Research Shows Existence of Most Total Energy Plants Is Not under Immediate Threat
Following research carried out by the Market Surveillance Committee (MSC) of NMa and DTe, the Office of Energy Regulation (DTe) has established that under present market conditions the existing total energy plants are in a position to compete with traditional electricity producers in a liberalised market.
Total energy plants, which account for almost 40% of electricity supply in the Netherlands, appear to be in a good position to recover their variable costs, such as fuel costs. The revenues which total energy plants generate through the production of electricity during peak hours compensate for the losses which they incur in off-peak hours (electricity production at night and in the weekend). Since the total energy plants are able to recover their variable costs in the present situation, MSC concludes that, for the time being, there is no reason to assume that energy production by total energy plants will cease in the short term. Analysis shows that only 2 percent of the plants would not be viable under present market conditions. The analysis does not include the present subsidy, the Regulatory Energy Tax [Regulerende Energiebelasting (REB)], and the district heating plants.
Total energy plants, which supply a grid with electricity through a grid manager, receive a premium from the grid manager through the Regulatory Energy Tax with a view to stimulating the supply of renewable energy. MSC has noted that the operators of total energy plants do not receive this so-called 'ecotax' if they supply their electricity to parties who do not share out this premium. This affects the freedom of choice of the operator of the total energy plants. MSC recommends amending this rule so that parties who buy electricity from environmentally friendly producers are obliged to pass on the premium.
By means of the simultaneous generation of electricity and heat by the same plant, a relatively high yield is achieved, which saves energy. This method is also less damaging to the environment because less CO2 is released. This makes total energy plants an effective means for combating the greenhouse effect.
MSC bases its analysis partly on the model-based analyses and calculations of Energieonderzoek Centrum Nederland (ECN) [Energy Research Centre of the Netherlands]. ECN's research, which was carried out on the instructions of the Ministry of Economic Affairs, will be published by the Ministry. The date of publication is not yet known.