1

Partnership for a sustainable future ECN Annual Report 2008

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4 Foreword prof. dr. Ruud Lubbers

38 ECN profile: fact and figures

46 Nuclear Research and consultancy Group

50 Energy Advisory Committee, External Review

Committees and Consultative groups

52 Supervisory Board and Board of Directors

54 Corporate Governance Report

55 Report Supervisory Board

56 Directors’ Report

59 Financial Report

79 Colophon

Wind Energy

Policy Studies

Solar Energy

Biomass, Coal & Environmental Research

Hydrogen & Clean Fossil Fuels

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6

16

12

24

27

31

Efficiency & Infrastructure

Introduction Board of Directors

Engineering & Services35

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ForewordThis is ECN’s annual report for 2008. It was an eventful year in many

respects. Barack Obama’s election as president of the United States was

obviously of great political and symbolic significance. He impressed me

greatly with his victory speech and his timeless credo that encapsulates

the spirit of a nation: ‘Yes, we can’. Now that the new US administration’s

first measures are being put into effect, I hope that the revitalisation of

the American dream will provide a stepping stone to a Green New Deal

that tackles both the climate crisis and the economic crisis. In Europe,

too, we must reverse the economic slowdown and use it to speed up the

transition to a sustainable energy system. Precisely at a time when one

crisis appears to exacerbate another - green policy is being shelved,

sustainable investments are waning worldwide, financing of green pro-

jects is progressing ever more sluggishly - we must seize the new

opportunities. It means innovating under financial pressure, with daring

and vision. ECN will take up that challenge, provided that we now innovate

truly across an international front, preferably at an accelerated pace. If we

succeed, the recession may prove to be a blessing in disguise. A precon-

dition is once again an active government: if the government fails to act,

it will seriously imperil all sustainability plans.

The fourteenth UN Climate Conference was held in Poznan in December

2008, at the height of these developments. It has to be said that Poznan

was not a historic meeting. The meeting was merely a stopover on the

way to the Copenhagen climate summit in December 2009, where a new

international climate treaty (post-2012) must be established to succeed

the Kyoto Protocol. The major task facing the international community in

Copenhagen is to get the US and China on board for a new climate treaty.

I am not disappointed about the Poznan results. Poznan gave the parties

an opportunity to gather information and to adopt a position in a fast-

changing climate context. But make no mistake, the stakes are incredibly

high: how should the world respond to the climate change threat that will

unfold in its full scale about 50 to 100 years from now? The enormous

economic interests involved make joint decisions extremely difficult.

Therefore it was reassuring that Europe lined up as one in Poznan. The

same can be said of Europe’s fairly unanimous acceptance of the European

Commission’s energy and climate package in December: after approval

by the member states, 550 members of the European Parliament sup-

ported the package. While the package does not go as far as the plans

presented earlier, the fact remains that agreement was ultimately reached

on the world’s most ambitious climate proposal. Politically, Europe is

clearly taking climate change seriously.

The emissions trading system (ETS) has been given an important role in

the climate package. The most controversial question was whether com-

panies would receive emissions allowances for free or whether they

would be auctioned. It has been agreed that for industry and electricity

companies an increasingly large proportion of these emissions allowan-

ces will be auctioned step-by-step from 2012 until all emissions

allowances go on auction in 2027. This is less pioneering than the EU’s

original proposal. But we must wait and see whether the perspectives of

the ETS system, before and after Copenhagen, are sufficiently clear to

actually lead to sufficient investments.

Europe, and particularly the Netherlands, will need all possible options to

achieve their climate goals. It means conducting research into the use of

sustainable energy, energy conservation and clean use of fossil fuels, all

fields in which ECN made substantial progress in 2008. I would like to

mention the research into the development of solar modules, wind farm

aerodynamics, second generation production of green gas from biomass,

capture of CO2 combined with hydrogen production or otherwise, impro-

vement of the efficiency of acoustical and chemical heat pumps and the

built environment. The Netherlands is making headway with CCS (CO2

Capture and Storage), although the government is still deferring the

decision on safeguarding transmission and storage through Gasunie and

EBN.

The Strategic Energy Technology (SET) plan came into force in Europe.

One of the elements of the plan is establishment of European cooperation

between major national energy R&D institutions in the European Energy

Research Alliance (EERA). The main goal of this group of leading energy

research institutions - which together possess an annual R&D budget of

about €1.3 billion - is to speed up development and introduction of new

energy technologies. ECN is playing an important role in this work. This

initiative is designed to accelerate the development and use of this tech-

nology in the market, which is a very good development given the urgency

of establishing a sustainable energy system as soon as possible.

After being shut down in the summer of 2008 due to the discovery of a

small trace of gas bubbles in the cooling water circuit, NRG was given

permission in March 2009 to restart the High Flux Reactor. This occurred

under strict safety precautions and intensive monitoring and fortunately

enabled resumption of the production of isotopes for medical purposes.

NRG also made substantial progress in developing and producing new

radioisotopes for nuclear medicine, effective recycling of plutonium and

research into the final storage of radioactive waste.

I wish to congratulate ECN on getting a subsidy for the ADEM initiative

(Advanced Dutch Energy Materials), which will strengthen fundamental

energy research in cooperation with the technological universities. I am

also delighted with the growing cooperation with the business community

and with the increasing number of energy technologies finding their way

to the market.

Compliments are due for the motivation displayed by management and

employees in 2008 during their work to fulfil ECN’s mission - the develop-

ment and marketing of sustainable energy technology.

Prof. dr. Ruud Lubbers

Chairman

ECN Supervisory Board

ECN provides knowledge for climate negotiations

During the 13th UN climate conference in Bali in late 2007, it was agreed

that negotiations would be started in four different fields: mitigation,

adaptation, financing and technology. In all of these fields, the United

Nations Framework Convention on Climate Change (UNFCCC) is gathe-

ring knowledge to support the negotiations. Towards the end of 2009, the

negotiations in Copenhagen must lead to a new climate treaty that effec-

tively reduces greenhouse gas emissions in industrialised and developing

countries, ensures a fair adaptation policy, and frees up sufficient funding

while finding the most practical policy measures for bringing about tech-

nological changes.

ECN’s contribution to this process in 2008 and 2009 is considerable. In a

project for the UNFCCC, employees of ECN Policy Studies are helping to

identify the financing needed to get technological changes moving. This

gives rise to challenges for the transfer of technology and knowledge, as

well as to questions about how to build up the best possible capacity for

implementing climate-friendly technology in developing countries.

Besides work focused on technology, the international carbon market is

another important matter, and will remain so after the Copenhagen sum-

mit. ECN Policy Studies employees are assisting the Ministry of Housing,

Spatial Planning and the Environment and the UNFCCC in calculating

possible reforms and the future of the Clean Development Mechanism.

In these projects ECN works closely with partners, for example the

Netherlands Environmental Assessment Agency and the Institute for

Environmental Studies of the VU University Amsterdam.

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Introduction Board of DirectorsThe conclusion is inescapable: the mushrooming financial crisis and

rapidly deteriorating economic crisis form an important theme in a review

by the ECN Board of Directors. Even in the last quarter of 2008, there

were signs of decreasing activity at branches of industry involved in

sustainable energy, resulting in declining and/or deferred investments in

innovation. The new activity in the world of sustainable energy has

become more vulnerable and the innovations necessary to achieve the

climate-energy objectives of 2020 and 2050 are under pressure. The

effects of this situation on ECN’s medium and long term research are now

becoming clear, especially because of the slowdown of industrial con-

tracts. This is certainly the time for extra attention and specific financing

aimed at bringing ECN technology to the market. But the economic crisis

also creates new opportunities, according to Ton Hoff (Chairman of the

Board) and directors Kees van der Klein and Gerald Santing. What is

needed? A national Green New Deal.

Hoff, Van der Klein and Santing do not beat about the bush: the ECN

board wants to see new fuel for the misfiring innovation engine, even if it

increases the budget deficit. “Precisely now there must be substantial

investment in future energy management, not only with plans for the short

term like offshore wind farms, but also for the medium and long terms,”

they say. “Together with the business community and knowledge institu-

tions, the government must conduct an incisive and innovating industry

policy. This is exactly the time to invest in a sustainable knowledge eco-

nomy, to allocate extra money for research and to accelerate innovation:

invest in a large research infrastructure and assign supernumerary know-

ledge workers to research and knowledge institutions. Investing wisely

now - if necessary at the expense of a budget deficit - will save a lot of

money later on.”

The business as usual scenario, the Dutch inclination towards consul-

tation and consensus, no longer works according to the ECN board. “We

must now invest anti-cyclically to keep people at work and speed up

long-term investments to create new technology. The risk of a ‘lock-in

effect’, i.e. that we keep using today’s technology because of the crisis,

is all too real. For the energy system of the future we need future tech-

nology, and that requires considerable boldness on the part of the

government, similar to the rescue operations of the Minister of Finance

for the national banking sector. Otherwise Dutch energy research will be

overtaken left and right.”

“The money is there already. The implementation of the FES funds in

particular can be accelerated. Completion of FES procedures has taken

at least two years in recent years. That is too long. Let the money work

today so that we can reap the benefits tomorrow, as well as the day after.

The preparation and approval of ADEM (see under ‘Deepening know-

ledge’ – ed.) has had a long lead time, so it is now important to let ADEM

mature quickly. The same applies to the ECN proposal for a second-

generation laboratory for photovoltaic solar cells, which all advisory

bodies said was of exceptionally good or excellent scientific quality. An

accelerated awarding of FES funds for the creation of this new national

laboratory would certainly contribute to a national Green New Deal.”

‘ New fuel for misfiring innovation engine’

Gerald Santing

Director

Ton Hoff

Chairman of the Board of Directors

Kees van der Klein

Director

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In 2008, ECN evaluated and adjusted its 2006-2010 strategic plan in the

interim. Four subjects will be very important in the coming years: the

international positioning of ECN, the transfer of technology to the busi-

ness community, relationships with universities and people management.

International cooperationFor some time now it has been ECN’s ambition to develop into a leading

research institute in Europe and possibly the world. A number of respec-

ted research institutes in the United States were visited in 2008 to

establish and renew contacts in the expectation that cooperation should

be possible in numerous areas of research. Hoff: “The expectations were

certainly met. We made an agreement with the Department of Energy

(DoE) to seriously examine whether we can step up cooperation in vari-

ous fields. Similarly, we found that good, concrete stepping-stones

existed for cooperation in energy research at the National Renewable

Energy Laboratory (wind, solar, biomass and policy studies) and Stanford

University (materials research).”

ECN is one of the driving forces behind the European Energy Research

Alliance (EERA) founded in 2008. The main goals of this group of leading

energy research institutions - which together possess an annual R&D

budget of around €1.3 billion – are to speed up the development and the

introduction of new energy technologies. The institutions intend to do so

by streamlining national research programmes and avoiding fragmen-

tation, among other things by jointly developing and using state-of-the-art

research facilities. Hoff, who has been appointed chairman of EERA, says:

“In this first phase the EERA partners have selected several fields that

must lead to joint research programmes. They include wind and solar

energy, biofuels, CO2 capture and storage, intelligent grids and fuel cells.”

Whereas EERA represents the wider European dimension, PETRA (Petten

Energy Technology Research Alliance) is a local initiative. Three research

institutions in Petten (ECN, NRG and JRC-IE, the Joint Research Centre

of the European Commission) are going to cooperate more intensively to

make the Dutch town Europe’s energy research capital. Van der Klein:

“Many informal ties already exist between JRC-IE, NRG and ECN, both in

policy-supporting research and in the development of technology.

Strengthening these ties will allow the three institutions to enhance ful-

filment of their mission in Europe, namely to support European government

policy through research and technology development and to speed up

the transition to sustainable energy systems.”

Technology transferIn 2008, ECN has again worked hard on the development of sustainable

energy technology and its transfer to the market. The twin recurring

themes in the chapters about the units are intensifying contacts and

cooperation with universities on the one hand and expanding and inten-

sifying cooperation with industrial parties on the other. In terms of

technology transfer, the year under review saw another increase in

co operation with national and international market parties, resulting in a

substantial boost of income from licensing agreements, participating

interests, joint ventures and contract research. For the first time ever

ECN’s licensing income topped €1 million in 2008.

Van der Klein: “The most direct way of bringing knowledge to the market

is by cooperating closely with industry and going forward to conduct

contract research. All units devoted a lot of attention to this matter in

2008. The BCE unit is cooperating closely with a leading Dutch utility

company so as to create a demonstration project to produce Green Gas

(SNG) from biomass on a large scale. The objective is to build a demon-

stration plant of approximately 50 MW as a first step towards the

commercial use of the Green Gas technology of ECN. Additionally we

signed a number of licensing agreements for advanced solar cells and

module technology. The Stirling technology research group of ECN was

taken over by Enatec, thus increasing Enatec’s responsiveness and taking

a new step towards the market introduction of the micro-CHP technology

developed by ECN.

The Wind unit concluded new cooperation contracts with the wind indu-

stry in 2008 partly due to the ECN Wind Turbine Test Farm at Wieringermeer

(EWTW). The unit also made preparations for an Industrial Support Group

that will concentrate on transferring knowledge and technology from the

Wind research groups to the industry.”

Deepening knowledgeECN’s commercial activities continue to stem from its research, in which

we pursue constant high quality. While ECN needs to operate close to the

market, it must also remain close to fundamental research. Hoff: “The

long-term programmes - which map out the broad lines of ECN’s research

for four years up to 2010 - guarantee the continuity and quality of our

research and ECN is on schedule with formulating a new long-term pro-

gramme. Where possible we seek intensive cooperation with universities

and endeavour to recruit young, talented researchers.”

In late 2008, the ADEM initiative of ECN and the three technological

universities in the Netherlands resulted in the awarding of € 30 million

for materials research in energy technology, followed by the definitive

green light early 2009. That is good news given ECN’s ambition to struc-

turally reinforce our ties with the universities, says Van der Klein. “With

half of that money we can appoint and train thirty young researchers

(doctoral candidates – ed.) for four years. Five will work in Petten on their

theses, the other twenty-five will work at the technological universities on

ECN-related research. This means new people plus new knowledge and

structural cooperation with research groups at the universities. The other

half of the money is intended for the purchase of new research equipment.

This will enable ADEM to develop into a powerful accelerator and driver

of the development and use of energy technology in the Netherlands.”

Ties were reinforced in 2008 with the universities of Groningen (gas

transition), Wageningen (environmental pollution and environmental geo-

chemistry) and Amsterdam (VU University, environmental research). ECN

further signed a cooperation agreement with the Holst Centre in

Eindhoven, an open innovation centre established by TNO and the Flemish

organisation IMEC. The objective is to enable a switch to large-scale

production methods for solar cells, with the prospect of having the tech-

nology ready within about five years for use in small consumer products,

for example.

10 11

Another milestone was the opening in Wieringermeer of a scale farm that

has strengthened ECN’s position among the world’s top in wind energy

research. Hoff: “The questions our research at the scale farm must ans-

wer how wind turbines in large wind farms react to each other. Similarly,

the start-up of the MILENA biomass gasifier, opened by Minister Cramer

in September 2008, represents a significant step forwards towards

sustainability. The same applies to the PowerMatcher developed by ECN

- an application of advanced ICT in the electricity grid - that more effi-

ciently matches electricity demand and supply.”

PositioningECN obviously operates in a challenging and dynamic environment. In this

European playing field ECN wants to develop further into an authoritative

European energy research institution. Hoff: “To support that positioning

we must naturally come up with high-quality research results, but we also

need to devote a lot more attention to communicating the results. With

this in mind ECN has developed an active media policy, with scope for a

proactive approach designed to put matters on the agenda when there

is a need to do so. This includes the press lunches that ECN started in

December 2008 to explain to journalists the background to energy news.

