Dutch debate introducing a capacity market

The energy industry in the Netherlands is debating whether to introduce a capacity market.

Platts reports that the industry is attempting to respond to the "poor power plant economics" that have seen a persistent shutting of gas-fired power capacity in recent years.

Whilst Germany's RWE, which owns Essent, is in favour of capacity markets, Dutch utility Delta is still considering the matter, and Vattenfall-owned Nuon is firmly against.
Dutch gas-fired power
Utilities have mothballed nearly 4.5 GW of Dutch gas-fired capacity since 2012, with RWE involved in 2.5 GW of those closures.

However, supply margins remain robust, with a number of new Dutch coal-fired stations either having just come online or due to do so in the coming months and strong importation capacity from Germany.

RWE would prefer a capacity market, and spokesman Lothar Lambertz said it is necessary to rethink the market design by introducing a mechanism which values the supply of capacity and not only the production of electricity. “This mechanism should be open for every technology from the supplier side as well as from the consumer side, be market-based and oriented towards European solutions,” Lambertz said.

Increasing imports of German renewable energy, in particular, make the Dutch system vulnerable to the loss of gas-fired capacity, according to Delta. Company spokeswoman Mirjam van Zuilen said, "If there isn't enough supply from Germany and we close our own plants, there will be a problem for industry as we will not have enough baseload power."

The Dutch government is currently in consultation with industry on the question of capacity markets, and is due to make a decision early next year.

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