<br />

large scale development of offshore wind energy in the Netherlands.<br />

- Optimize coalition and cooper<strong>at</strong>ion with market actors and research institutes<br />

and formalize their input in the policy cre<strong>at</strong>ion process.<br />

- Deliver on the planned improvements for the new policy and subsidy schemes<br />

- Communic<strong>at</strong>e a clear commitment to market actors and give a clear and<br />

realistic outlook on the feasibility of the 2020 goal of <strong>6000</strong> MW.<br />

- Cre<strong>at</strong>e and communic<strong>at</strong>e altern<strong>at</strong>e scenario’s and str<strong>at</strong>egies with reference to<br />

the 2020 goals<br />

Further improving coalition and cooper<strong>at</strong>ion initi<strong>at</strong>ives and formalizing them into procedures<br />

th<strong>at</strong> require market actors to particip<strong>at</strong>e can further improve commitment to effective, efficient<br />

clear and fair procedures. In order to start this, the planned improvements and amendments<br />

of the current legisl<strong>at</strong>ion should be implemented as soon as possible to allow <strong>at</strong>tention to<br />

move towards the fulfillment of the goals instead of the rules of the playing field. The<br />

government must quickly develop a stronger picture on the long term commitment and<br />

feasibility of <strong>6000</strong> MW. It is time to be able to openly question the desirability of these goals<br />

as the recent cost increases and daunting pace of development and innov<strong>at</strong>ion may put<br />

pressure on a proper prepar<strong>at</strong>ion towards large scale development of offshore wind.<br />

Inefficiencies <strong>at</strong> an early stage are easier to mend and a proper prepar<strong>at</strong>ion of such large<br />

scale projects is the key to success over the long term and give right to the daunting financial<br />

risks for the government as well as the market actors th<strong>at</strong> aim to be part of offshore wind<br />

energy as the renewable energy for the Netherlands.<br />

85


Conclusion:<br />

In this Chapter I have used the Technological Innov<strong>at</strong>ion Systems Theory to analyze the<br />

implic<strong>at</strong>ions and durability of the <strong>6000</strong>MW by 2020 goal th<strong>at</strong> has lead the development<br />

efforts for offshore wind energy in the Netherlands.<br />

A thorough analysis of the TIS for offshore wind energy policy has combined the findings of<br />

the earlier chapters with the structured approach of the TIS methodology and have enabled<br />

me to be able to identify the desired functions of policy th<strong>at</strong> should guide the development of<br />

offshore wind parks in the North <strong>Sea</strong> and determine how policy as effected this development<br />

and where key issues remain th<strong>at</strong> need to be resolved in order to increase the feasibility of<br />

offshore wind energy as a large energy contributor for the Dutch energy mix.<br />

I have been able to establish four key policy issues th<strong>at</strong> should be addressed, coalition and<br />

cooper<strong>at</strong>ion with market actors and research institutes although improved, should be<br />

formalized to value these inputs in the policy cre<strong>at</strong>ion process. The government must act on<br />

increasing trust and commitment by delivering on the planned improvements for policy and<br />

subsidy schemes to support the next round of large scale implement<strong>at</strong>ion.<br />

There is a lack of transparency and long term commitment by the government, more effort<br />

should be made to Communic<strong>at</strong>e a clear commitment to market actors and give a clear and<br />

realistic outlook on the feasibility of the 2020 goal of <strong>6000</strong> MW. This includes devising<br />

altern<strong>at</strong>e scenario’s and str<strong>at</strong>egies with reference to the 2020 goals and a realistic outlook on<br />

delays and setbacks and the willingness to discuss altern<strong>at</strong>ive str<strong>at</strong>egies to large scale<br />

implement<strong>at</strong>ion of offshore wind parks on the Dutch energy market.<br />

Market actors need the cre<strong>at</strong>ion of long term stable conditions and financial clarity in order to<br />

invest in projects of this size, here lies the role th<strong>at</strong> the government should wish to fulfil.<br />