ECN explains developments at national and international level, which fits

in well in the leading role that I believe ECN must fulfil in the international

debate on energy and climate. The first press lunch dealt with Barack

Obama’s influence on international climate policy and the climate negoti-

ations in Poznan. The second press lunch took place in March 2009 and

addressed questions concerning CO2 storage and capture. Both press

lunches clearly met a need that exists among the media.”

Personnel and safetyPeople management is part of ECN’s strategic plan. Three human resour-

ces projects designed to bring talent within ECN to full maturity got

underway in 2008 - Job Descriptions, Competence Management and the

Job Appraisal & Performance System. All positions were subsequently

evaluated in the second half of 2008. Santing: “A closely-related subject

is the development of a modern remuneration policy in step with market

norms. The benchmark of our primary and secondary conditions of

employment compared with those of other market parties provided a

good basis. There will be greater scope for rewarding employees’ special

capabilities and performance, both prominent matters in negotiations

with the works council and unions on a new collective labour agreement.”

Significant progress was made in 2008 on strengthening the internal

research infrastructure. The new laboratories in Building 31 were delive-

red after a long period of preparation and can soon be used, which will

undoubtedly have a positive effect on the responsiveness of ECN’s

research and the development of high-quality technology. The legal

structuring of ECN and its subsidiary NRG - which was going to be

changed to a holding company with two foundations operating indepen-

dently yet in tandem - has been shelved pending developments related

to the High Flux Reactor of NRG.

The year under review was a very stirring one for NRG (Nuclear Research

and Consultancy Group). It was a year that saw the firming up of strategy

for the future, but also the temporary shutdown of the High Flux Reactor

on account of an irregularity in the primary cooling water system. The

decision not to start up obviously had a considerable impact. The impact

was financial as well as social - the High Flux Reactor produces medical

isotopes that meet 30% of global demand and 60% of European demand.

The shutdown of the HFR, which restarted March 2009, pushed down

ECN’s financial results. On the other hand, the evolving public debate on

nuclear energy means that NRG has very good prospects in various fields.

A good example is the research into the recycling and final storage of

radioactive waste. The consultancy arm of NRG developed excellently.

ECN’s pursuit of even better control of safety, health and environmental

risks received an extra stimulus in 2008 through the awarding of the

OHSAS 18001 certificate: the international management system for safety

& health. Audits made clear that ECN unquestionably deserves this cer-

tificate. In 2008 there were no accidents that caused sick leave. This

brings the five-year average close to the (provisional) target of 0.8%.

While this figure is reason for satisfaction, the further reduction of the sick

leave rate will remain the core of ECN’s safety policy in the coming years.

SummaryAlthough the 2008 financial result was mediocre, the board is very satis-

fied with the progress made in the long-term programmes, the greater

involvement of commercial parties, the growth in the number of patents

and licensing agreements and the greater number of energy technologies

brought to the market. This is thanks in part to the commitment and

motivation of ECN employees. The board thanks them for their efforts and

looks forward confidently to the future.

Ton Hoff, Chairman of the Board of Directors

Kees van der Klein, Director

Gerald Santing, Director

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‘ It is promising that making energy systems more sustainable is receiving greater attention’ Policy Studies Remko Ybema, unit manager

“One of the highlights of 2008 for me was the Energy and Climate Package of the European Commission that the European heads of state and

European Parliament approved in December with only a few changes. Environmental organisations that said that by adopting the agreed package

European leaders had ‘turned their back’ on global climate efforts have underestimated its historical significance.

The increasing attention for making energy systems more sustainable is promising. You see that more and more companies are focusing on this subject

and putting forward initiatives. Members of the public also attach increasing importance to it. Something that will greatly influence this process will be the

policy of Barack Obama, who will vigorously pursue cleaner energy usage. For him the economic crisis is an opportunity to give a substantial boost

to wind energy, solar energy, clean coal and clean transport. I hope and expect that the US administration will succeed in developing a resolute policy

and can speed up the move towards sustainability. In 2008, the Dutch government pressed ahead with national energy and climate ambitions.”

“In 2008, the Policy Studies unit contributed substantially to energy and

climate policies by independently conducting research and advising both

companies and authorities. The unit received numerous contracts from the

European Commission (EC). In recent years Policy Studies has developed

roadmaps for the European Commission for the use of hydrogen and bio-

fuels in the European transport sector, with a substantial role for biofuels

in 2030 through the HYWAYS and REFUEL projects. REFUEL (Renewable

Fuels for Europe) has produced a roadmap for the first and second gene-

rations of biofuels, including a vision on the European potential for biomass,

based on acreage in eastern Europe and scenarios for increased agricultu-

ral production. REFUEL presented a balanced vision amidst the robust

biofuels debate in 2008. The vision boils down to our having to continue

using and developing the first-generation biofuels, and in particular that we

must make sure that the second-generation materialises.

The global dimension can be found in the substantive contribution made

by Policy Studies to the Poznan Climate Summit in December 2008. This

fourteenth ‘Conference of the Parties’ was a stopover towards the climate

conference in Copenhagen in December 2009. ECN attended the confe-

rence as a ‘Research and Independent Non-Governmental Organisation’.

ECN employees made contributions to subjects including the discussion

about post-2012 issues, technology transfer and financing, the Clean

Development Mechanism and CO2 capture and storage.

Nationally, Policy Studies is an important adviser to the authorities in The

Hague. For the Ministry of Economic Affairs, we determined the costs of

sustainable energy system options in cooperation with KEMA. This was

used as input for the Sustainable Energy Production Stimulation (SDE)

scheme that came into effect on 1 April 2008. The Fraunhofer Institute

examined our working method and decided it was sound. For evaluation

of the Clean and Efficient programme, the government intends to evaluate

the policy before August 2010 and plan new prospects. To this end the

unit is working together with the Netherlands Environmental Assessment

Agency (PBL) on revising the reference projections. They will be publis-

hed early 2009. In autumn 2008 ECN and PBL published some provisional

figures about the effects of Clean and Efficient at the request of the

Ministry of Housing, Spatial Planning and the Environment.

EvaluationInterest in monitoring and evaluation studies increased in 2008, among

other things because of the European energy efficiency directives and the

outcomes of the G8 summit at Gleneagles in 2005. In cooperation with

SenterNovem, the unit made major strides for the Ministry of Economic

Affairs in the development of a monitoring and evaluation system for

energy efficiency and conservation. Scenario analysis models were used

to examine to what extent past energy trends can be simulated and

explained.

The Policy Studies unit is evaluating a tightening up of the building regu-

lations for new dwellings (EPC) for the Ministry of Housing, Spatial

Planning and the Environment. The experiences of market parties were

inventoried by means of interviews. Additionally, a survey was conducted

among residents of new dwellings about their heating and showering

patterns, their health perceptions and their experiences with the home

ventilation system. Meter readings are taken periodically. The purpose of

this evaluation study is to find out whether the new dwellings are as

energy-efficient as may be expected and to provide insight into the poten-

tial effects on the health of the occupants.

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The unit developed a policy-supporting tool for the international

HYLIGHTS project. The tool compares different vehicle technologies with

respect to price per kilometre and analyses how the various fiscal incen-

tives influence costs. For the Ministry of Housing, Spatial Planning and

the Environment and the Ministry of Transport, Public Works and Water

Management, Policy Studies developed scenarios for the introduction of

electric and plug-in hybrid vehicles. The scenario showed that the reduc-

tion of CO2 emissions depends greatly on how electricity is generated,

which is related to the time of charging. The same conclusion applies to

the introduction of hydrogen as an energy carrier, leaving aside the need

to build all production capacity from scratch. The unit also examined an

operational concept for electric driving on behalf of the Ministry of

Housing, Spatial Planning and the Environment.”

Top five of 20081. Requests for advice increased by 10% compared with 2007;

2. Substantial contribution made to Poznan climate conference;

3. Roadmaps developed for the use of biofuels in the European trans-

port sector;

4. Input provided for SDE scheme commissioned by the Ministry of

Economic Affairs;

5. Robust innovation routes mapped out for the transport sector

(Ministry of Housing, Spatial Planning and the Environment/

Ministry of Transport, Public Works and Water Management).

‘ ECN is our premier supplier of data on sustainable energy’

“Policy Studies carries out numerous projects for the Ministry of Economic

Affairs, but the most high profile one at present is SDE, the Sustainable

Energy Production Stimulation scheme. It is one of the Dutch government’s

most important tools in the ‘Clean and Economical’ programme. SDE is a

subsidy scheme for companies and private individuals who want to invest

in sustainable energy. The scheme provides for reimbursement to the

enterprise of the ‘financial gap’ of such an investment, i.e. the price diffe-

rence between producing green and grey energy. Each year Policy Studies

calculates this factor for the different types of sustainable energy covered

by the scheme. Solid calculations are hugely important to the success of

the scheme. A financial gap calculated too high would mean that the

government would contribute too much to sustainable projects. A calcula-

tion that is too low would mean that enterprises would be unable to make

the investment. Both situations are undesirable. Therefore, it is very impor-

tant for the calculations to be made by an organisation like ECN that

possesses sufficient know-how and skills.

Policy Studies generally supports the Ministry of Economic Affairs in imple-

menting and monitoring energy policy and it does so adequately. The

quality of staff is high and they are very motivated to deliver good results.

A sign of professionalism is that Policy Studies continuously examines its

own functioning critically. In consultation with the Ministry of Economic

Affairs it was decided, for example, to have the SDE calculations reviewed

by an independent third party, the German Fraunhofer research institute.

It is nice to see that Policy Studies can move in step with us when time starts

to press for political reasons. There is a shifting of activities so that the right

quality can nevertheless be delivered on time. Policy Studies is our premier

supplier of sustainable energy data. Given the government’s ambitions for

sustainable energy, it is important for the future that Policy Studies will

continue to sketch good scenarios to monitor feasibility of policy objectives.

This requires good people, good scenarios and good data. ECN will be able

to continue playing an important role on the road towards the sustainable

energy objectives for 2020. In 2010 there will be an interim evaluation of the

‘Clean and Efficient’ programme. If the results turn out to be disappointing,

it will be up to Dutch government to consider possible additional measures

and their effects. Policy Studies can play a key role in designing these

measures by calculating their effects quantitatively and objectively.”

Eric Eijkelberg (Deputy Director of Energy and Sustainability at the

Ministry of Economic Affairs)

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‘ European objectives are unachievable without sustainable use of biomass as an energy source’ Biomass, Coal & Environmental Research Jan Willem Erisman, unit manager

“Brussels is aiming high with its climate and energy package. All sustainable energy options will be needed to achieve the European objectives,

including sustainable use of biomass as an energy source. It is good that the European Commission is aiming to formulate sustainability criteria

for biofuels, because it will obviate the need for discussion about the greenhouse gas balance or potential competition with food supplies. Biofuels

are usable in the same way as fossil fuels. Therefore, they are usable relatively quickly as an important sustainable source for green gas, electri-

city, heating and transport, and as a green raw material for the chemical industry, with highly promising possibilities for limiting emissions of

greenhouse gases. The Biomass, Coal & Environmental Research (BCE) unit marketed some important second-generation technologies in

2008, bringing the production and use of truly sustainable biofuels like ‘green gas’ and biomass pellets a lot closer. The development towards use

of biomass that does not compete with food supplies will continue worldwide. There is still a lot to discover for the new generation of biofuels.

The unit can make a valuable contribution in this field. We possess the ideal combination of knowledge and technology for producing

biofuels, computing environmental effects and developing sustainability criteria.”

“The Biomass, Coal and Environmental Research (BCE) unit has two pro-

grammes, ‘Biomass and Coal’ and ‘Environmental Research’. Within the two

programmes we do not only conduct scientific research, we also develop

and implement market-focused technology. The unit has also developed a

programme for research into the different aspects that play a role in the

sustainable use of biomass. We are further examining seaweeds as an

alternative to land-based biomass.

The planned agreement with a Dutch sustainable energy company for

construction of the first torrefaction demonstration plant is important to the

unit. Torrefaction, a kind of coffee-burning process, processes materials

like wood or straw so as to create biomass pellets with a high energy den-

sity and very good storage and transport properties. The demonstration

plant will produce these biomass pellets on a commercial scale and they

will immediately be usable in conversion installations. The development of

torrefaction is thus extremely important to the use of sustainable biomass

in energy systems. The unit has built its own pilot plant on the ECN site.

The plant is capable of processing seven tons of biomass each year.

MILENA is a gasification technology that will also be marketed a few years

from now. Early September 2008, Jacqueline Cramer, the Minister of

Housing, Spatial Planning and the Environment, checked the MILENA

biomass gasifier at the ECN site against her own sustainability criteria when

she officially opened the plant. The plant satisfied all her criteria. The plant

forms the basis for the production of green gas, also called Substitute

Natural Gas (SNG). Green gas can be mixed into the gas grid or used as a

sustainable biofuel, for example in gas-powered vehicles. Together with the

OLGA technology (for the removal of tar, ed.), MILENA plays an important

role in plans of the New Gas Platform, which is aiming for a share of 50%

green gas in 2050. A project was started with a leading Dutch utility in 2008

to demonstrate this technology.

The ground these two processing technologies are gaining is evident from the

fact that the unit presented torrefaction and MILENA as two examples of

successful Dutch technology developments at the Poznan climate conference

in December 2008 at the invitation of the Ministry of Housing, Spatial Planning

and the Environment.

The Labscale Combustion Simulator (LCS) for characterising the combus-

tion and gasification properties of biomass was modified and used to

support industry in 2008. The LCS provides a wealth of information about

the combustion and gasification properties of different biomass and about

pollution behaviour in the conversion processes. An oil company commis-

sioned the unit to develop a setup that converts the synthetic gas obtained

from coal gasification into liquid transport fuel. In 2009 this test facility will

make an important contribution to developing the technology for the

second generation of transport fuels.

18 19

Technology transferThe BCE unit has licensed two patents for removal of N2O from fluegas of nitric

acid factories to CRI/Shell. The Kyoto Protocol names N2O (‘laughing gas’) as

an important greenhouse gas. The greenhouse effect of this gas is 310 times

greater than that of CO2. That is why the relatively small emissions of N2O

account for relatively large part of the total intensified greenhouse effect: an

estimated 5% comes from emissions of this gas. CRI has given a commitment

to market the technology worldwide, an effort likely to involve a few million

euros. In all probability the first plant will be equipped commercially with this

technology in 2009.

Rohasys, a Dutch SME, has been licensed for four setups for simulation of the

leaching of contaminated substances in building materials into ground water

and surface water. The first products are expected to be sold in 2009. This

development will enable the standardisation and widespread use of the lea-

ching procedures being developed within ECN. Two other Dutch SMEs,

Dahlman and Applikon, have reported a strong increase in demand for the

OLGA and MARGA technologies licensed by ECN.

The scientific basis of the unit has been reinforced. The unit had 38 scientific

articles published in 2008, in journals including Nature Geoscience and

Science. The unit regularly engaged in the sustainability debate, among other

things by cooperating in a thematic column about biomass in Change

Magazine. A BCE researcher obtained a doctorate at Wageningen University

on a thesis about Characterisation of natural organic matter in relation to the

spread of contaminants in the environment. He demonstrated in his thesis that

natural humic and fulvic acids also occur in waste and greatly increase the

leaching of heavy metals like copper. This made him the third doctoral candi-

date at the Environmental Pollution Risk Assessment group within two years.

With a part-time professor in Environmental Geochemistry at Wageningen

University, the unit now has a very strong scientific basis for conducting

environmental research. One of the unit’s researchers obtained a doctorate

at Delft University of Technology for research into the reduction of particles

in exhaust gases of ships’ diesel engines.”

