According to the recently concluded sector agreement, gas production in the Netherlands will receive a boost in the coming years. This is a step towards greater energy independence, but it also provides an additional financial windfall for the treasury. How many homes could be made more sustainable with that money?
In the next five to ten years, the Dutch government could make significant investments in the sustainability of homes by increasing natural gas production in the North Sea. Without policy changes, an estimated 35 to 40 billion cubic meters of gas would still be extracted from the North Sea. Thanks to the sector agreement signed on April 23, this will become ‘at least’ 100 billion cubic meters.
In April 2024, research agency Ecorys published a report on the expected additional gas revenues if North Sea production were to be ramped up. Commissioned by Element NL, Ecorys also calculated how many residential neighborhoods could be made more sustainable with those revenues.
Billions in revenue from increased gas production
Seventy cents of every euro in gas revenue goes to the treasury. The total additional gas revenues depend heavily on the gas price. Based on financial scenarios from the Netherlands Environmental Assessment Agency and the International Energy Agency, Ecorys expects billions in revenue. “With the sale of the additional gas, the government receives between €3.6 and €5.5 billion,” the report states.
"The projected additional gas revenues are still within the same range"
Although the report is now a year old, Menno van Benthem, advisor at Ecorys and co-author of the report, expects that the projected revenues will not be lower. “It’s difficult to predict gas prices. But the forecasts are still within the same bandwidth. So the projected additional gas revenues are still within the same range,” says Van Benthem.
Annual energy costs drop by €450 million
If these additional gas revenues are used to make homes more sustainable, nearly 400,000 houses could be upgraded, including more than 50,000 households experiencing energy poverty. This includes insulating homes and installing heating systems that do not rely on natural gas. A year ago, Ecorys estimated that nearly 500,000 homes could be upgraded, but due to inflation, the cost of making homes sustainable has risen significantly, leading Van Benthem to estimate that 20 percent fewer homes can be tackled for the same amount of money.
This would reduce annual fixed energy costs by up to €450 million. In this calculation, Ecorys assumes that households not experiencing energy poverty contribute to the investment themselves.
Domestic gas brings additional benefits
Besides financial gains, there are other societal benefits. First, there are climate benefits, as more sustainable homes emit less CO2—around 0.73 megatons per year. Additionally, the combination of increased domestic gas production and neighborhood sustainability measures makes the Netherlands less dependent on imported gas. Moreover, the North Sea infrastructure will remain intact a little longer, allowing platforms and pipelines to be used later for CO2 storage and the production of green hydrogen.
