Netherlands to close all coal plants by 2030

The Dutch government this week sent a positive message to the country’s renewable energy sector with the introduction of legislation that will see all coal-fired generation plants close by 2030.

The news will come as a blow to three utilities that as recently as 2015 commissioned three coal plants in the Netherlands – the newest in Europe – but will be welcomed by clean energy advocates across Europe.

Engie, RWE and Uniper each invested heavily in Dutch coal plants completed in 2015, but now all three utilities will likely suffer massive losses on the write downs made on these coal plants, said Gerard Wynn, analyst at the Institute for Energy Economics and Financial Analysis (IEEFA).

“The impairments reflect the impact of massive growth in renewable power in neighboring Germany, which has depressed wholesale power prices, and the utilities having failed to foresee flat or falling electricity demand,” Wynn said.

Wynn added that the announcement by the Dutch government highlights the risks involved with investing in new or existing coal-fired power generation facilities in Europe, with the Netherlands now joining a growing band of EU nations that are pursuing accelerated coal phase-out plans.

“This, combined with the rise of renewables and the impact on demand of improved efficiency, puts old electricity production models at risk,” Wynn said.

The directive from the Dutch coalition-pact states that the government will introduce a binding target to cut carbon emissions by 2030 in order to put a floor beneath carbon prices. The new standards also require coal plants to meet tougher limits for mercury, nitrogen dioxide and sulphur dioxide emissions. These standards will be implemented from 2021.

Last month, the Netherlands allocated 2.3 GW of new solar capacity in the spring round of its SDE+ auction program for large-scale renewables.