Top five of 20081. Torrefaction and MILENA, both important second-generation

technologies, reached the market;

2. ECN torrefaction pilot plant processed 7 tons of biomass;

3. Patents for neutralising N2O were licensed to CRI/Shell;

4. Rohasys was licensed for setups for simulation of leaching of

contaminated substances to ground water and surface water;

5. Scientific basis was strengthened by the doctoral research of

BCE researchers.

‘ Less distinction between fundamental and applied research’

“As researchers at VU University Amsterdam we cooperated intensively

with the Biomass, Coal & Environment unit in a European project that

measured CO2 concentrations in the atmosphere. The cooperation was

so good that it was carried forward into a new European project. We also

jointly carried out a Dutch project about the carbon cycle.

The traditional relationship between a university and a knowledge insti-

tution is that the university does the purely scientific work while the

knowledge institution concentrates on applied scientific research. But the

dividing line between fundamental and applied research is blurring a little.

There is obviously a difference because of the university’s educational

function. Some of our graduates work at ECN and some ECN employees

work and do their doctoral theses with us. This cooperation will be further

strengthened by the appointment of a professor occupying an endowed

chair at the VU Amsterdam, funded by ECN, for one day per week.

Another example of a large joint project concerns emissions of methane

and laughing gas. ECN owns a high mast in Cabauw with instruments that

measure the composition of the air. We try to couple these measurements

to emissions by means of modelling. This approach is successful because

there are now plans to carry out a similar project Europe-wide. Throughout

Europe in its entirety, we will create an infrastructure for measuring con-

centrations, together with major European research institutes. The

funding is still uncertain, but there is a project in acquisition under the

seventh framework programme. Within that programme BCE is perfor-

ming measurements and together we are providing the modelling.

We operate in a very large field of study. In our cooperation with BCE we

focus on the greenhouse gas balance in the atmosphere, devoting special

attention to laughing gas and methane. Two ECN employees are currently

doing their doctoral theses with us on measurements of fluxes of these

two gases and of CO2. The intention is for there to be even more joint

doctoral candidates in the near future.

Sometimes we notice that we would like to go even deeper but that BCE

lacks the opportunity to do so. We like to finish projects with a scientific

article, but ECN is a project-driven organisation that has to listen to what

its clients want - and when time is up or the client feels there is no need

for such a conclusion it does not happen. But apart from that our coope-

ration with ECN is highly satisfactory.”

Prof. dr. Han Dolman (Professor of Ecohydrology and Head of the Department

of Hydrology and Geo-Environmental Sciences, VU University Amsterdam)

19

20 21

‘ Energy efficiency and saving are essential for a sustainable energy system’ Efficiency & Infrastructure Peter Alderliesten, unit manager

“Efficiency & Infrastructure (E&I) is the new, concise name of the unit

created in 2008 through the merger of the Energy Efficiency in Industry unit

and the Energy in the Built Environment & Grids unit. Three programmes

are currently elaborated at Energy & Infrastructure: Intelligent Energy Grids,

Energy in the Built Environment and Energy Efficiency in Industry. One of

the common themes in these programmes is heat management, including

the storage of heat. Besides developing heat pumps we are working on the

storage and transmission of industrial or other residual heat. There will be

intensive work on this subject in the coming years, not only within the

ADEM programme of ECN and the three technological universities, but also

in the WAELS project, a collaboration of ECN, TNO and Eindhoven University

of Technology. The WAELS research has identified salt hydrates as a highly

promising material for seasonal heat storage in the built environment.

The development of the thermoacoustic heat pump reached a new mile-

stone in 2008. Together with two Dutch engineers, Bronswerk and Dahlman,

ECN is working on the development of a thermoacoustic system that uses

industrial residual heat as driving force. In this instance the mechanical

power produced consists of a very powerful noise wave. The noise pro-

duced is subsequently used to upgrade another part of the system residual

heat into usable heat. This allows you to make purposeful use of otherwise

useless residual heat for industrial processes. Industry stands for the chal-

lenge to make big savings on energy consumption and this technology will

certainly help.

Using the thermoacoustic heat engine we achieved a conversion efficiency

of 48% of maximum possible efficiency, a world record. The record was an

important milestone towards the conversion efficiencies necessary to cre-

ate a viable system. We have applied for a patent for multistage

thermoacoustic heat pumps in which each stage uses the same acoustical

impedance.

E&I also develops thermochemical heat pumps. For a large carmaker we

developed a heat-powered air-conditioner that uses engine heat to provide

in-car cooling. This ‘sorption cooler’ was then successfully built into one of

the carmaker’s cars. We are also working on and have already tested a

heat-powered air-conditioner for residential dwellings. The market has

expressed interest in it.

Within the Intelligent Energy Grids programme, the unit is focusing on

developing technology for the efficient harmonisation of supply and demand

of energy (electrical or otherwise). At present the balance between supply

and demand is still relatively easy to achieve. However, in the near future

consumers will make less use of mains electricity, because they will start

producing their own electricity. Moreover, more electric vehicles will be

introduced in the market. This may overload the electricity grid. A solution

is to make the grid more intelligent. We are establishing contacts in this field

with universities and with the market. Internationally, we are profiling our-

selves in the field of intelligent grids by participating in forums like the

European Smart Grid Platform.

“The ever-increasing energy prices in recent years have resulted in increased attention to energy saving and energy efficiency. The challenge is

to retain this attention to the demand side of energy system even with the current low energy prices. After all, without the efficient and effective

use of energy, a sustainable energy system will be an illusion and the ambitious targets of the European and national authorities will never be achieved.

The potential for energy saving and efficiency is great, but so are the scale and the complexity of the problem. The demand side affects all sectors

of society, there is not just one lead player. It is ultimately about how you can fulfil the need for heating, cooling, powering, climatising and lighting across

the entire chain with minimum use of scarce raw materials, fossil or other energy carriers and optimum use of the spatial and energy infrastructure;

in other words, how to limit losses and wastage. This reduces dependence on energy and increases possibilities for sustainably fulfilling the

demand for energy. System and process analyses within and overarching the sectors of the chain are essential to get a better insight into the loss

factors and to identify, prioritise and realise promising innovations that contribute maximally to the energy transition.”

22 23

Software technology that received much attention in 2008 was our

PowerMatcher. This smart software technology gears the actions of electri-

cal devices to each other and to the supply of electricity. It provides energy

producers with information about the time when the consumer needs elec-

tricity. The PowerMatcher determines automatically when the charger of an

electric car takes electricity from the grid, for example. It switches on the

charger only when it is most economical to do so. This regulates the energy

load of the grid so as to establish the most favourable possible total load.

It has brought a smart electricity grid another step closer.

We developed a third version of PowerMatcher in 2008, incorporating

a number of new functions. We will use this version in field experiments

and will shortly begin a commercialisation process. In the year under

review, we also built a prototype of the Virtual Synchronous Generator

(VSG). The purpose of the VSG is to compensate for fluctuations in future

energy grids by means of rotating mass. The VSG consists of a computer-

controlled 15 kW generator and a 6 kWh Li-ion storage system. We are able

to test the VSG using a bespoke experimental mini-grid.

Technology transferCompanies are showing more and more interest in ECN’s hybrid membra-

nes. A strategy was worked out in 2008 for using this technology widely in

the coming years under the name of Hybsi®, now registered as a brand

name. Trials have shown that the different types of hybrid membranes have

a large field of application.

ECN’s thin-film palladium membranes, developed for the separation of

hydrogen, are undergoing a similar development. We have worked out a

strategy for wide application of this membrane, under the registered brand

name of Hysep®. The interest of industry has resulted in paid contracts to

deliver membrane modules for separating hydrogen from a gas mixture.

One client wants to examine whether ECN’s Hysep® module technology is

suitable for a new and more efficient hydrogen production process for the

refining industry; another client is examining whether it can use the Hysep®

module technology for its reforming process to be marketed in 2010.”

Top five of 20081. Record efficiency in converting heat to sound in a thermoacoustic

heat engine;

2. Development of PowerMatcher, a smart software technology that

gears the use of electrical devices to the supply of electricity;

3. Highly promising market opportunities for Hybsi® and Hysep® mem-

branes;

4. Prototype of the Virtual Synchronous Generator (VSG) for limiting

fluctuations in future energy grids;

5. Marketing of Stirling micro-CHP system for combined generation of

electricity and heat in residential dwellings.

‘ From a technological point of view you need to use energy so efficiently that it renders collective heat transmission and distribution unnecessary’

“After my political career as a member of the South Holland Provincial

Executive I am now directing my efforts towards sustaining society. As

Innovation Manager of the Rotterdam Climate Initiative, I work mainly on

energy efficiency and sustainable raw materials and fuels. Two-thirds of

all energy used in the Netherlands is in the form of heat or is released as

residual heat. This makes it essential to direct attention towards the heat

sector in order to achieve a sustainable energy system. With its port and

industrial complex, Rotterdam is like one very large heat accumulator,

which explains why heat plays a major role in Rotterdam’s climate plans.

The E&I unit played a central role in preparing the WAVINED plan (an

acronym for Heat Supply in the Netherlands). The staff possesses an

excellent insight into available technologies and the potential role of

technology in supplying heat. You notice in talks with fellow engineers in

industry that they are highly respected for their knowledge and overview.

The ECN name is synonymous with quality. What’s more, it is my expe-

rience that they are highly dependable; they do what they promise.

Because of my administrative way of looking at things, I sometimes feel

that in their enthusiasm E&I people become too bogged down in the

technology. I then think to myself: with a little more feeling for administra-

tive reality you could achieve even more. The talks I have with E&I

employees often boil down to the usefulness of heating grids.

From a purely scientific and technological point of view, you have to use

energy so efficiently that it renders collective heat transmission and dis-

tribution unnecessary. A heating grid would then obstruct the continuing

efficiency improvement. But when I see that a ‘passive house’ costs

between € 20,000 to € 30,000 extra and a heating connection € 4,000

to € 5,000, I would prefer to install a heating grid for the time being.

That does not alter the fact that I can always approach ECN if I have

questions about sustainability and that the researchers always provide

adequate information. But I would like to see ECN give even higher prio-

rity to energy efficiency. Sometimes I get the impression that it is treated

as a changeling, even though it is the first and most logical step towards

achieving a sustainable energy system. I also something think: don’t bury

the strategically strongest people with management duties. In Rotterdam

we call them ‘urban marines’: we don’t deploy people with a strategic

overview in management, but at the heart of society. From there they

carry out changes.”

George Brouwer (consultant to the Board of Governors of Rotterdam

University, and Innovation Manager at the Rotterdam Climate Initiative) 23

24 25

‘ CO2 capture and storage enables the responsible use of large reserves of coal and natural gas for the production of electricity and transport fuels’ Hydrogen & Clean Fossil Fuels Frank de Bruijn, unit manager

“Hydrogen & Clean Fossil Fuels is pursuing technologies that enable high-

efficiency CO2 capture and also production of hydrogen-rich gas. This gas

is suitable for producing electricity in large power plants, or for use as

transport fuel, preferably in combination with fuel cell systems. In the last

quarter of 2008 the first experiments were carried out on the Sorption-

Enhanced Water Gas Shift (SEWGS) plant of ECN. The SEWGS trial plant

converts carbon monoxide and steam into hydrogen and CO2, after which

the CO2 is captured and can be stored underground if desired. Initially the

plant will be used to test and scale up the SEWGS technology. In the near

future we will use the SEWGS plant to simulate the purification of hydrogen

produced from coal gasifiers. With this hydrogen we will then be able to

produce electricity. These technologies are attractive for industrial proces-

ses that use hydrogen on a large scale, as in the refining of crude oil, the

manufacture of chemicals and fuel cells for use in the transport sector.

The CATO-1 project funded under the Knowledge Infrastructure

Investments Decree (Bsik) stopped at year-end 2008. The project was

focussing on developing knowledge and technology regarding CO2 cap-

ture and storage (CCS). Through CATO-1, ECN obtained unique test

setups for pre-combustion capture technology (CO2 capture for combu-

stion) and for developing oxyfuel technology (the burning of fuels with

pure oxygen). These now play a major role in European projects and

illustrate the importance of CATO-1 to the Dutch research infrastructure.

In successor CATO-2, in which we focus on the pre-combustion and

oxyfuel technology, ECN will use the same test setups to develop second-

generation pre-combustion capture technology.

The unit is also involved in Nuon’s ‘CO2 Catch-up’ initiative for small-scale

demonstration projects for CO2 capture in the Integrated Gasification

Combined Cycle (IGCC) station at Buggenum, and is active in other initia-

tives for pre-combustion capture technology. Something worth mentioning

is that the eight oil companies that are cooperating in the CCS field have

invited the unit to submit proposals for research, technology development

and trial plants for pre-combustion capture technology.

Technology transferECN’s spin-off company, SulphCatch, signed an agreement with HyGear

in 2008. SulphCatch will now become the most important supplier of

sulphur-removing adsorbents for HyGear’s hydrogen production units.

The adsor bents of SulphCatch have considerable adsorption capacity

according to HyGear.

European cooperation in the field of hydrogen and fuel cells entered a new

phase in 2008. A noteworthy event was the establishment of N.ERGHY

(European Grouping on Hydrogen and Fuel Cells) in March. N.ERGHY is a

European initiative in which fifty leading universities and knowledge institu-

tions are participating, including ECN. ECN is one of the parties behind the

initiative to establish the group that is participating in the Joint Technology

Initiative (JTI), a public-private partnership that under the EU banner is

bundling research, technology development and demonstrations in the field

of hydrogen and fuel cells so as to get innovations to the market quickly. The

technology for fuel cells must be ready for market introduction in 2015.

The Netherlands is one of the countries where the developments are pro-

mising. We are involved in the major Hydrogen Region programme in the

south of the Netherlands and Flanders for the purpose of starting up hydro-

gen applications and infrastructure.

“There are many initiatives focusing on using technologies for CO2 capture, hydrogen and fuel cells. Thy Hydrogen & Clean Fossil Fuels unit is keen

to join these initiatives, as time is running out. We must abandon the linear innovation model in which the technology is first optimized completely

in the lab and only then go into the field for trials with the knowledge we have acquired. By letting these phases partially overlap, we can adapt the

development of new technology at an early stage to practical conditions and also save time. A very serious option is undoubtedly the capture

and underground storage of CO2. This makes it possible to use fossil fuels in the longer term as well, while simultaneously reducing CO2 emissions into

the atmosphere. Numerous recent energy scenarios, of parties like the International Energy Agency, show that we cannot do without this option. For its

research into usable hydrogen technology and CO2 capture, Hydrogen & Clean Fossil Fuels is keen to set up cooperation with other research

institutions and with companies. The trend is clear: industry, government and knowledge institutions are joining forces to tackle the complex

transitions jointly. I am convinced that this approach will yield results.”

26 27

Additionally a first step was taken towards establishing the Dutch

Hydrogen Coalition DutchHy in 2008. On 20 November, twelve parties,

including ECN, signed a letter of intent for this purpose. Besides the cities

of Amsterdam, Rotterdam and Arnhem, the participants include compa-

nies like Air Products, Linde, Shell, Nedstack, Plugpower, Hygear, VDL

APTS and HyTruck. The objective is to bring about acceleration of the

introduction of hydrogen in the Dutch energy system. The coalition advo-

cates setting up a national hydrogen programme with an envisaged

budget of € 80-90 million.”

