This week, the website CleanTechnica published an article suggesting that the Dutch government thinks it can build two new nuclear power plants for €5 billion. The article also states the Dutch government does not have a schedule for the new nuclear power plants. The author finishes the article saying that the windy country is not leaning into renewables as it should. I am afraid the article is based on an outdated understanding of the Dutch energy policy. In this blog, I will try to summarise the actual status of the Dutch plans for new nuclear power plants. As well as highlighting the ambitious national policy for renewable energy and its results. The Netherlands is currently no. 4 in the world in terms installed offshore wind energy capacity and no. 2 in terms of installed solar pv capacity per capita.
In an article titled ‘Classic Megaproject Early Mistakes Will Create A Fiscal Disaster For Netherlands Nuclear’, Michael Barnard writes about the Dutch plans for two nuclear power plans. I agree with Barnard that the construction of new nuclear power plants in the West has not been a big succes in the last two decades. Projects in the US, France, Finland and the UK have seen massive delays and cost overruns. I do at the same time think that Barnard paints too naïve a picture of the Dutch energy policy.
Before I dive into the content, it may be good to say a few things about my own background. I am a Dutchman and I currently work for the Dutch national grid operator TenneT on the offshore grid to bring offshore wind energy to shore. I write this blog in a personal capacity (and in my spare time). I am not involved in the plans for new nuclear power plants in the Netherlands. I have however been following the debate on the role of nuclear energy in Netherlands. I am convinced that the Dutch approach is less naïve than the article suggests and better informed about the relevant developments in other countries. I will discuss some of the key statements from the article one by one. I have tried to be as precise and factual as possible. As with all my blogs, I am eager to hear if I have made mistakes or if I have missed important points or references.
The Dutch government did not suggest that two new nuclear power plants will cost €5 billion
The article is based on the premise that the Dutch government has stated or suggested that two new nuclear power plants would costs only €5 billion. Barnard writes ‘When equivalent projects are looked at, €5 billion is clearly a gross understatement of the real costs, but is also clearly the only number that the [Dutch] government believes it can sell’ and ‘There’s also strong evidence of the optimism bias, as going from no nuclear construction industry to two working reactors in 13 years is radically unlikely, as is the €5 billion price tag‘.
The Dutch government has however -as far as I know- never stated that two new nuclear power plants would cost €5 billion. What it did say in its 2021 coalition agreement is the following:
“The government will also take the necessary steps for the construction of two new nuclear power plants. This means that, among other things, we will assist commercial operators in their exploratory studies, support innovation, carry out tender procedures, consider the contribution (financial or otherwise) to be provided by public authorities, and prepare legislation where necessary. We will also ensure safe, permanent storage of nuclear waste.“
2021 Coalition agreement of the Dutch government
In the financial annex of the coalition agreement, the government reserved €5 billion for the construction of new nuclear power plants. The government did not suggest that the €5 billion would be sufficient for the construction of two nuclear power plants. This is also clear from the wording in the quote above: ‘assist commercial operators‘ and ‘consider the contribution (financial or otherwise)‘.
The current and previous Dutch government published several studies which included an overview of the costs of recent new nuclear power plants
The current and previous Dutch government published several studies containing an overview of the costs of recent new nuclear power plants in the West. These reports describe in detail how these projects have suffered from severe delays and cost overruns. This reconfirms that the Dutch government does not suggest that two new nuclear power plants could be build for €5 billion. Below an overview of some of the most relevant studies published by the Dutch government.
The previous Dutch coalition government was made up of the same four political parties as the current government. In July 2021, the previous government published the results of a KPMG market consultation on nuclear energy. The report contains an extensive overview of recent nuclear power plant construction projects in the West. In the summary it is stated that recent new FOAK (first-of-a-kind) nuclear reactors of generation III+ have a capacity of 1200-1500 MW and construction costs between 7.0 and 13.2 billion euro (based on the projects Flamanville 3, Hinkley Point C, Olkiluoto 3, Hahnikivi and Vogtl).
New nuclear reactors of generation III+ in the West have construction costs between 7.0 and 13.2 billion euro
Quote from KPMG Report published by the previous Dutch government
The report also gives an overview of the cost overrun of different projects compared to the original project as illustrated in the graph below (‘Oorspronkelijk budget’ = original budget; ‘Meerkosten’ = cost overrun).
In September 2022, the current government published two more studies on new nuclear power plants. The consultancies Witteveen+Bos and eRisk Group coordinated a study on the potential role of nuclear energy in the future energy mix in the Netherlands. In addition, consultancy Baringa did a study called ‘Financing models for nuclear power plants – European power plants case studies’. Both reports give an overview of different aspects of the recent new nuclear power plant projects, including the actual costs and construction times. See page 30-31 in the study by Witteveen+Bos and eRisk Group and page 10-45 in the Baringa study.
