Amendment of the Dutch Mining Act (Mijnbouwwet) introduces a separate licence system for geothermal energy exploration and extraction: a leg up for the energy transition in the Netherlands
14 November 2022
Geothermal energy, also known as geothermal heat, is extracted from hot water (called formation water) pumped up from deep underground (at least 500 metres) through a well. The heat from the hot water is transferred to a heat network via a heat exchanger and can then be used to heat homes and other buildings. Being a source of renewable energy, geothermal energy can play a prominent role in accelerating the energy and heat transition in the Netherlands. This is because geothermal energy is CO2-free, virtually inexhaustible and independent of weather and seasonal conditions. It also can be used as an alternative to natural gas for heating spaces and for hot tap water. In the Netherlands, geothermal energy currently plays a relatively minor role as a source of heat, but the government is increasingly encouraging the extraction of this renewable energy source with a view to accelerating the energy transition. One way of doing so is by allowing initiators of geothermal energy extraction to apply for a subsidy for geothermal energy projects under the Renewable Energy Production and Climate Transition Incentive Scheme (SDE++). In addition, the legislator recently decided to amend the current Mining Act – which contains the legal framework for the exploration and extraction of minerals and geothermal energy in deep underground – by making it more ‘geothermal energy friendly’.
Accordingly, on 11 October of this year, the Senate passed a bill amending the Mining Act (the Legislative Amendment). The Legislative Amendment introduces a new licence system that will apply specifically to geothermal energy. It also aims to make geothermal energy exploration and extraction safer for surrounding areas. In a letter dated 20 October, the State Secretary for the Extractive Industries informed the House of Representatives regarding the key points of the policy for the safe and responsible handling of physical risks and uncertainties related to geothermal energy, such as preventing damage and protecting ground water and drinking water supplies.
In this contribution, we will discuss the reasons for the Legislative Amendment and the new licence system it contains. We will conclude with some final remarks.
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