Top five of 20081. First experiments with SEWGS plant (hydrogen production and

CO2 capture);

2. Establishment of N.ERGHY/JTI, bundling research, technology

development and demonstrations in the field of hydrogen and

fuel cells;

3. World record performance Solid Oxide Fuel Cell at 600 °C;

4. Reduction of platinum use in PEMFC by half without compromi-

sing performance;

5. Development of pre-combustion capture technology in CATO-2.

‘ Wind energy is going to make a big contribution to the objective of getting about 20% of energy consumption from sustainable sources in 2020’ Wind Energy Theo de Lange, unit manager

‘ For us the benefit of cooperating with ECN lies mainly in the independent way that ECN looks at new technologies’

“At Nuon we deal with the Hydrogen and Clean Fossil Fuels unit mainly for

the development of fuel cells and the capture and storage of CO2. We also

work with other units in fields like torrefaction and the production of syn-

thetic gas from biomass. For us the benefit of cooperating lies mainly in the

independent way that ECN looks at new technologies. At ECN we get a

good expert judgement plus excellent access to technological knowledge.

For fuel cells our first contacts date from the premature phase, when we

were checking out possibilities in this field, and Hydrogen & Clean Fossil

Fuels gave us excellent feedback about the choice of development routes.

The unit was not subsequently involved in the trials that we set up, but later

we did make very grateful use of their knowledge when evaluating the

trials. Our research into CO2 capture and storage (CCS) took place in a

similar way. Initially, Hydrogen & Clean Fossil Fuels acted as a sounding

board for us: in this phase we opted for pre-combustion removal of CO2

and the unit supported us in selecting the best technologies. Now that we

are far advanced with our trials in the CO2 Catch-up project in Buggenum,

Hydrogen & Clean Fossil Fuels is again a valued sounding board in their

evaluation. The same holds for the incorporation of the results of the trials

in the design of our Magnum station.

We are now going to build a trial plant for the real-life capture of CO2 and

ECN is involved in the work. We have become smarter and so has ECN:

together we can benefit from the hands-on knowledge that this trial will

yield.

We have a very good understanding with ECN. It is a pleasant organisation

to cooperate with. Very good technologists work there and in the market

ECN is a much sought-after knowledge institution, among other things in

the role of sounding board. Ideally we would like to work with the same

person in a project from start to finish, although we do recognise that with

a large organisation this is not always possible.”

Robert de Kler (Head of Technology and Engineering Services of Nuon)

“In the short to medium term, wind energy remains one of the key options for cheap, large-scale and sustainable production of electricity. Wind energy

is going to make a big contribution to the objective of the Dutch government to get about 20% of energy consumption from sustainable sources

as early as in 2020. But in the longer term, too, wind energy will play a big role. In the Netherlands we have a favourable combination of a lot of wind, the

proximity of the relatively shallow North Sea and considerable knowledge and experience of maritime technologies and wind energy. What’s more, there

has been a revival of the wind industry in the Netherlands. Various onshore and offshore turbines are being developed in our country and large wind

energy companies have intensified their activities. This offers great opportunities for the Wind Energy unit to build up a strong position. The effect of

the current economic crisis on the wind energy sector is difficult to predict. But I am confident that precisely this sector - as part of a new economic

course - will emerge stronger from the crisis. The Wind Energy unit can make a major contribution.”

26

28 29

“Our research activities increased again in 2008 and we are increasingly

working together with both universities and industrial parties. Our wind

test field and the rotor and materials test facility of WMC have shown to

be of great value. To put more structure into our market-related activities,

we have established an Industrial Support Group. The group will work

specifically on transferring to industry the knowledge and technology

obtained from the unit’s long-term research.”

“In 2008, research at the Wind Energy unit focused on subjects such as

calculations for the design of wind turbines. Enormous cost and time

savings are achievable in the design phase, the path from idea to product.

You need in-depth knowledge of the aerodynamics and constructional

dynamics of wind turbines. It is important to be able to predict properly

the interaction between wind, waves and turbine to enable us to design

efficient turbines that are well controllable under all operational conditi-

ons. Something else that is obviously important is for the turbine to

produce as much energy as possible over its full service life of about

twenty years. Condition monitoring systems and optimum strategies for

maintenance and operation are indispensable. This is another field in

which Wind Energy occupied a prominent position internationally in 2008.

The slowdown that occurred in 2007 in research into blade monitoring has

largely been made up and the proposed research into the flight leader

concept is now underway. This concept will enable us, using the extensive

monitoring of a small number of turbines in an offshore wind farm, to predict

the mechanical and fatigue loads on all turbines in the farm. In cooperation

with some industrial partners and as part of a major European project, we

set up a new R&D activity in 2008, aimed at finding solutions to problems

that frequently occur in gearboxes and other drive train components. The

research includes a very extensive measurement programme so as to

determine the loads that occur in practice.

A research field gaining in importance is farm aerodynamics. The objec-

tive is to optimise the energy yield of a complete wind farm instead of

doing so for each individual wind turbine. ECN holds various patents on

control strategies for wind farms and wants to test them in practice. This

is being done in Wieringermeer on our own test farm. The official opening

of the ‘scaled wind farm’ took place there on 5 September. The scaled

wind farm consists of ten wind turbines, ten small test masts and four

large test masts. This experimental wind farm, visited in December by

Maria van der Hoeven, Minister of Economic Affairs, is unique in that

information about the performance of the turbines located at the upwind

side of the farm is used to adjust the other turbines and vice versa. It is

possible to change the pitch-angle of the rotor blades, the yaw angle and

the rotational speed of these turbines. By identifying the air flow through

the wind farm we can develop control strategies and test them so as to

increase the electricity production of an entire wind farm. It is an essential

addition to the development of computational models that the unit has

been doing for many years. So the scaled wind farm enables ECN to

strengthen considerably its position among the world’s top in wind energy

research. Although the start-up of the scaled wind farm was delayed due

to technical problems, we have made important steps forwards in our

research into wind farm aerodynamics.

The importance of the activities of the Wind Energy unit is evident from the

big participation in the second Dutch Wind R&D Workshops that the unit

organised in cooperation with the Delft University of Technology, WMC and

SenterNovem. The number of published scientific articles, which received

greater attention in 2008, came to four. A special activity in 2008 was the

Aeolus Wind Race. In the race near Den Helder the ECN wind racer-

powered by a wind turbine rotor-achieved an average speed of almost

25 km per hour and came second in a race straight into the wind.

Technology transfer“A number of R&D activities in the field of aeroelasticity are now in the

final phase. They include research into a new aerodynamics module that

can be connected to existing commercial design software, and the inte-

gral wind turbine design package called Focus, which is a co-development

with WMC, for which a new version has been issued.

The unit decided in 2008 to develop new rotor aerodynamics activities.

Together with a number of Dutch universities and the Center for

Mathematics and Computer Science, we have embarked on a highly

promising long-term R&D path, in which Computational Fluid Dynamics

is being used to design better wind turbine rotors. An important success

was the sale of licences for the Control Design Tool and the delivery of

wind turbine control algorithms to various wind turbine manufacturers in

the Netherlands and other countries. The industry has a lot of interest for

the possibility of using this tool to control the wind turbine in a way that

increases its energy yield and makes it better suited to extreme situations,

like emergency stops. There is also considerable interest in our work on

system identification, which in simple terms involves giving the turbine

controller a self-learning capability.”

Top five of 20081. Opening of ECN scaled wind farm for validation of new control

strategies for wind farms;

2. New R&D activity: measurement programme on wind turbine

drive train components (including gearboxes);

3. Record sale of licences for design software and O&M software;

4. Successful Dutch Wind R&D Workshops;

5. Establishment of Industrial Support Group.

30 31

‘ Our work basically consists of simultaneously solving puzzles in various specialised fields’

“AE-Rotor is part of Suzlon and designs rotors. Production takes place in

India, China and the United States, while most product development

occurs in the Netherlands and Germany. In Baroda (Vadodera) in India

the company makes moulds in the designed aerodynamic shape. By

means of the moulds it is possible to produce rotor blades anywhere in

the world.

The design of rotor blades requires close cooperation between the dis-

ciplines of aerodynamics, glass fibre reinforced construction, materials,

production processes and production tools. The Wind Energy unit is very

strong in aerodynamics, and our cooperation with them is based on this

specialisation.

When we sought aerodynamics support in 2007, we looked around carefully

to see where the best knowledge was available. You don’t need to go far,

because the best wind turbine knowledge in the world can be found within

a radius of 800 km, in Denmark, northern Germany and the Netherlands.

At the start of 2008 we entered into a partnership with the Wind Energy

unit with the aim of obtaining mutual insights. What’s important for us is

that we get access to the specialised knowledge of Wind Energy; for ECN

it is important to be able to take part in a real development instead of, as

often happens, fulfilling a sideline role as an adviser. One of the ECN

employees works on-site at our organisation two days a week.

The development philosophy of our Asian company played a role in opting

for this cooperation. The fear of sharing knowledge is far less in Asia than

in Europe, so mutual openness is rewarded. The motto is: hedge your

bets. So we are keeping open an option for a development line outside

our company. If your favourite design does not succeed, you always have

another one in reserve, according to this philosophy - Europeans some-

times have to get used to this approach.

We greatly appreciated Wind Energy’s willingness to participate in our

activities in this way. Our work basically consists of simultaneously solving

puzzles in several specialised fields. That is after all the context in which

aerodynamic knowledge is used, and participation in that process offers

a good counterweight to scientific navel-gazing... the danger to which all

knowledge institutions and companies are exposed. Through our coope-

ration with Wind Energy, we are able to use the best available knowledge

for this technological puzzling. We benefit from the open exchange of

knowledge and have noticed that this model is increasingly being used,

for example in high-tech campuses around large companies.”

Klaas Schuring (Vice-President of AE-Rotor Techniek PLC)

‘ Around 2015 solar energy will be able to compete with the consumer price for grey electricity’ Solar Energy Paul Wyers, unit manager

“Since April 2008 the government has been stimulating the use of solar energy by means of a long-term compensation per kilowatt-hour of

produced solar electricity. This SDE scheme (Sustainable Energy Production Stimulation) is still small in terms of scale and system output.

Nevertheless it is pleasing to see that after five years there finally is another subsidy scheme for the use of photovoltaic systems. The condi-

tions of SDE are likely to be relaxed in the coming years. If the reduction of costs develops as we expect, the costs of generating solar electricity

around 2015 will have dropped so far that solar electricity will be able to compete with the consumer price for grey electricity. At that time

it will be worthwhile for consumers to use this technology even without a subsidy. PV panels made of crystalline silicon currently account for

approximately 85% of the market for solar cells. Developments at the Solar Energy unit continue to focus on cost reduction through cheaper

production techniques and higher panel efficiency. For the more distant future the unit is focusing on developing thin-film silicon on foil and

on research into organic solar cells. The big challenge is to improve the efficiency and stability of these solar cells. This will enable us to make

another important step towards inexpensive and reliable solar electricity.”

30

32 33

“The development of technology as well as the scaling up of production

is necessary for cheaper solar electricity. This must be done in coopera-

tion with producers and knowledge institutions. Roughly 85% of the solar

electricity systems produced in 2008 consists of silicon panels. Therefore,

two-thirds of the researchers at the Solar Energy unit are working on

silicon PV technology. The solar panels are constructed of solar cells

made of silicon wafers interconnected electrically and sandwiched

be tween glass and plastic films. In 2008 the unit increased the conversion

efficiencies of different cell types and modules manufactured by produc-

tion methods usable in industry. For very thin (120 µm) multi-crystalline

p-type silicon back contact cells (‘PUM cells’) we got an efficiency of

16.8%. On n-type multi-crystalline silicon cells (200 µm thick) we achieved

an efficiency of 16.7%, the highest published efficiency for such cells

produced entirely by means of industrial production methods.

A pilot line was installed in January 2008 to produce modules with silicon

back contact cells at ECN. The series connection is established by using

conducting adhesive to connect the contact points on the back of the

cells to contact points on a kind of PCB. So far approximately 100 fully

functional modules have been made on this line. This includes the modu-

les made of PUM cells of 160 µm. The efficiency of these full-size

modules is 15.4%, just 0.1% below the world record for modules with

multi-crystalline silicon solar cells. In 2009 this world record for module

efficiency is likely to be broken. This development in module technology

is being supported by research at the Delft University of Technology,

where a research assistant is conducting research for ECN into the

mechanical load of solar cells in relation to, among other things, this

module technology.

Another important activity of the unit is research into the effects of con-

taminants in silicon wafers on the performance of solar cells. By performing

tests on wafers deliberately contaminated with certain metals, we have

identified the tolerance of solar cells to such contaminants. The unit is

working on a specification of a so-called ‘solar grade silicon’ that states

which contaminants are permissible in solar cell wafers. A workshop that

we organised on this subject in Amsterdam in November 2008 was atten-

ded by many international experts.

The market share of thin-film modules has grown strongly over the past

two years. We are conducting research into two of these ‘technology

families’: thin-film silicone PV and organic PV. On a polymer solar cell

made entirely of commercially available materials, we achieved a conver-

sion efficiency of 5%. We also experimented with the ‘reverse’ structuring

of such polymer cells. This may allow us to achieve better stability because

it makes the cells less sensitive to oxidation by water vapour or oxygen.

With this structuring we have achieved an efficiency of 4%.

Internally, the Solar Energy unit directed its attention more towards fun-

damental research focused on substantially higher efficiency. Together

with universities and other research institutions, we are looking for ways

of using nanotechnology to increase efficiency, for example. This is pos-

sible by making the cell sensitive to a larger spectrum of offered light.

Technology transferCooperation agreements were signed in 2008 with two large companies

in the solar cell industry for the module technology for PUM back contact

cells. With one of these companies we additionally concluded a licensing

agreement for use of the results of this cooperation. Also in 2008 we

signed a license agreement with a company for the production of pat-

terned films to which PUM cells are glued. Under the agreement this

company has committed to marketing the technology, an effort likely to

involve several million euros.

Since April, ECN and the Holst Centre in Eindhoven have been working

intensively on roll-to-roll processing of polymer solar cells. Konarka, an

American manufacturer of polymer solar cells, selected ECN as its partner

for testing its products. Together with Konarka and other players, ECN is

endeavouring to raise the characterisation of organic solar cells to a

higher level worldwide, particularly by developing test procedures.

Together with LIOF and Solland Solar B.V., ECN established the Solar

Academy B.V. in 2008. The academy is a training and education centre for

employees working in the solar cell industry, focused principally on the

production of silicon solar cells. Over the past years ECN has established

a good curriculum and trained more than 100 people. These activities

have now been bundled and embedded at the Solar Academy. The trai-

ning centre responds to one of the major obstacles standing in the way

of further growth of the solar cell industry: the shortage of sufficiently

qualified personnel. The Solar Academy is located in Limburg (Avantis

industry park).”

Top five of 20081. Installation of a pilot line for producing modules with silicon back

contact cells;

2. Establishment of the Solar Academy;

3. Research into the effect of contaminants in silicon wafers on the

performance of solar cells;

4. Konarka’s selection of ECN as its partner for testing polymer

solar cells;

5. Fundamental research into the use of nanotechnology to

improve the efficiency of solar cells.

34 35

‘ The PV industry is now moving fast enough to lift off and the credit crisis will cause no more than a temporary weakening of growth’

“In our field everybody knows ECN. There are three leading institutions in

the world in the solar cell technology and ECN is one of them. The Solar

Energy unit is very active at conferences and everybody knows what they

do and wants to cooperate with them.

An important result of the cooperation between the Solar Energy unit and

Tempress, a fast-growing company that now has 100 employees, is the

technology for boron diffusion on n-type silicon wafers. Tempress will

shortly market the technology. We are too small to maintain our own deve-

lopment laboratories, but ECN has a complete line that allows you to see

whether a proposed innovation is truly an improvement. ECN operates

closer to industry than to universities, so together with the research centre

you can develop a new technology to industrial level.

The solar energy market is growing incredibly. In 2005 the annual fair in

Barcelona was modest, but the one in Valencia in 2008 was enormous, with

4 ha of floor space. In China, where we do a lot of business, industrial sites

of thousands of hectares are being set up especially for the manufacture of

solar cells. They are crammed with buildings. The PV industry is now moving

fast enough to lift off and the credit crisis will cause no more than a tem-

porary weakening of growth.

