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Titel:
Energy Market Trends in the Netherlands 2001
 
Auteur(s):
 
Gepubliceerd door: Publicatie datum:
ECN Beleidsstudies 1-12-2001
 
ECN publicatienummer: Publicatie type:
ECN-P--01-014 Overig
 
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Samenvatting:
Energy Market Trends in the Netherlands 2001 satisfies a need for anoverview of information for a broad spectrum of people interested in the Dutch energy market.Information about developments in the energy market is presented in two ways in each part. Factual information about developments in the energy market is presented in Overview. After each Overview there is a section called Insight where one or two observations are made regard-ing important developments occuring in the energy market, followed by an analysis of these de-velopments and expectations about the near future. Energy Market Trends in the Netherlands is divided into four parts, each of which deals with an important aspect of the energy market as its theme:

  1. Energy Policy and Market Regulation
    The establishment of guidelines for the free energy market in the Netherlands is nearing completion. After the introduction of detailed regulatory procedures for the electricity market in 1999 and 2000, more guidelines have been established for the gas market by the appointed supervisor, the DTe, in 2001. In this same year the market for renewable energy became completely ?free?. In 2002 the free energy market will be further enlarged because medium-sized customers will then also be free to choose their energy supplier.
    It is gradually becoming clear whether regulation of the free energy market is functioning well and whether the promised advantages of liberalisation will be obtained. The government recognises that a liberalised energy market may entail new risks, e.g., regarding supply security and price formation resulting from energy market forces. In the coming years more attention will be paid to monitoring market forces, and if necessary regulatory procedures will be adjusted to counter undesired effects.
    The beginning of part one of Energy Market Trends in the Netherlands 2001 presents an overview of the development of policy and regulatory procedures for the electricity and gas markets. This is followed by an analysis of the problems that need to be surmounted for a properly functioning competitive gas market in the Netherlands.
    Energy policy and market regulation consists of the following chapters: Overview: Development of regulatory processes. Insight: Difficult implementation of the Gas Act.
  2. Market structure and strategy
    Liberalisation of the electricity and gas markets has led to mergers and acquisitions in the energy sector, both in electricity production and energy distribution. There appears to be a certain consolidation. The relative quiet is probably also a result of the conditions set by the government on the privatisation of Dutch energy companies. Energy companies, however, are expecting scale increase. The electricity production sector is already dominated by foreign energy companies, and in energy distribution the expectation is that the role of foreign companies will also become greater.
    Meanwhile, energy suppliers are preparing themselves for the next fase of the liberalisation: in 2002 a second group of large users will be able to choose their own energy supplier. In 2001 the market for green electricity has become free. Large energy suppliers have launched public campaigns in which they seem to use the image of renewable energy to gain public favour. This part of Energy Market Trends in the Netherlands 2001 further describes the way in which energy suppliers are preparing themselves for competition in the retail market. Two analyses in Insight examine, in succession, competition in the green electricity market and competitive strategies of existing energy suppliers in a free retail market. Overview, which precedes the two analyses, presents the current structure in the markets for electricity, gas and green electricity.
    The beginning of part one of Energy Market Trends in the Netherlands 2001 presents an overview of the development of policy and regulatory procedures for the electricity and gas markets. This is followed by an analysis of the problems that need to be surmounted for a properly functioning competitive gas market in the Netherlands.
    Market structure and strategy consists of the following chapters:
    Overview: Dutch energy market.
    Insight: Competition in the retail market starts with green electricity.
    Insight: The new face of existing energy utilities.
  3. Choice of technology and environmental consequences
    The energy sector is a capital-intensive branch of industry. Liberalisation of the energy market has a great influence on the way in which investment decisions are made. This applies to the replacement and expansion of installations and systems, and even more so for investments in new energy technologies. Technological changes in the energy supply emanate from striving towards lower environmental impacts ? especially reductions in greenhouse gas emissions ? and the increased use of renewable energy sources.
    Measures to limit the environmental effects of energy production have an increasing influence on the price of energy produced. The introduction of trade in emission reductions (NOx, CO2) will decrease emission reduction costs and also define the choice of technologies to be used.
    The increasing demand for forms of green energy stimulates the development of renewable energy technologies. For the Netherlands, wind and biomass are the most important sources of renewable energy. This third part of Energy Market Trends in the Netherlands 2001 provides insight into expected developments of two of these renewable energy technologies: offshore wind turbines and use of biomass in coal-fired power plants. These insights are preceded by an overview of technologies used for energy production in the Dutch energy market and in neighbouring countries, as well as an overview of the environmental effects of energy production.
    Choice of technology and environmental consequences consists of the following chapters:
    Overview: Energy production and emissions
    Insight: Growth of renewable energy supply depends on success of offshore wind energy.
    Insight: Leading role for coal power plants in Dutch renewable energy supply.
  4. Energy prices
    A well-functioning liberalised energy market should lead to cost efficiency for the energy supply, enabling the energy prices to reflect these costs. However, there must be a distinction made between the part of energy prices that are actually established by competition, such as the production and supply of energy, and the part that has to do with regulated activities in the energy market, such as energy transport. Government levies, such as the fuel tax and regulatory energy tax, are also part of end-user prices.
    Competition in the supply of electricity can cause an initial fall in prices. However, in the mid to long term there may be a supply shortage, which will cause prices to increase and, in particular, fluctuate more. In the gas market, the relationship between gas price and oil price may play a less important role as a consequence of an increasing gas-to-gas competition. For the moment, however, competition in the gas market is even less developed than in the electricity market.
    In this last part of Energy Market Trends in the Netherlands 2001 an overview is first given of different prices, tariffs and taxes that play a role in the gas and electricity markets. This is followed by two analyses that give insight into price formation in the electricity market and the structure of both gas and electricity prices. Furthermore, the structure of the current prices for green electricity is also described. Lastly, expectations are given about energy prices in a future, fully open energy market.
    Energy prices consists of the following chapters:
    Overview: trends in energy prices.
    Insight: Price formation and market behaviour in the electricity market.
    Insight: Structure of current and future energy prices.


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