Policy options for improving security of energy supply

Security of the national energy supply is nowadays more important than ever. The Dutch Ministry of Economic Affairs commissioned the Netherlands Bureau for Economic Policy Analysis, CPB, to review the social costs and benefits of a number of policies to improve the security of the national energy supply. One of the main aims of the envisaged project was to identify policies to mitigate the effects of any future disturbance of energy markets and/or reduce the costs of such disturbance. A second key objective was to assess the benefits and costs of implementing these measures.

This background document, prepared by CE, looks at some of the policy options available for improving energy security and presents an exploratory cost-benefit analysis of’ the six measures selected for further evaluation. The costs that have been taken into account include some categories of external costs, administrative costs, and costs of technical measures. However, there is no full cost-benefit analysis included in this report, as several c cost-categories have not been taken into account.
The main aim of this report is hence to illustrate to the CPB some cost categories which they found hard to estimate from their models. It is therefore a background document for wider analyses to be conducted by CPB.

The six options for which costs have been identified in this report are:

1. Designation of 7 new wind power sites (implementation of a plan by GroenLinks).
2. Extension of ACEA agreement to trucks and vans to improve CO2 emission profiles.
3. Blending of an indicative percentage of biofuels in transport fuels according to EU-Directive.
4. Incentives for use of biofeedstocks by the chemical industry.
5. Increasing domestic gas production by intensifying the ‘small field’ policy and sanctioning exploitation in the Wadden Sea and Biesbosch nature reserves.
6. Tightening of the EPC energy performance standards for new buildings and intensification of EPA policy for current housing stock.