The Netherlands does more than you think in the solar energy world. To

start with the country has a big indirect influence on solar energy, with ECN

as the pivot. So it’s a pity that there is hardly any domestic market for which

Tempress can produce products. The Germans have approached PV on big

scale and systematically, creating an industry with 100,000 workers. Much

of the technology developed by ECN is used in Germany. The development

of the plasma nitride anti-reflection coating by the Solar Energy unit formed

the basis of an industry with sales of more than € 200 million at one of our

German counterparts.

We still have loads of plans to develop things together with Solar Energy,

but we can see that the unit is barely big enough. Perhaps they are just a

little too small to maintain their leading position. It is ridiculous not to direct

more money from the gas revenues towards the development of solar

energy. The amount of influence that this group of ECN has in the solar

world is seriously underestimated.”

Fokko Pentinga and Frans Derks (Respectively Managing Director and

Production Manager of Tempress Engineering & Services)

‘ E&S provides the infra - structure for energy research at ECN and for technology at other innovative companies’ Engineering & Services Jaco Saurwalt, unit manager

“The raison d’etre of Engineering & Services (E&S) lies in its support for developing energy technology. E&S provides the infrastructure for

energy research and for technology at other innovative companies. This challenges the unit to look proactively for new developments, which

means that intensive contacts with other innovative companies are vitally important. That is why E&S opened an office at the Philips high-tech

campus in Eindhoven towards the end of 2008. This office has a double function. On the one hand, we focus on the scouting of new develop-

ments, technology intelligence and the use of the Eindhoven region’s facilities for energy research. On the other, we direct our expertise towards

local clients, among other things with laser operations for PV cells.”

34

36 37

“The broadly-based profile of process engineering all the way through to

construction and chemical or material characterisation, proves unique

time and again. Besides work for the ECN research units, we are increa-

singly developing test setups and/or prototypes for small and large

companies. In this respect 2008 was an absolute top year, with major

projects like the Malachite radiation setup in Moscow (together with the

Joint Research Centre, JRC) and the development of an efficient and

switchable LED lighting fixture for the Alenco company.

The substantive development of Engineering & Service has moved ahead

too. It is necessary to estimate product and process costs at an ever-earlier

stage for the deliberations on whether to develop or expand processes. An

entire range of model-based tools have been developed for this purpose.

The importance of laser technology is increasing and it is becoming

cheaper all the time. Laser technologies are usable to fix microstructures

to large surface areas, for example. The use of fibre lasers now costs not

more than one-quarter of the cost of traditional lasers. Technically, too, the

fibre lasers provide extra possibilities. With the beam quality you can direct

fibre lasers far better and get the heat exactly where you want it.

Four laser systems have been added to our facilities in Eindhoven and we

have acquired a great deal of process and application knowledge. In

Eindhoven we are focusing on the further development and manufacture

of prototypes, mostly for local customers. The expectation is that we will

quickly become one of the largest players in the Netherlands in the field

of innovative laser processes. That does, however, not mean that other

techniques for fixing microstructures to large surfaces will receive no

further attention. The importance of these technologies is increasing,

particularly in energy research. Engineering & Services is one of the ini-

tiators and is now developing a roadmap for precision operations.

Setting up new industrial activities requires a specific kind of support. The

transfer of knowledge and provision of advice to SMEs is solidly supported

in the Netherlands by means of innovation vouchers of the Ministry of

Economic affairs. The vouchers enable companies to obtain a subsidy for

research and have it performed by Engineering & Services. Various compa-

nies again used this facility in the past year. As far as Engineering & Services

is concerned, SMEs may call on us even more frequently in 2009.”

Top five of 20081. Malachite, a large radiation setup in Moscow;

2. Success of innovation vouchers;

3. Opening of Eindhoven office on the High Tech Campus;

4. Production of affordable and switchable LED lighting fixture;

5. Use of laser technologies.

‘ Extraordinary skill is needed for the very tight tolerances that this work requires’

“From the Joint Research Centre (JRC) at Petten I have been working with

ECN for many years and in particular with their Engineering & Services

unit, where the workshop is located. We benefit from their good skills and

the direct lines with the people who do the work. Quality is always perfect.

At JRC I handle quality control prior to radiation experiments in the High

Flux Reactor (HFR). This involves checking matters like dimensions, elec-

trical wiring and similar. If it is necessary to modify the test setup the work

is performed by E&S. We strive for the highest possible quality and the

unit fulfils that goal excellently. JRC performs many such quality controls

in other countries, like Germany. Two years ago we were asked whether

we could use our expertise to make a radiation setup for the IR8 reactor

of the Kurchatov Institute in Moscow. Twelve years ago we made a radi-

ation setup for radiating metal samples for our HFR and it works excellently.

Now they want to start radiating their own samples in one of the positions

in their reactor core, as part of the entire upgrading of the reactor.

On the strength of our know-how and the technical concept of Engineering

& Services, we won this terrific project. After the initial contacts in early

2007, the actual work got under way in early 2008. A project of this com-

plexity usually takes 2,5 years, but by early 2009 everything was ready to

be shipped to Moscow.

Our capsule will be placed in one of the positions in the reactor core, with

dimensions of 70 x 70 mm. It has double containment and between both

walls rinsing occurs with a mixed gas of helium and neon. A special cover

protects the material to be radiated against gamma radiation, because the

intention is that only neutron radiation will reach the test material. The

purpose of these radiations is to age materials artificially to discover

whether they are suitable for prolonged use in very aggressive environ-

ments, such as the core of a high-temperature reactor.

Extraordinary skill is needed for the very tight tolerances that this work

requires. We have found during our many years of cooperation with

Engineering & Services that they amply possess this skill in many fields.”

Gerard Berg (Joint Research Centre)

37

38 39

ECN profile: facts and figures

Ambition and missionECN (Energy Research Centre of the Netherlands) occupies a unique

position in Europe with its wide-ranging knowledge of energy technology.

ECN aims to carry out groundbreaking research that will have a major

influence on energy transition and to bring technologies to every stage

of development and market them. The strenghth of a research organisa-

tion like ECN lies in this portfolio, which enables ECN to develop the new

generation of technologies needed to meet the government’s sustainable

energy targets. Many technologies developed at ECN have reached

maturity in recent years, increasingly resulting in third-party economic

activity. In this way ECN is actively counteracting the innovation paradox

identified by the Wijffels Committee.

ECN’s mission: ECN develops high-quality knowledge and technology for

a sustainable energy system and transfers these to the market..

40 41

Personnel and organisationECN is well aware that the organisation’s capital lies in its people. Top research requires top personnel.

Therefore, this is the guiding principle in the strategic plan and for the new People Management introduced by

ECN in 2007. All projects started in this framework are focused on the employee’s development and career

opportunities, on creating greater clarity between employer and employee and on offering tailor-made facilities.

ECN has a great need for employees who stand out because of their knowledge and competences. The following

diagrams provide a good picture of developments in ECN’s workforce. Note that the number of foreign employ-

ees has increased steadily since 2005, culminating in 10% in 2008.

Turnover, operating result and productivityThe figures on page 41 unambiguously show that ECN’s turnover has risen sharply since 2000, to a total of

more than € 80 million.

It is pleasing to note that productivity continues to increase slightly; the graph ‘productivity 2000-2008’

shows that ECN has managed to maintain the upward line in its turnover/FTE ratio since 2000. Compared

to 2007 the operating result has stabilised.

Productivity 2000-2008 (turnover/FTE ratio)

140

120

100

80

60

40

20

0 2000 2001 2002 2003 2004 2005 2006 2007 2008

Rat

ioft

e

mln

eu

ro

Turnover 2000-2008 in millions of euro plotted against number of FTEs

900

800

700

600

500

400

300

200

100

0 2000 2001 2002 2003 2004 2005 2006 2007 2008

90

80

70

60

50

40

30

20

10

0

Turnover fte’s

41

Number of foreign employees

60

50

40

30

20

10

0 2000 2001 2002 2003 2004 2005 2006 2007 2008

Female Male

Nu

mb

er

Job families/numbers of employees

Family Number of employees as of 12.31.2008 Management 56 8,24%Research 244 35,89%Research Support & Technological Development 114 16,77%Technical Realisation & Maintenance 107 15,74%Consulting 37 5,44%Administration 65 9,56%Facility Services 28 4,12%Fire Department 23 3,38%Unclassified 6 0,89%Total 680

42 43

Technology transferFrom its position as a large technological institution, ECN develops high-

quality knowledge and technology for a sustainable energy system and

brings the knowledge and technology to the market. The focus on bringing

technology to the market is a pivotal part of the mission contained in the

current strategy plan for 2007-2011. ECN’s patenting and licensing policy

was aligned to this focus in 2008.

Patents play an important role when bringing knowledge and technolo-

gies to the market. Patent rights protect the path from development of

trials to application in products sold in the market. Particularly in the final

phase, the development costs can be substantial and the risks for busi-

nesses increase accordingly. Patent rights prevent other parties from

obtaining commercial advantage from the use of an invention without

having contributed to the development costs.

ECN manages and operates its own patent portfolio. Two goals are pur-

sued: on the one hand, the social goal of maximising the reach or

application of the technology, and on the other the optimisation of royal-

ties or other revenues (for example from follow-up research).

For the transfer of technology, the Corporate Development department

contributed to 30 projects in 2008 by providing strategic advice on the

commercialisation of technologies, initiating and structuring commerciali-

sation processes, supporting and conducting negotiations with commercial

parties and preparing agreements needed in the commercialisation pro-

cess. Among other things this resulted in nine agreements being concluded,

including four licensing contracts for use of ECN technology.

Under these agreements the industrial parties have committed to provi-

ding between €30-35 million of new investment volume for the marketing

of technologies developed by ECN (2007: €26 million). A high percentage

of these investments are likely to be made in the Netherlands by Dutch

companies. In due course ECN will also be able to receive a significant

revenue stream in the form of royalties from product sales, technology

rights and emission certificates for the investments. A salient point is that

revenues from existing licensing contracts topped €1 million in 2008

(2007: €0.7 million).

Special mention should be made of the good progress towards esta-

blishing the Solar Academy, an initiative of ECN, LIOF and Solland Solar.

The academy is a commercial training and education centre dedicated to

the solar cell industry. It uses a curriculum that has been developed by

ECN in recent years and that has been used to train more than one hund-

red people. This training centre tackles one of the biggest obstacles

standing in the way of further growth of the solar cell industry, namely the

availability of sufficiently qualified personnel.

Publications in 2008 PS E&I BCE H2SFF WIND SOLAR E&S TOTAL 2007 2006 2005 2004

ECN reports 33 37 34 15 45 17 6 187 206 201 212 272Peer-reviewed articles in scientific journals 6 13 38 10 4 14 0 85 41 64 99 90Peer-reviewed articles in specialist periodicals 11 22 5 1 2 1 1 43 17 35 25 n.a.Submissions for conferences 15 17 27 24 7 39 2 131 90 213 275 165Books and book chapters 13 2 8 2 0 0 2 27 9 19 n.a. n.a.

Scientific publicationsECN’s commercial activities stem from a continuous process of deepe-

ning its knowledge. Quality must be visible not only at the end of the

research path, in the market, but also at the start, in the research. ECN

attaches great importance to its scientific prowess. Wherever possible

the institution seeks cooperation with universities and recruits talented

young researchers. The €30 million for the ADEM programme has given

this strategy a strong boost. For a period of four years, ECN may recruit

and train 30 young scientists (doctoral candidates – ed.). Five will work

at Petten on their theses, the other 25 at the technological universities on

research relevant to energy. This adds up to new people and new know-

ledge plus structural cooperation with research departments at the

universities. ECN encourages the writing of articles for publication in

scientific journals and specialist periodicals.

Patents Internal Filed in the Current patentsyear applications Netherlands in portfolio

2002 18 16 892003 10 5 862004 11 7 912005 13 6 832006 11 5 772007 10 6 702008 18 14 83

PatentsA substantial quantity of intellectual property was generated through the

research activities undertaken in 2008. The number of current patents in the

portfolio rose to 83, and additionally 18 new patent applications were filed.

44 45

Safety, health & environment The application submitted in 2007 for a licence to widen the field of research

– so as to conduct research into hazardous waste (including biomass waste)

- resulted in 2008 in the scope of the existing licence being broadened. The

North Holland provincial government now issues the licences instead of the

municipality of Zijpe. At the same time, virtually all nuclear activities within

ECN were ended at the start of 2008. In 2009 the nuclear energy licence

granted under the Nuclear Energy Act will be replaced by a new licence with

very limited scope (e.g. for small radioactive sources in analysis tools and

instruments).

Working with numerous hazardous chemicals requires elaborate risk control.

This is necessary not only because of the legal requirements, but also

because many clients impose risk control as a precondition and because it is

a spearhead of ECN policy on safety, health & the environment (SHE). Use

of our long-standing inspection system was continued in 2008: see the

results in the graph. In 2008 it again proved possible to satisfy on average

the very stringent ECN standard of one non-conformance per 20 employees

per inspection (0.05). This inspection will be widened in 2009, however: the

indicator will include not only hazardous substances but also many other SHE

subjects, such as the actual usability of the emergency exits or the wearing

of prescribed personal protection equipment.

ECN’s pursuit of improved control of SHE risks received an extra boost in

2008 by obtaining the OHSAS 18001 certificate, the international manage-

ment system for safety & health. Besides a quality certificate (ISO 9001), ECN

now holds certificates for SHE: ISO 14001 and OHSAS 18001. The audits

made clear that ECN deserves the certificates. On the other hand, it was also

evident that there is still room for improvement (the upward spiral).

Improvement is generally reflected by a reduction in the lost time injury fre-

quency or LTIF (number of incidents of lost time injury per million hours

worked). There were no injuries in 2008 that resulted in lost time, bringing

the five-year average closer to the provisional target of 0.8. Further reduction

of this figure by increasing SHE awareness and addressing associated beha-

viour will remain the core of ECN’s SHE policy in the coming years. It is

satisfying (although paradoxical) to note that the number of near-accident

reports continues to increase.

Spatial quality and accommodationIt took a large part of 2008 to refurbish the general laboratories (building

31). Delivery took place in February 2009, after which furnishing started

and the internal relocation got under way to accommodate all employees

at the right place. There was an exchange of ideas with the buildings

aesthetics committee. This resulted in a decision to give certain facilities

the same look and feel, now and in the future, which will allow the premi-

ses to convey a calm image.

There was a far-reaching renovation of the roads on the ECN site, making

allowance for visual requirements. Preventive and corrective maintenance

was completed on schedule. The network of pipes for extinguishing water

was modified, increasing its capacity and reducing sensitivity to faults.

The building management system was replaced and now acts as planned

as the ‘eyes and ears’ of the buildings and measures their use.

Inspection of hazardous substances 2007/2008

0,120

0,100

0,080

0,060

0,040

0,020

0,000 HCFF WIND SOLAR EBEG EEI GTS E&S BCE

Rat

io o

f non

-con

form

ance

s to

FTE

s at

uni

t 2008/2 inspection 2008/4 inspection 2007/2 inspection 2007/4 inspection ECN standard

ECN: LTIF, LTIF 5-year average

4

3

2

1

0LTIF

LTIF LTIF 5- year average Target figureLTIF 5- year average

20002002

20042006

20082010

Reports of near-accidents

200

150

100

50

0Num

ber

Actual number Target value

20002002

20042006

20082010

44

In the course of 2008 the EGON and EEI units have merged to the new E&I unit.