Clear and realistic political commitment and accompanying transparent long term policies are<br />

needed to optimise the development of offshore wind energy to large scale proportions.<br />

However, a risk based approach by a coalition of government and market actors should be<br />

the basis of development. Toning down ambitions and high risk goals for the future prospects<br />

of projects of this magnitude should be avoided to be able to engage in proper development<br />

str<strong>at</strong>egies.<br />

86


Chapter 5 – Conclusions<br />

5.1 – Conclusions & Recommend<strong>at</strong>ions<br />

This research set out to analyze the Dutch policy procedures th<strong>at</strong> are designed to develop<br />

offshore wind energy parks in the North <strong>Sea</strong> towards the goals of the Schoon & Zuinig<br />

program of <strong>6000</strong> MW capacity in 2020.<br />

The goals of the Schoon & Zuinig program are developed in line with the broader European<br />

clim<strong>at</strong>e policy of 2020, th<strong>at</strong> oblig<strong>at</strong>es member countries such as the Netherlands to source<br />

20% of their energy supply from renewable sources.<br />

We have looked <strong>at</strong> the energy demand and supply characteristics from a European<br />

perspective and found considerable concerns regarding energy dependency and security of<br />

supply for Europe’s main energy sources, oil and gas th<strong>at</strong>, together with the global problem<br />

of Clim<strong>at</strong>e Change, for a gre<strong>at</strong> deal explain the focus on large scale development of<br />

renewable energy sources. An increase of renewable energy will increase security of supply,<br />

limit the impact on clim<strong>at</strong>e change and will result in a more stable energy environment for<br />

Europe. <strong>Wind</strong> Energy has the most potential for large scale development of the renewable<br />

sources of energy. If wind energy is developed on a large scale it will lower the need for fuel<br />

imports, and will decrease the vol<strong>at</strong>ility in the energy market.<br />

The Netherlands is very well suited for large scale offshore wind energy due to the<br />

geographic loc<strong>at</strong>ion bordering the North <strong>Sea</strong> and the large exclusive economic zone th<strong>at</strong> the<br />

Netherlands can exploit. <strong>Wind</strong> energy is general, and offshore wind energy in particular are<br />

the best suited sources of renewable energy th<strong>at</strong> can be developed on large scale and offer<br />

the most favorable prospects for the future compared to the other renewable sources, Hydro,<br />

Solar and Geothermal energy.<br />

Currently, policy th<strong>at</strong> must facilit<strong>at</strong>e large scale offshore wind energy is being developed with<br />

the goal to realize <strong>6000</strong> MW of capacity in 2020. This r<strong>at</strong>e of growth is highly ambitious and<br />

presents enormous challenges for all the actors involved in offshore wind parks. Offshore<br />

wind is not cost-effective and developers need government support for realizing these goals.<br />

I have looked <strong>at</strong> the policy instruments the government has erected especially for the<br />

stimul<strong>at</strong>ion of offshore wind energy as well as the implement<strong>at</strong>ion and results of these<br />

instruments. The current procedures will not be able to support the realiz<strong>at</strong>ion of the <strong>6000</strong><br />

MW goal, as market actors experience unclear procedures and expect<strong>at</strong>ions, policy<br />

inefficiency, lack of trust, uncertainty and lack of transparency in long term goals and<br />

commitment of the government.<br />

These problems are directly rel<strong>at</strong>ed to the lack of collabor<strong>at</strong>ion and effective leadership by<br />

the government in the first round of wind parks with a 950 MW capacity.<br />

87


Large part of the current problems can be resolved if market actors and other stakeholders<br />

are better included in the form<strong>at</strong>ion of policy and the problems th<strong>at</strong> are faced in the<br />

development of wind parks, and although much improvement in made in this respect, much<br />

remains unclear.<br />

This research has found large uncertainties with regards to the feasibility of the <strong>6000</strong> MW<br />

goal. The intensity of the investments and initi<strong>at</strong>ives to be able to guarantee <strong>6000</strong>MW by<br />

