Market approaches have drastically curtailed the role the Dutch government can play in a just energy transition, which cannot succeed without significantly reducing the country’s energy use. The government urgently needs to oversee a reduction in energy use, especially by large companies. Companies have been required to save energy since 1993, but for a long time this was not enforced. This is now changing, but inspectors are still only allowed to impose an energy-saving measure if it pays for itself within five years. For example, supermarkets have been able to refuse to install doors on their refrigerators for years.
The stubborn insistence of past administrations on non-binding agreements with companies has rarely led to the envisioned increase in sustainability, especially when it comes to the country's biggest polluters. Until Russia’s invasion of Ukraine, the Netherland’s 430 largest CO2 emitters were exempt from any obligations to reduce their energy consumption. Meanwhile, the government encourages energy savings with financial incentives, such as taxes and subsidies, which have had regressive socio-economic impacts and worsened inequality. For example, in recent years, households and small consumers were paying for energy transition policies through their energy bills, while the proceeds were given as subsidies to wealthy producers and large consumers.
Take the case of Swedish multinational Vattenfall, which received more than half a billion euros in public funds between 2015 and 2020, on top of the 900 million in subsidies promised for upcoming projects. During this period, the amount of renewable electricity Vattenfall Netherlands generated almost halved. This did not stop the company from making 387 million euros in profit, while also paying out more than a billion euros to its sole shareholder, the Swedish state.18 This way, hundreds of millions of euros in public funds are flowing away – public funds that are desperately needed for the energy transition.
What’s worse, investors tend to receive far more subsidies than strictly necessary, according to research by Daan Hulsthof, a researcher at the University of Groningen.19 Companies simply cherry-pick the projects where they can make the most profit, with profits sometimes as high as 50 per cent. Hulsthof, in collaboration with research platform Follow the Money, calculated that shareholder profits can be as much as 384 million euros higher than the subsidy scheme envisages.20
The Netherlands’ privatisation policies have dangerously delayed the energy transition. According to EU climate targets, 14 per cent of national energy consumption should have come from renewable energy sources in 2020, but based on domestic production, the Netherlands only achieved 11.1 per cent.21 In response, the government imported 200 million euros worth of green electricity from Denmark. Without this 'statistical transfer', the Netherlands would not have met the EU target. By 2023, solar energy and offshore wind have grown rapidly, but the Netherlands’ share of renewable energy in 2021 was still much lower than the European average.22
Moreover, the government plans to phase out subsidies for small-scale solar farms from 2025 onwards. Energy transition developments in countries like Germany and the United Kingdom have shown that once government support for renewable energy declines, private investment drops as well. If high energy prices persist, this may be less of a concern – but in that scenario, the Dutch population will continue to subsidise excessive profits through their energy bills.