46 47

Nuclear Research and consultancy Group

Nuclear applications for sustainable energy and medicine“Nuclear energy again attracted considerable attention in the Netherlands

in 2008,” says Rob Stol, General director of NRG. In the first half of the year

three reports were published on the energy issue and the role of nuclear

energy. A report entitled ‘Brandstofmix in beweging’ (‘Fuel mix in motion’)

was published in January by the Energy Council, while in March the Social

and Economic Council published a report called ‘Nuclear Energy and

Sustainable Energy Provision,’ which was followed by publication of the

‘Energy Report’ of the Ministry of Economic Affairs. The government is

using these reports to work out several scenarios for the possible use of

nuclear energy. The scenarios will be submitted to the Lower House of

Parliament in spring 2010, enabling the Cabinet to reach a decision in a

responsible way about the role of nuclear energy in the fuel mix.

Stol: “For NRG 2008 was an eventful year. It was one in which we fleshed

out our strategy for the future, but also one in which the High Flux Reactor

could not start up unplanned.” During the maintenance shutdown in August

an irregularity was discovered in the HFR’s primary cooling water system.

This was reason for NRG not to start up the reactor. “The decision not to

start up obviously had a big impact,” says Stol. “The High Flux Reactor

meets 30% of the world’s demand for medical isotopes and 60% of European

demand. Millions of patients worldwide are dependent upon these isotopes

for diagnosis, treatment and pain relief. Additionally, the reactor makes an

international contribution to research on sustaining nuclear energy.”

Stol: “Even though this important role brings with it a lot of pressure, safety

is always the number one consideration for NRG. We had this in mind when

we took the decision not to start up and when we examined possibilities for

putting the reactor back into service. In the second half of 2008, all employ-

ees and external experts worked hard to be able to restart the reactor.”

Closing down the reactor had considerable impact on the entire operations

of NRG. “However, the changing public debate about nuclear energy also

meant that NRG has very good prospects in various fields.” Examples are

research into recycling and final storage of radioactive waste. The consul-

tancy arm of NRG developed excellently. “With our knowledge, we are able

to serve the nuclear and non-nuclear markets well.”

NRG’s ten-year milestoneNRG celebrated its tenth anniversary in 2008. This milestone was cele-

brated with an open day and an information newsletter delivered to

75,000 addresses in Petten and the surrounding area. Stol: “We literally

opened our doors and showed what NRG does.” Attracting the maximum

number of 500 visitors, the open day was a great success. In the anniver-

sary year the intention was to reshape the organisational structure of ECN

and NRG. However, this operation was deferred for the time being

because of the unscheduled shutdown of the HFR.

InfrastructureThe shutdown of the High Flux Reactor unintentionally focused extra

attention on the need for a replacement around 2015: the PALLAS reac-

tor. NRG held talks in 2008 with the three consortiums vying for the

construction of PALLAS. This consultation phase was an important step

towards draft plans for PALLAS, which will be ready mid 2009. With the

construction of PALLAS in Petten, all NRG’s knowledge and infrastruc-

ture can continue to be used in the future for energy research and the

production of medical isotopes.

CooperationTogether with the Energy Research Centre of the Netherlands (ECN) and

the Joint Research Centre of the European Commission (Institute for

Energy, IE), NRG decided in 2008 to intensify the strategic cooperation

in Petten. Stol: “Together, we want Petten to become the capital of energy

research in Europe. Strengthening these ties will enable the three insti-

tutions to fulfil their mission in Europe even better.” The mission is to

support national and European government policy through research and

technology development and to expedite the transition to a sustainable

energy system. The Petten initiative is well aligned to the European

Commission’s wish to establish greater structure and harmonisation

be tween research institutions in Europe.

MedicineAttention focused in the second half of 2008 on the shutdown of the HFR

and the subsequent shortage of medical isotopes. To deal with the shor-

tages as effectively as possible, there were regular consultations with

numerous parties involved in radiopharmacy. Stol: “AIPES (Association of

Imaging Producers & Equipment Suppliers), which includes representa-

tives of reactors that produce isotopes, played an important coordinating

role. The Belgians (BR2 reactor) and French (Osiris reactor) displayed

great flexibility in adapting their reactor schedules to safeguard the secu-

rity of supply of isotopes as far as possible.”

‘ The changing debate on nuclear energy offers newperspectives for NRG’

48 49

Developments in nuclear medicine are constantly moving forward. NRG

constantly cooperates with hospitals and the radiopharmaceutical indu-

stry on the development of ‘new’ radioisotopes usable in nuclear medicine.

There is also a ceaseless pursuit of optimisation of the production of

lutetium at NRG. The High Flux Reactor and laboratories like the Jaap

Goedkoop Laboratory in Petten play an indispensable role in this setting.

Lutetium from Jaap Goedkoop LaboratoryEarly 2008 patients were treated with the radioisotope lutetium that NRG

produced for the first time in the new Jaap Goedkoop Laboratory. The

chemical is used to treat notably stomach cancer, intestinal cancer and

pancreatic cancer. Stol: “I am proud that early 2008, after a period of

trialling and testing, the first lutetium was produced in our specially

equipped medical production laboratory.”

EnvironmentImportant conditions for sustaining nuclear energy are the availability of

sufficient raw materials and a solution for nuclear waste.

Recycling of wasteNRG completed a research experiment in 2008 demonstrating that plu-

tonium can be recycled more effectively. Not only can energy be recovered

from the plutonium, the life of the waste can be reduced by a factor of

ten. “By doing so NRG has developed a process that can make an impor-

tant contribution to sustaining nuclear energy and decomposing global

plutonium stocks,” says Stol.

Cooperation in final storage of nuclear wasteDutch research into the final storage of nuclear waste concentrates mainly

on the scientific and technical aspects of safety and the feasibility of final

storage. The relatively small quantity of Dutch waste and the complex and

long preparations for final storage make a purely national research pro-

gramme less attractive. That is why this research is carried out in an

international context. Stol: “Our neighbouring country Belgium is a suitable

and attractive partner. Belgium is studying the final storage of waste in deep

underground Boom clay, a formation that occurs both in the Netherlands

and in Belgium. NRG, COVRA and Belgian research institutions took the

first steps in 2008 towards joint research into final storage.”

EnergyNRG is helping to enlarge the share of nuclear energy in the Dutch energy

mix. Stol: “We shifted the activities in 2008 from the maintenance of

knowledge to the construction of new nuclear power stations.” NRG is

cooperating in the building of a new nuclear power station in Finland and

a fusion reactor in France and in the lengthening of operating times of

nuclear power stations in the United Kingdom. Stol: “We believe that the

construction of new nuclear power stations is an essential step towards

sustaining energy systems in our country. This is another field where we

should keep in step with developments in the rest of Europe.”

New-builds“The rapidly growing global demand for electricity and the realisation that

as a clean, reliable and affordable option nuclear energy is indispensable

mean that research into a new generation of nuclear power stations is

gathering speed all the time,” says Stol. NRG’s development of innovative

reactor fuels, which extract more energy from uranium and produce less

waste, has attracted worldwide interest. The safety of new reactor fuels

obviously has high priority. For the High Temperature Reactor (HTR), a

highly promising innovative nuclear powered combined heat-and-power

concept, NRG has started a unique research experiment with research

partners from Japan, South Korea and France to examine the optimum

composition of the reactor fuel. The world’s top graphite specialists met in

the Netherlands at the start of 2008 at the invitation of NRG. Stol: “The

group of more than seventy specialists from countries including Japan,

China, the United Kingdom, the United States, South Africa and France

concluded that the new HTR reactors can start being built before 2012.”

Nuclear Research and consultancy Group (NRG) is dedicated to the development

and use of sustainable nuclear technology for energy, environment and health. NRG was

established in 1998 out of merger of the nuclear activities of ECN and KEMA. In 2005

KEMA’s interest was sold to ECN, which now owns all shares. In the near future the legal

form of NRG will change from a commercial partnership to a foundation, and a

holding company with two foundations (NRG and ECN) will be established as planned.

With applied international research, production and consultancy, NRG’s service-provisioning

is focused on the nuclear and medical sectors and also on the chemical, oil and gas industries.

NRG is Europe’s largest producer of isotopes for nuclear medicine and meets more than

30% of global demand for these products.

49

50 51

Energy AdvisoryCommittee (EAC)

Prof. dr. E.M. Meijer, Unilever

Prof. dr. F.G.H. Berkhout, VU University Amsterdam

Ir. T.P. Bokhoven, ConSolair B.V.

Dr. ir. T. van Herwijnen, ETC Energy Technology

Mw. dr. ir. R. Janssen-van Rosmalen, Energy Plus

Prof. dr. G.J. Kramer, Shell Global Solutions

Prof. dr. dipl. ing. M. Kühn, University of Stuttgart

Mr. dr. P.W. Kwant

Ir. G.J.M. Prieckaerts

Prof. dr. J.H.W. de Wit, Delft University of Technology

Consultative groups

Biomass, Coal & Environmental ResearchIr. M. van Berlo, Afval Energie Bedrijf

E. Goudappel, Jacobs Nederland B.V.

Ir. H. Klein Teeselink, HoSt

R. de Kler, Nuon

H. Kursten, Eneco

Ir. G.R. Küpers, KandT Management B.V.

Ir. K.W. Kwant, SenterNovem

W. Schonewille, Havenbedrijf Rotterdam N.V.

(Port of Rotterdam Authority)

E. van Seventer, Agrotechnology &

Food Innovations

Dr. ir. W. Willeboer, Essent Energie Productie

Efficiency & Infastructure, Intelligent Grids ProgrammeH. Slootweg, Exendis

R. Schaacke, Betronic

M. van der Meiden, TenneT

Ir. J. Hodemaekers, Stedin

F. Verheij, KEMA

Ir. E. Raaijen, Exendis

J. Thomassen, Nedap

M. Eijgelaar, Essent New Energy

Ir. M. Bongaerts, Alliander

W. Altena, Logica

Efficiency & Infrastructure, Energy Efficiency in Industry ProgrammeDr. ir. W.J.W. Bakker, Dutch Separation

Technology Institute

Mr. drs. G. Brouwer, Rotterdam Climate Initiative

M. Clement, SenterNovem

Dr. T. Graafland, Shell Nederland BV

Ir. H. Keuken, Process Design Centre

Prof. dr. ir J.T.F. Keurentjes, Akzo Nobel

Ir. G.J. Koopman, Royal Association of Dutch Paper

and Cardboard Manufacturers (VNP)

Dr. ir. G.J. Kwant, DSM

Ir. A.M.G. Pennartz, KWA Bedrijfsadviseurs

Efficiency & Infrastructure, Energy in the Built Environment ProgrammeW. van den Bogerd, Ihto-Van der Beijl B.V.

Dr. L. van Bree, National Institute of Public Health

and the Environment

Ir. H.M. Croes, Government Buildings Agency/Ministry

of Housing, Spatial Planning and the Environment

Ir. C.J.G. Hamans, Rockwool

Ir. P. Hameetman, BAM Vastgoed

Ir. J.J. Overdiep, Gasunie

T.H. Reijenga, BEAR Architecten

R. van der Meer, UNETO-VNI

J. Verlinden, Ministry of Housing, Spatial Planning

and the Environment

H. Westra, Delft University of Technology,

Faculty of Architecture

G.J. Zijlstra, Zijlstra Management & Advies

Prof. dr. ir. R. van Zolingen, Shell Solar Energy Systems B.V.

P. Heijnen, SenterNovem

Hydrogen & Clean Fossil FuelsIr. E.H. Lysen, University of Utrecht

Ir. F. Denys, SenterNovem

Dr. I.S. Williamson, Air Products

Drs. J.J.P. Huijsmans, Shell Global Solutions

Dr. M. Steen, JRC-IE

Ir. R.C.F. de Kler, MBA, NUON

Dr. E.K. Erdle, Efceco

Wind EnergyIr. G.F. Bakema, Essent

Ir. van de Brug, Ballast Nedam

Prof. ir. W.L. Kling, TenneT

Prof. dr. ir. G.A.M. van Kuik, Delft University

of Technology

J.T. Olesen, VESTAS Wind Systems

A/S, Danmark

Dr. D. Quarton, Garrad Hassen & Partners, UK

M. Sc. F. Rasmussen, Risø National

Laboratory, Danmark

Ir. H.P.G.M. den Rooijen, Shell Wind Energy B.V.

Ir. dipl. V. Schellings, GE Wind Energy, Germany

D.P. Molenaar, Siemens Nederland B.V.

Solar EnergyProf. dr. C. Balliff, University of Neuchatel

Prof. dr. P. Blom, University of Groningen

Dr. M. Fleuster, Solland Solar Energy BV

Dr. O. Hartley, Q-Cells

Mr. F. van den Heuvel, Scheuten Solar

Dr. L. Podlowski, Solon AG

Prof. dr. R. van Zolingen, Shell Solar

and University of Eindhoven

Dr. F. Witte, SenterNovem

External ReviewCommittees

Policy StudiesIr. E.C.R.H. Eijkelberg, Ministry of Economic Affairs

Ir. F.J. de Groot, VNO-NCW

Ir. E.J. Postmus, Gas Transport Services B.V.

Ir. E. Luken, SenterNovem

Drs. P.J. Aubert, Energy Council

Dr. L.A. Meyer, Netherlands Environmental Assessment Agency

Drs. T.E.M. van Leeuwen, Netherlands Environmental Assessment Agency

M.J. Smit, Ministry of Traffic, Public Works and Water Management

NRGIr. P.J. Buijs, DELTA Technologie & Innovatie

Ir. J.C.L. van Cappelle, EPZ

Dr. H.D.K. Codée, COVRA

Prof. dr. ir. T.H.J.J. van der Hagen, RID

Ir. P.G.T. de Jong, Urenco Nederland B.V.

Ir. G.R. Küpers, Kandt Management

Mw. mr. A. van Limborgh, Ministry of Housing, Spatial Planning and Environment

Dr. P.J.W.M. Müskens, Ministry of Housing, Spatial Planning and Environment

Ir. G.C. van Uitert, Ministry of Economic Affairs

Prof. dr. ir. A.H.M. Verkooijen, RID

52 53

Supervisory Board

Prof. dr. R.F.M. Lubbers

(69, male, Dutch, Chairman from June 2005)

• Minister of State

• Chairman of Universitair Asiel Fonds (UAF)

• Chairman of Board of Governors of University of Tilburg

• Chairman of Board of Governors of Confederation of

Netherlands Industry and Employers VNO-NCW

• Coordinator of Rotterdam Climate Initiative

• Earth Charter

• Worldconnectors

• Managing Board of Breesaap B.V..

Term of appointment

First appointed in June 2005.

Current appointment runs until June 2013

H.A.D. van den Boogaard

(69, male, Dutch)

• Chairman of Supervisory Board of Grimaflor B.V.

• Committee member of Achmea Association

• Ex-officio Chairman of Fortis Fonds Barneveld

Term of appointment

First appointed in May 1996.

Current appointment runs until June 2009.

Ir. L.M.J. van Halderen

(62, male, Dutch)

• Former Chairman of Board of Directors of NUON

• Member of Supervisory Board of Draka Holding

• Chairman of Supervisory Board of Isala clinics (Zwolle hospitals)

• Member of Supervisory Board of Foundation Rural Energy

Assurance Services (FRES)

Term of appointment

First appointed in June 2008.

Current Appointment runs until June 2012.

Ir. A. van der Velden

(68, male, Dutch)

• Chairman of Supervisory Board of Vitens N.V.

• Chairman of Supervisory Board of Nedap N.V.

• Deputy Chairman of Supervisory Board of Stork N.V

• Member of Supervisory Board of TKH Group N.V.

• Deputy Chairman of Netherlands Environmental Impact

Assessment Committee

• Member of the Committee on Development Cooperation

for the Advisory Council on International Affairs

Term of appointment

First appointed in February 1996.

Appointment term ended on 1 February 2008.

Drs. G.H.B. Verberg

(66, male, Dutch)

• President Energy Delta Institute

• Chairman Supervisory Board Berenschot Holding

• Chairman Supervisory Board UCN N.V.