2020 is overwhelming the costs and challenges of this goal present a daunting perspective<br />

for all the stakeholders in the industry. Faced with this uncertain conditions and the high<br />

risks large scale development of offshore wind energy entail, policy has the important task of<br />

optimizing cooper<strong>at</strong>ion and cre<strong>at</strong>e a clear, coherent and effective government str<strong>at</strong>egy to<br />

develop offshore wind parks in this environment.<br />

I have been able to establish four key policy issues th<strong>at</strong> should be addressed in government<br />

policy th<strong>at</strong> will have to be addressed to support coherent development, coalition and<br />

cooper<strong>at</strong>ion with market actors and research institutes although improved, should be<br />

formalized to value these inputs in the policy cre<strong>at</strong>ion process. The government must act on<br />

increasing trust and commitment by delivering on the planned improvements for policy and<br />

subsidy schemes to support the next round of large scale implement<strong>at</strong>ion.<br />

There is a lack of transparency and long term commitment by the government, more effort<br />

should be made to communic<strong>at</strong>e a clear commitment to market actors and give a realistic<br />

outlook on the feasibility of the 2020 goal of <strong>6000</strong> MW. Altern<strong>at</strong>e scenario’s and str<strong>at</strong>egies<br />

with reference to the 2020 goals and a realistic outlook on delays and setbacks and the<br />

willingness to devise altern<strong>at</strong>ive str<strong>at</strong>egies to large scale implement<strong>at</strong>ion of offshore wind<br />

parks on the Dutch energy market should be openly discussed.<br />

The government has set clear ambitions, but the goals th<strong>at</strong> are set out to be made do not<br />

reflect a sensible and thorough approach th<strong>at</strong> projects of this magnitude and uncertainty<br />

should have. The policies th<strong>at</strong> should stimul<strong>at</strong>e large scale implement<strong>at</strong>ion are not completed<br />

and face too much uncertainty to already facilit<strong>at</strong>e sensible development of large scale parks.<br />

Slower development will decrease the risks and give more chance for learning, innov<strong>at</strong>ion<br />

and experience to develop and will result in better policy for the future of renewable energy in<br />

the Netherlands.<br />

88


5.2 Limit<strong>at</strong>ions of this Research & Suggestions for further research<br />

This thesis has focused on offshore wind energy and policy development and has focused<br />

predominantly on the Netherlands. The findings of this research can be applied to the<br />

specific procedures in the Netherlands only. More effort can be made to look into the<br />

successes and failures of policy support and market cooper<strong>at</strong>ion in other countries th<strong>at</strong> have<br />

been successful in cre<strong>at</strong>ing offshore wind parks. The UK and Denmark are countries th<strong>at</strong><br />

have been extremely successful in recent years. It is very interesting to compare the<br />

procedures and analyze wh<strong>at</strong> aspects work well in resolving the various challenges to large<br />

scale offshore wind development for other countries.<br />

The TIS theory th<strong>at</strong> I have used to analyze the functional dynamics of offshore wind energy<br />

policy is a rel<strong>at</strong>ively new concept, with the applied functional division developed in 2008.<br />

Much more research needs to be done on the applicability of this analysis in policy situ<strong>at</strong>ions<br />

to develop a better, more specified framework th<strong>at</strong> can lead to better results in cre<strong>at</strong>ing a<br />

link between innov<strong>at</strong>ion and the role of policy to stimul<strong>at</strong>e this process.<br />

An interesting approach would be to apply this functional division to successes and failures<br />

in policy projects in the past and determine wh<strong>at</strong> contribution the TIS approach could have<br />

made there.<br />

89


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on 21-05-2009)<br />

Stichting N<strong>at</strong>uur&Milieu: http://www.zeekracht.nl/achtergrond_politiek (accessed on 20-05-<br />

2009)<br />

<strong>Wind</strong> Service Holland: – home.planet.nl/~windsh/<br />

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http://www.windpower.org/en/tour/wres/euromap.htm (accessed on 06-06-2009)<br />

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