In December 2022, the Dutch government sent a letter to Parliament outlining how the agreement on new nuclear power plants will be implemented. In a footnote in the letter (p.21), the government refers to the study by Witteveen+Bos and eRisk Group indicating that -based on the IEA/NEA report Projected Costs of Generating Electricity 2020– a benchmark for the capital costs for a 1600 MW plant is estimated at €5.6 billion, excl. financing costs.
One can definitely argue that this cost benchmark is very low compared to the actual costs of recent new nuclear power plants in the West. It is however at the same time an indication that the Dutch government is not trying to sell the story that two new nuclear power plants would costs €5 billion.
Is it true that ‘The Netherlands doesn’t have a plan, just an aspiration‘?
Barnard states that the Netherlands doesn’t have a plan for the new nuclear power plants and no schedule. I think you can say that the Dutch government does not yet have a detailed plan for the construction of new nuclear power plants. In a recent letter to Parliament, the government did however publish a roadmap. The roadmap describes the different phases as illustrated in the figure. Phase 1 (2022-2024) is the preparation of the decision making, phase 2 is the execution of a tender to select the party which will build the plants, phase 3 is the permitting and phase 4 is the actual construction and commissioning.
Barnard suggests the Dutch government is ignoring the experience in other countries not just with regard to costs but also with regard to planning. In addition to the studies mentioned above, the Dutch government published the results of an analysis on the timelines of nuclear power plant construction by the Boston Consulting Group. The results highlight the construction timelines of different nuclear power plants in other countries, see below. It also describes the different steps in process and the uncertainties and potential delays.
Looking at the experiences abroad, I personally think that it is more than fair to have a discussion whether it is realistic that a new nuclear power plant in the Netherlands will be operational in 2035. I do at the same time think that Barnard is incorrect in suggesting that the Dutch government ignores the delays in construction projects abroad.
Is it true that the Dutch ‘don’t know what nuclear technology they will use’?
The article states that the Dutch don’t know what technology they will use. In the letter to Parliament mentioned above, the government has however explicitly stated that the it has chosen to use reactors of the III+ generation and why. The letter also describes how the Minister intends to organize early and structured interaction with different technology suppliers to reduce uncertainties in costs and planning. The Minister states he has allocated significant budget for technical feasibility studies. Based on these studies, the Minister intends to start the actual tender process in 2024 to select the party which will execute the project. I would say that it is true that the Dutch have not yet selected a specific reactor design. They have however chosen to use a reactor of the III+ generation and described the process for the selection of the actual supplier of the reactor technology.
Conclusion on Barnard’s criticism on Dutch nuclear plans.
I agree with Barnard that for the Netherlands -and for any other country considering new nuclear- it is essential to look at recent experiences in other countries. In the last two decades, the construction of new nuclear power plants in the West have been faced with severe delays and cost overruns. I find it unfortunate that Barnard writes his article on the basis of a caricature of the Dutch plans. If he wants to contribute to the debate, I would recommend that he first reads up on the actual status of Dutch policy. In this blog, I have tried to give references to some of the relevant documents.
Have the Dutch not been leaning into renewable as they should have?
In the final paragraph of his article, Barnard writes: ‘It’s remarkable that the Netherlands considers this [new nuclear power plants, JV] a viable route, but for a flat windy country, they have clearly not been leaning into renewables as they should have’. Fortunately, the latter is no longer true.
Until around 2012, the Dutch were not very serious about renewable energy. That has however completely changed in the last decade with a strong growth of wind as well as solar energy in the country.
The Dutch are no. 2 in the world in terms of installed solar pv per capita
The Dutch have installed a huge amount of solar panels in recent years. By the end of 2022, Statistics Netherlands estimated the installed capacity of solar panels to be close to 19,000 megawatt. According to the International Energy Agency, the Netherlands is no.2 in the world in terms of installed solar pv capacity per capita. In 2022, solar energy provided 15% of the total Dutch electricity consumption. I would say that is not bad for country so far from the equator.
The Dutch are no. 4 in the world in terms of offshore wind capacity
The Netherlands is working on the roll-out of a very ambitious roadmap for offshore wind energy. The country is currently no. 4 in the world in terms of offshore wind capacity. In 2022, wind energy onshore and offshore together covered 19% of the total Dutch electricity consumption. The government target is to have 21 gigawatt of offshore wind installed by 2031. The Netherlands Environmental Assessment Agency estimated that in 2030 renewable sources will produce the equivalent of 85% of the total national electricity consumption, with the main share coming from wind and solar energy.
Conclusion on Barnard’s criticism on Dutch renewable energy policy
For a long time, the Netherlands was one of the laggards in Europe with regard to renewable energy. That has however dramatically changed in recent years. In 2022, no less than 40% of the total Dutch electricity consumption was covered by renewable sources. This is expected to increase to as much as 85% by 2030. Barnard therefore does not need to worry that the Dutch plans for new nuclear power plants mean that renewable energy resources remain underdeveloped.
Energieblog van Jasper Vis 