Green energy contract

The Promise of Sustainability

In the liberalized Dutch energy market, consumers have the freedom to choose their electricity and gas suppliers. This has led to the widespread availability of 'green energy contracts' (groene energie). When a tenant signs up for a groene stroom (green electricity) contract, the energy company commits to sourcing an amount of electricity equivalent to the tenant's consumption from renewable sources such as wind turbines, solar panels, or biomass. This process is certified through a system of Guarantees of Origin (Garanties van Oorsprong or GvO), a tracking mechanism within the EU that labels each megawatt-hour of renewably produced electricity. By choosing a green contract, consumers can signal their preference for sustainable energy and contribute to the demand for renewable generation.

Many suppliers also offer 'carbon-compensated' gas (CO2-gecompenseerd gas). Since natural gas is inherently a fossil fuel, it cannot be 'green' in the same way electricity can. Instead, the supplier calculates the carbon emissions resulting from the tenant's gas consumption and invests in projects, often abroad, that are designed to offset those emissions, such as planting trees or funding renewable energy projects in developing countries. For environmentally conscious tenants, these contracts offer a straightforward way to reduce their household's carbon footprint. Many providers market themselves heavily on their green credentials, offering various shades of green contracts, from standard wind power to locally sourced Dutch solar power.

Scrutinizing the 'Green' Label

A healthy dose of skepticism is warranted when evaluating green energy contracts. The European GvO system, while well-intentioned, has a major loophole. It allows for the unbundling of the guarantee from the physical electricity. This means a supplier in the Netherlands can buy cheap electricity from a coal-fired plant and separately buy cheap GvO certificates from, for example, a Norwegian hydropower plant that has been in operation for decades. They can then legally package and sell this coal-powered electricity to a Dutch consumer as '100% green hydropower'. This practice, often referred to as 'greenwashing' or sjoemelstroom (fiddled electricity), means the consumer's choice has no actual impact on stimulating new investment in renewable energy. The greenest suppliers are those who invest directly in new renewable capacity, preferably in the Netherlands, rather than simply trading in foreign certificates.

Similarly, the effectiveness of carbon offsetting for natural gas is a subject of intense debate. Critics argue that many offsetting projects lack transparency and their claimed environmental benefits are often exaggerated or difficult to verify. It can be a way for suppliers and consumers to feel good about their consumption without making the more difficult change of actually reducing it. Independent consumer organizations in the Netherlands, like the Consumentenbond or Wise Nederland, regularly publish rankings of energy suppliers based on the genuine sustainability of their investments and sourcing practices. A truly committed tenant should consult these resources to look beyond the marketing slogans and choose a supplier whose practices align with their principles, rather than one who is simply adept at trading certificates.