• Vice-chairman Board URENCO Ltd.

• Member Supervisory Board Essent N.V.

• Member of General Energy Council

• Member of Advisory Board E.ON Ruhrgas AG

• Member of Supervisory Board International

Institute for Social Studies (Den Haag)

• Chairman of the Board Clingendael

international Energy Program

• Member of the Supervisory Board Winterschall Nederland b.v.

• Member of the Supervisory Board of the

Groninger Museum Foundation

• Member of Advisory Board Advanced Power a.g.

• Member of Advisory Committee Waddenfonds

Term of appointment

First appointed in June 2005.

Current appointment runs until June 2013.

52 53

• Member of Supervisory Board of Gelder Groep

• Chairman of Supervisory Board of Rabobank IJsseldelta

Term of appointment

First appointed in April 1996.

Term of appointment ended on 1 June 2008.

Dr. ir. C.P.Jongenburger

(49, male, Dutch)

• Member of Board of Directors of Wuppermann AG

• Board member of the Netherlands Study Centre for

Technology Trends (STT)

• Member of Netherlands Academy of Technology and Innovation

• Member of Industry & Science Advisory Board of Icos Capital

• Member of Advisory Board of Advies ReSteel BV

Term of appointment

First appointed in February 2008.

Current appointment runs until February 2012.

Prof. dr. W.C. Turkenburg

(62, male, Dutch)

• Professor of Science, Technology and Society, Faculty of

Science, Utrecht University

• Head of the Department of Science, Technology and Society,

Faculty of Science, Utrecht University

• Scientific Director of the Copernicus Institute for Sustainable

Development and Innovation, Utrecht University

• Member of the Board of the International Institute for Industrial

Environmental Economics (IIIEE), Lund University, Sweden

• Member of the Board of Directors of the International Energy

Initiative (IEI), with regional offices in Bangalore (India) and

Sao Paulo (Brazil)

• Member of the Board of the SENSE Research School

• Member of the Board of Directors of Advies Eiffel Utilities

• Deputy Chairman of the steering group of the BSIK research

programme CATO (CO2 capture, transport and storage)

• Member of the Programme Committee for Energy Reseach at

Universities of the Netherlands Organisation for Scientific

Research NWO and SenterNovem

• Chairman of the Netherlands Platform for Communication on

Climate Change (PCCC)

• Member of the Executive Committee of Global Energy

Assessment (GEA), IIASA, Laxenburg, Austria

• Member of the SCEF committee (Special Committee on

Energy Physics) of the Foundation for Fundamental

Research on Matter (FOM)

• Member of the TE (Future Energy Supplies) committee of

the Social and Economic Council of the Netherlands (SER)

• Member of the Organising Committee of the 10th

International Conference on Greenhouse Gas Control

Technologies (GHGT-10), Amsterdam, September 2010.

• Associate Editor of Energy for Sustainable Development, IEI

and Elsvier

• Lead Author of IPCC Special Report on Renewable Energy

Sources and Climate Change Mitigation

Term of appointment

• First appointed in September 2001.

Current appointment runs until September 2009

Dr. ir. A.W. Veenman

(62, male, Dutch)

• Former Chairman of Board of Directors of NV Nederlandse

Spoorwegen (Netherlands Railways)

• Former Chairman of Board of Directors of Stork N.V.

• Member of Supervisory Board of Rabobank Nederland

• Member of Supervisory Board of TenneT BV

• Member of Supervisory Board of Gemeentelijk

Vervoerbedrijf Amsterdam (GVB) NV

• Member of Supervisory Board of SPF Beheer BV

• Chairman of Supervisory Board of ICTRegie

• Chairman of Advisory Board of National Aerospace

Laboratory (NLR)

• Chairman of Museum Committee of Centraal Museum Utrecht

• Chairman of Science, Technology and Society Council, KIVI

NIRIA

• Chairman of Rootliep Committee (rail forum)

• Chairman of Talent to the Top Monitoring Committee

(diversity)

• Member of Board of the Next Generation Infrastructures

Foundation (NGInfra, BSIK)

• Member of Board of the Samas Foundation (continuity)

• Member of Advisory Board of Arthur D.Little Nederland

• Member of Advisory Board of Erasmus School of

Accounting & Assurance

Board of Directors

Dr. A.B.M. (Ton) Hoff

(Chairman of the Board of Directors)

• Chairman of the European Research Alliance

• Chairman Advisory Board of the Competence Center for

Energy and Mobility (CCEM)/Swiss

• Vice chairman of Advisory Group on Energy for 7th

Framework Programme, European Commission

• Member of EMVT (Electro Magnetic Power Technology)

• Member of Confederation of Netherlands Industry and

Employers VNO-NCW Energy Committee

• Member of Advisory Board of Syntens West-Nederland

• Member of Netherlands Academy of Technology

and Innovation

• Member of Supervisory Board of Energy

Valley Foundation

• Member of Advisory Board of Equens (formerly Interpay)

• Member of Supervisory Board FOM (Fundamental

Research of Matter

• Board Member of ATO

(Association Technology Conveyance)

• Board Member of WEC

(World Energy Council) Netherlands

Dr. C.A.M. (Kees) van der Klein

(Director)

• Meeting of Shareholders of Enatec b.v. (development of

Stirling engines)

• Meeting of Shareholders of RGS b.v. (development of

solar cell components)

• Member of Advisory Council of Fuel Cells and Hydrogen

Competence Network of the federal state of North

Rhine-Westphalia, Germany

• Chairman of the Programme Committee of Energie

Forschungszentrum Jülich (energy research centre)

• Member of Scientific and Technical Committee (WTA) of

Forschungszentrum Jülich

• Member of Sustainable Electricity System Transition

Platform

• Member of Energy Research Programme Committee of

the Netherlands Organisation for Scientific Research

NWO/SenterNovem

• Member of Executive Board of ACTC/NWO

• Vice-Chairman of BSIK programme CATO

• Member of Board of Gas Research and Sustainability

Program (GrASp)

• Member of Advisory Board for Master of Business in

Energy Systems Delft TopTech (Delft University of

Technology)

Drs. G.H.L. (Gerald) Santing

(Director)

• Treasurer of De Lichtenberg/Nijenstede Foundation

(support fund)

54 55

Corporate GovernanceReport

The Board of Directors and the Supervisory Board subscribe to the gene-

ral principles and criteria set out in the Tabaksblat Code, i.e. integrity and

transparency, with proper supervision and reporting. Although the Code

is directed at Dutch companies quoted on the stock exchange, the Board

of Directors and the Supervisory Board decided in 2004 to implement

those parts of it that are relevant to ECN, and regulations containing these

relevant parts were drawn up in 2006. These were not amended in 2008.

The ECN Board of Directors consists of a Statutory Director and two

directors. The former is the Chairman of the Board. He or she bears

ultimate responsibility for the organisation as a whole, reporting to the

Supervisory Board. The Statutory Director is appointed, suspended and

dismissed by the Supervisory Board. The current Director has been

appointed for an indefinite period. The Director’s remuneration is set by

the Supervisory Board.

The Supervisory Board comprises six members. Its tasks are to supervise

the management of the organisation by the Board of Directors and the

general running of the organisation and its affiliated companies. The

Supervisory Board advises the Board of Directors.

The members of the Supervisory Board are appointed by the Minister of

Economic Affairs on the recommendation of the Supervisory Board. The

Supervisory Board consults with the Board of Directors and with the

Works Council when making these recommendations. Candidates must

fit the profile laid down by the Supervisory Board. The Supervisory Board

draws up the profile taking account of the nature of ECN, its activities and

the expertise, experience and independence required of its members.

The Supervisory Board evaluates the profile annually. Members of the

Supervisory Board are appointed for a period of four years and may be

reappointed twice at most.

The Board of Directors and the Supervisory Board are responsible for

ECN’s corporate governance structure, reporting to the Minister of

Economic Affairs. The Supervisory Board provides the Minister of

Economic Affairs with any information he or she may require.

Report SupervisoryBoard

The Supervisory Board held four regular meetings and one additional mee-

ting in the year under review. The Board of Directors attended each meeting.

Due to illness Mr H.A. D. van den Boogaard was able to attend only the

meeting on 18 March 2008. A total of four members were absent from a

meeting at least once. Subjects dealt with at the regular meetings included:

• financial affairs of ECN and NRG, including the annual accounts, the regular

financial reports, the investment plan, the operational plan and associated

companies;

• the strategic plan for 2007-2011 and the recommendations of the External

Review Committees and the Energy Advisory Committee;

• the restructuring of ECN and NRG;

• the shutdown and repair of the High Flux Reactor (HFR);

• other matters: the report from the internal ECN Scientific Advisory Council,

the new PALLAS reactor, the new ECN top management structure.

Two of the four consultative meetings of the Works Council with the manage-

ment representative were attended by a member of the Supervisory Board.

The Supervisory Board has two committees, the Audit Committee and the

Remuneration and Appointments Committee, which each prepare special

subjects for the Supervisory Board. Regulations for both committees were

drawn up and approved by the Supervisory Board in 2005 as part of

Corporate Governance.

Audit CommitteeThis committee, comprising Mr H.A.D. van den Boogaard (Chairman), Prof.

dr. W.C. Turkenburg and Drs. G.H. Verberg, met three times in 2008.

Matters dealt with at the meetings included the annual accounts and

management letter, the auditor’s report, the restructuring of ECN and

NRG, the funding of the HFR and the shutdown and repair of the HFR. An

additional Audit Committee meeting held on 18 November 2008 in the

presence of Prof. dr. R.F.M. Lubbers and dr. ir. A. Veenman was devoted

entirely to the repair of the HFR.

Remuneration and Appointments CommitteeThis committee, comprising Dr. ir. A. Veenman (Chairman), Prof. dr. R.F.M.

Lubbers and Dr. ir. C.P. Jongenburger, met twice in 2008. Subjects dealt with

included new conditions of employment at ECN/NRG, the composition of

the Supervisory Board and recommendations to fill vacancies occurring in

2009, personnel policy, remuneration, targets of the Director, succession

planning for the ECN Board of Directors and the naming of a Works Council

representative on the Supervisory Board.

Conflict of interestUnder the regulations, any conflicting interests of a member of the Supervisory

Board, the Board of Directors or the external auditor of material importance to

ECN or the person in question must be reported immediately to the Chairman

of the Supervisory Board. No such reports were received in 2008. There was

compliance with the relevant provisions of the regulations.

IndependenceIn the opinion of the Supervisory Board, there was compliance with requirement

that each of its members must be independent, with the exception of a maximum

of one. The Supervisory Board regards all its members as independent.

ChangesThe composition of the Supervisory Board changed in 2008. Mr ir. A. van der

Velden stepped down on 1 February 2008 and Mr dr. ir. C.P. Jongenburger was

appointed a member of the Supervisory Board. Mr ir. L.M.J. van Halderen step-

ped down on 1 June 2008 and Dr. ir. A. Veenman was appointed a member of

the Supervisory Board.

The Supervisory Board thanks the Board of Directors and staff for their

efforts and achievements in 2008, which made the past year a successful

one for ECN.

Rotterdam, 18 March 2009

56 57

Directors’ Report

IntroductionThe consolidated annual accounts of Stichting Energieonderzoek

Nederland (ECN) comprise the annual accounts of ECN and the group

companies:

• VOF Nuclear Research and Consultancy Group

• (including NRG Personeel v.o.f.)

• NRG Nuclear Services BV

• ECN Nucleair BV

• ECN Wind Energy Facilities BV (WEF)

• SunLab BV

ECN’s mission can be described as follows: ‘ECN develops high-level

knowledge and technology for a sustainable energy system and transfers

it to the market.’

ECN, a private-law organisation, is a task-driven organisation that occu-

pies a unique position in Europe due to the knowledge it is able to provide

in the field of sustainable energy. Its high-quality research infrastructure

enables it to develop, further develop and utilise knowledge and innova-

tive technology. ECN aims to carry out groundbreaking research that will

have a major influence on energy transition, applying knowledge and

technological development in practice.

In recent years, a number of technologies developed at ECN have reached

maturity. In 2008, fourteen new patents were registered and royalties for

the first time exceeded € 1 million.

ECN’s research activities focus in particular on multi-annual, demand-dri-

ven programmes formulated in close consultation with the Ministry of

Economic Affairs, and SenterNovem. The aim is to increase the substantive

synergy between the EZS research programme and the Energy Research

Strategy contracts. The quality of current ECN research is high across the

board, in some cases even trend-setting in Europe. The nuclear technology

research activities were hived off to the Nuclear Research and consultancy

Group (NRG) in 1998. NRG has gained a good position for itself in its par-

ticular area of the international scientific world as a centre of expertise,

focusing on developing knowledge, products and processes for the safe use

of nuclear technology in energy, the environment and health.

ECN holds a 70% capital share in NRG; the remaining 30% is held by ECN

Nucleair BV, a company wholly owned by Stichting ECN. This structure is

a left-over from the former situation (until 2006) in which the 30% stake

was held by KEMA. A more appropriate structure was examined in 2008.

Due to the temporary shutdown of the High Flux Reactor (HFR) operated

by NRG, this restructuring has been postponed.

The activities of ECN Wind Energy Facilities BV relate to the operation of a

trial wind farm for multi-megawatt wind turbines. They comprise research into

the “wake effects” among wind turbines erected on the farm, supplying the

power they generate back to the grid, and renting out testing space to third

parties wishing to erect their own prototype turbines. The turbines were sold

to NIB Capital in a sale and leaseback transaction at the end of 2003. In

September 2008, a proprietary ‘scale farm’ was added to the farm, in which

it is investigated how wind turbines in large wind farms respond to each other.

SunLab BV markets a measuring instrument for solar cells. This instru-

ment enables manufacturers to optimise the production of solar panels.

Situation as at the balance sheet date. The solvency ratio (equity divided by total assets) remained stable at

6.5%, and liquidity rose slightly to € 71,3 million. Part of these resources

(€ 32 million) is not at the free disposal of ECN and will be used to meet

liabilities.

There has been a delay in the proposed setting-up of a Joint Undertaking to

regulate the role of the Supplementary Programme in the running of the HFR

from 2008. However, in 2008 conditional funding was obtained from the Ministry

of Economic Affairs totalling € 4 million (for the period 2008-2011) and € 8

million (for 2008). The amounts to be received from the Ministry in 2009 are not

yet known. Intensive consultations between Euratom and the Ministry are under

way, which are expected to produce effect at some time in 2009.

The ECN workforce as of 31 December 2008 increased by 60 persons

compared with 31 December 2007, from 958 (NRG 325) to 1,021 (NRG

341). The number of full-time equivalents (FTEs) rose to 934 (NRG 312)

up from 852 (NRG 286).

Developments during the financial yearECN is well aware that the organisation’s capital lies in its people. In 2008,

a new remuneration and benefits package was developed after a bench-

mark study had been carried out. The major conclusion from the

benchmark study was that ECN & NRG pays above-average compensa-

tion and benefits to the lower salary groups but applies a below-average

remuneration package for the higher salary groups. The remuneration

package was based on the following principles:

• aligns with the strategy and market position;

• attracts competent employees and binds them to the organisation;

• is competitive;

• is encouraging and inspiring;

• is affordable.

The remuneration package was developed in close consultation with

delegations of the trade unions and the Works Council. We hope to com-

plete this project in 2009 and implement the new compensation and

benefits system as soon as possible (phased, if required).

A summons was issued against ECN and NRG in July 2007 by the

Association of Former Employees of ECN & NRG (OMEN). OMEN has

applied for a declaratory judgment that ECN et al. did not have the power

to change the indexation provisions in the pension schemes for former

ECN employees. In 2008, the court pronounced an interlocutory judge-

ment against which OMEN has appealed. No provision has been formed

for any financial consequences resulting from these proceedings.

