Energy policy evaluation in practice: the case of production subsidies and DEN-B in the Netherlands

This paper describes how energy policy can be evaluated in practice. The goal is to make policy makers aware of how an evaluation can be based on scientific principles and to help economists appreciate how an evaluation can be performed if strong empirical evidence is lacking. We have built a basic evaluation framework and have applied this to a selection of Dutch energy policy instruments, namely production subsidies and their complementary non-financial instrument, DEN-B. Our evaluation criterion was effectiveness, defined as the extent to which policy instruments contribute to achieving policy goals. The evaluation was based on existing ex post evaluations complemented by interviews and other available data. We conclude that production subsidies and DEN-B were (partly) effective. Furthermore, the Dutch government increased effectiveness by reconsidering the design of production subsidies. We also formulate lessons for future policy evaluations and energy markets policies.