In August, the HFR was not started up as a trace of gas bubble in the primary

cooling water system was identified during major maintenance and inspec-

tions. This necessitated a reanalysis of the safety of the system. Based on an

examination program and safety studies, seals and a detection system have

now been installed and the reactor restarted in February 2009. An action plan

for the final repair work to be carried out in the spring of 2010 is being drafted.

In 2008, investments totalled € 11.9 million. The major investment was

made in one of the buildings, which will be commissioned early in 2009

to replace several outdated buildings that will be demolished over time.

Investments were made, too, in an upgrade of a number of pilot lines and

various items of laboratory equipment.

58 59

Financial resultsNet operating income increased slightly to € 132.0 million. In 2007, this

figure was positively affected by a non-recurring gain of almost € 2.0

million.

The shutdown and repair costs of the HFR put significant pressure on

both turnover and result of NRG. The HFR was inoperative between

August 2008 and February 2009.

Wage costs increased by 5.5%, particularly due to the increase of 60 FTE,

the 1.75% general pay rise as at 1 January 2008 and the increase in the

year-end bonus to 4.4% up from 2.9%.

Financial expenses were € 1.0 million higher than last year due to a € 1.8

million write-down of the securities portfolio. The scope of the item ‘secu-

rities’ further decreased following repayments (€ 3.9 million) and a

reclassification (€ 7.2 million) to current assets.

Just like last year, the income from participating interests was negative as

a result of start-up losses due to development activities still in progress in

the 30% holding RGS Development BV. In 2008, agreement was reached

with the other shareholders that ECN will no longer contribute to future

financing of RGS. As a result, the ECN interest will decrease. The scope of

this decrease will depend on a business valuation yet to be performed.

In 2008, € 3.1 million was added to the provision for radioactive waste.

This was primarily caused by higher engineering costs incurred for the

design of a facility in which high and low radioactive waste can be sepa-

rated and packaged in order to prepare for transportation to COVRA.

Also, an amount of € 1 million was provided to defray the decontamina-

tion costs of a building of NRG.

On top of the fixed amount of € 2,0 million pledged for index-linking, a

performance-related amount of € 0.4 million was made available during

the financial year for index-linking of the pensions administered by

Centraal Beheer Achmea.

The net profit after tax was € 0 (2007: € 2.5 million).

Expectations for 2009The second half of 2008 witnessed a dramatic slow-down of the economy.

This trend continued into the first few months of 2009. Luckily, ECN is not

in the eye of the financial crisis but expectations are that the current

circumstances will not leave ECN or its business relations unaffected.

Several assignments have already been delayed or cancelled. On the

other hand, a vigorous plea is made from various sides (including the

Innovatieplatform) to accelerate innovation through intensified research,

particularly in the field of sustainable energy. Amidst this uncertainty, ECN

will pursue a frugal financial policy and a prudent recruitment policy.

In February 2009, it was announced that the Ministries of Economic

Affairs and Housing, Spatial Planning and the Environment will make

available € 30 million to enhance testing of materials at four national

energy research institutes. The funds will be divided among ECN and the

three Universities of Technology for their ‘Advanced Dutch Energy

Materials Innovation Lab’, briefly called ADEM. Half of the money is des-

tined for the education of young top talent (doctoral students), the other

half for the acquisition of new research equipment. This multi-annual

program will start in 2009.

In addition, no efforts will be spared to provide clarity on the Supplementary

Program for management of the HFR. The action plan for final repair of

the HFR will be elaborated in greater detail as well.

The level of investments is expected to be lower in 2009 than in 2008, due

to the special investment in a building made in the latter year.

ECN is well-positioned to capitalise on any opportunities that may arise

in the current market circumstances.

Petten, 28 april 2009.

Dr. A.B.M. Hoff

Financial Report

59

60 61

Consolidated balance sheet (x € 1.000)(before appropriation of profit) Clarification 31-12-08 31-12-07

ASSETS Fixed assetsIntangible fixed assets 1 1.626 1.523Tangible fixed assets 2 37.768 31.021Financial fixed assets:• Participations in knowledge-based companies 3 44 592• Other participations 3 12 23• Securities 3 12.453 25.190• Other receivables 3 4.860 5.544Total financial fixed assets 17.369 31.349Total fixed assets 56.763 63.893

Current assetsWork in progress 4 16.332 17.105Receivables and prepaid expenses 5 25.262 23.268Inventories 5.907 4.175 47.501 44.548

Cash and cash equivalents 6 71.339 69.884

TOTAL 175.603 178.325

EQUITY AND LIABILITIES

Group equity 7

Equity 11.326 11.326Minority interest 41 41 11.367 11.367Provisions Provisions 8 - 15 89.799 90.617

Current liabilitiesPrepayments third parties 16 39.536 32.216Accounts payable 16 12.613 10.081Taxes and social security contributions 16 3.013 2.972Debts relating to other personnel costs 16 8.543 8.527Debts relating to pensions 16 4.905 16.973Other liabilities and accrued expenses 16 5.827 5.572 74.437 76.341

TOTAL 175.603 178.325

Consolidated statement of income (x € 1.000)(before appropriation of profit)

Operating income 2008 2007

Income• Financing by the State of the Netherlands 17 44.943 42.141

• Assignments and other funds 18 75.646 74.743• Increase / decrease in work in progress 18 -773 2.947 74.873 77.690

Capitalised corporate production 19 4.239 2.351Other operating income 20 7.986 9.801Total operating income 132.041 131.983

Operating expensesWages and salaries 21 58.250 55.201Social security charges 21 3.305 2.061Pensions 21 7.294 11.316Amortisation of intangible fixed assets 22 155 0Impairment of intangible fixed assets 0 0Depreciation of tangible fixed assets 5.160 4.382Other operating expenses 23 53.645 52.979Total operating expenses 127.809 125.939

Operating result 4.232 6.044

Financial income and expenses 24 -3.012 -1.983 Result on ordinary operations before taxation 1.220 4.061

Taxation on result from ordinary operations 25 -661 -619

Result on ordinary operations after taxation 559 3.442

Share in income from participations -559 -928 Net result 0 2.514

Consolidated cash flow statement (x € 1.000)

2008 2007

Operating result 4.232 6.044Amortisation of intangible fixed assets 155 0Depreciation of tangible fixed assets 5.160 4.382Movement in provisions -1.116 7.236Capitalised corporate production -4.239 -2.351

Movements in working capital• Work in progress 773 -2.947• Inventories -1.732 674• Receivables and prepayments 6.272 -2.386• Current liabilities -3.983 6.718 1.330 2.059Cash-flow from business operations 5.522 17.370

Financial income: - interest received 2.626 3.080Paid tax on profits -661 -619 1.965 2.461Cash flow from operating activities 7.487 19.831

Investments in intangible fixed assets -258 -47Investments in tangible fixed assets -9.446 -12.439Disposal of tangible fixed assets 0 1.888Acquisition of non-consolidated participations 18 -714Investments in other financial fixed assets -127 0Disposal of other financial fixed assets 3.839 93

Cash flow from investment activities -5.974 -11.219 1.513 8.612

Financial expenses: - interest paid -58 -5.063

Cash flow from financing activities -58 -5.063

Movement in cash and cash equivalents 1.455 3.549

Opening balance cash and cash equivalents 69.884 66.335

Closing balance cash and cash equivalents 71.339 69.884

Movement in cash and cash equivalents 1.455 3.549

62 63

Notes to the consolidated financial statements

GeneralUnless indicated otherwise, all amounts stated in the annual report are x EUR 1.000. Stichting Energieonderzoek Centrum Nederland [Energy research Centre of the Netherlands] (ECN) has its registered office in Petten, municipality of Zijpe, the Netherlands. The object of the Stichting is to gain knowledge and experience in the field of energy and to ensure that it is effectively made instrumental to the public interest and the various sub-interests to be distinguished therein.

ActivitiesThe activities of Stichting Energieonderzoek Centrum Nederland, with its registered office in Petten, the Netherlands, and its group companies consist primarily of:a. conducting and commissioning fundamental, strategic, and applied research and

related studies in fields determined by the Stichting itself, or as instructed by the national government, lower government authorities, companies, including electricity companies, other organizations and individuals.

b. making accessible and sharing the results of research and studies as referred to under a., and supervising and providing support in the application of those results.

c. collaborating with companies, included energy companies, and other research insti-tutions in research and studies as referred to under a.

d. contributing to coordinating research and studies in the Netherlands, and collabora-tion internationally.

Group structureStichting ECN heads a group of companies. An overview of the information required under Sections 379 and 214 Book 2, of the Netherlands Civil Code is included below:

Consolidated participations:Name Registered office Share in issued capitalNRG v.o.f. Petten, municipality of Zijpe 70%NRG Personeel v.o.f. Petten, municipality of Zijpe 70%NRG Nuclear Services B.V. Arnhem 100%(formerly DNC Nucleair Technology B.V.) ECN Nuclear B.V. Petten, municipality of Zijpe 100%(ECN Nucleair B.V. holds the other 30% of the shares in NRG v.o.f. and NRG Personeel v.o.f.)Wind Energy Facilities B.V. Petten, municipality of Zijpe 100%SunLab B.V. Petten, municipality of Zijpe 100%

Non-consolidated participationsFor a specification of the non-consolidated participations, reference is made to the note on the participations in the balance sheet.

Consolidation principlesThe consolidated financial statements of Stichting ECN include the financial statements of the group companies, and other legal entities over which Stichting ECN has manage-ment control, or that are managed centrally. If these entities are immaterial to the view presented by the consolidated financial statements, they are not included in the conso-lidation. The consolidated financial statements are prepared in accordance with the accounting policies of Stichting ECN.The financial statements of the group companies, and other legal entities and companies included in the consolidation, have been fully included in the consolidated financial statements. All intercompany balances and transactions have been eliminated. Minority interests in Stichting ECN’s equity and the results of group companies are reported separately in the consolidated financial statements. The results of newly acquired group companies and the other legal entities and companies included in the consolidation are consolidated as from the date of acquisition. On that date, the assets, provisions, and liabilities are valued at fair value. The paid goodwill is charged fully to the result in the year of acquisition of the entity. The results of divested participations are included in the consolidation until the date the group affiliation is terminated.

Accounting principles - generalThe consolidated financial statements have been prepared in accordance with the provisions in Title 9, Book 2, of the Netherlands Civil Code. Valuation of assets and lia-bilities and determination of financial results are based on the historical cost convention. Assets and liabilities are recorded at face value, unless mentioned otherwise. Income and expenditures are accounted for on an accrual basis. Profits are recorded insofar as realised as at the balance sheet date. Liabilities and possible losses originating before the end of the year are recorded if they have become known before the preparation of the financial statements.

Changes in accounting policiesEffective 1 January 2008, the Stichting applies the accounting principles as prescribed under the Dutch Accounting Standard RJ 290 ‘Financiële Instrumenten” for financial instruments. Hence, the accounting policies which the Stichting applies for recognition, valuation and classification of financial instruments in these financial statements differ from those applied in the 2007 financial statements.RJ 290 permits the Stichting to refrain from revising the first-time valuation and classi-fication of financial instruments that have been taken out before the date of the opening balance sheet of the comparative figures of the financial statements in which RJ 290 is applied for the first time. Based on this exemption, the Stichting:• Has refrained from revising the first-time valuation and classification of financial instru-

ments taken out prior to 1 January 2007;• Has recognised all financial instruments taken out since 1 January 2007 in accordance

with the provisions of RJ 290.For the accounting policies applied for financial instruments, reference is made to the notes on the respective balance sheet items. Partial retroactive application of RJ 290 as from 1 January 2007 did not affect the equity and result over 2007.

Financial instrumentsFinancial instruments include primary financial instruments, such as receivables and debts, and derivative financial instruments. For the accounting principles relating to the primary financial instruments, we refer to the note on this specific balance sheet item. The Stichting has not hedged the currency and interest rate risks incurred on derivative financial instruments during the financial year 2008.

Changes in presentationTo facilitate comparison, the figures for the financial year 2007 have been modified where necessary to be in line with the presentation used for the financial year 2008.. Translation of foreign currenciesReceivables, debts, and liabilities in foreign currencies are translated at the exchange rates prevailing at the balance sheet date. Transactions in foreign currencies during the year under review are recognized in the financial statements at the exchange rates prevailing at the transaction date. The exchange differences resulting from the transla-tion as at the balance sheet date are included in the statement of income, taking into account any hedge transactions.

Principles for valuation of assets and liabilities

Intangible fixed assetsIntangible fixed assets are stated at cost incurred, less accumulated amortisation and impairment, if any. Annual amortisation is based on the straight-line method, as explained in the notes to the balance sheet. The useful economic life and amortisation period are revised at the end of each financial year. The goodwill acquired during the year as a result of take-overs (representing the difference between the acquisition price paid and the net asset value of the participation acquired) is fully amortised in the year of acqui-sition.

Tangible fixed assetsTangible fixed assets are stated at cost, less accumulated depreciation and impairments, if any. Depreciation is based on estimated useful life of the respective assets and is calculated as a fixed percentage of cost, taking accounting of the residual value, if any. Depreciation commences when the asset is first used. Land is not depreciated. A pro-vision for major maintenance is formed to defray the costs of periodic maintenance. This provision is included under the item ‘other provisions’ at the liabilities side of the balance sheet. For the accounting policies applied with respect to this provision, reference is made to the note on provisions.

Financial fixed assetsNon-consolidated participations on whose business and financial policies significant influence is exercised are valued at net asset value, but not lower than nil. The net asset value is determined in accordance with the accounting policies of ECN.

Participations with a negative net asset value are valued at nil. If the Stichting fully or partly guarantees the debts of the relevant participation, a provision is formed for an amount equal to the share in the participation’s losses or the sum of the expected pay-ments by the Stichting to the respective participation.

Participations on whose business and financial policies the Stichting has no significant influence are valued at cost net of impairments, if any. The receivables from and loans to participations as well as other receivables are included at market value on their first-time recognition and are then valued at amortised cost, which equals face value, net of any provisions deemed necessary.The investments in equity instruments included under financial fixed assets are listed shares that do not belong to a trading portfolio. These investments are valued at market value (per fund) and any changes in value are directly taken to the statement of income.The bonds stated under financial fixed assets, which do not belong to a trading portfolio either and are held until the end of the investment term, are valued at amortised cost. Bonds taken out before 1 January 2007 are valued at the lower of cost and market value as at the balance sheet date, with the premium or discount upon the acquisition of bonds, divided over their terms, is added or charged to the statement of income, as the case may be.

Inventories and work in progressInventories of raw and ancillary materials and trade goods are valued at the average acquisition price, determined as the lower of average purchase price and net asset value. This lower net asset value is determined based on individual assessment of the inventories.

Work in progress is valued at cost incurred, less the amounts already stated on the balance sheet date and losses already foreseeable on the balance sheet date. The costs incurred include the direct use of materials, the direct wage and machinery costs and other costs that are directly attributable to the research project. The income from the financing of the research project is determined based on the costs incurred in connec-tion with the work at the balance sheet date. Instalments invoiced relating to work in progress are deducted from the value of the work in progress. Any resulting negative balance of work in progress is accounted for under current liabilities.

Receivables and prepaid expensesReceivables are included at face value on first-time recognition and are subsequently stated at amortised cost, which can be equal to the face value, less any bad debt provi-sions deemed necessary. These provisions are based on an assessment of individual receivables.

64 65

ProvisionsProvisions for employee benefitsIn 2006, the pension regulation was changed from a defined benefit regulation into a defined contribution regulation. Under this pension plan, the Stichting pays fixed amounts to the respective pension insurers and funds and has no payment obligations other than those fixed amounts. The amounts are expensed as and when they are payable.

Long-term employee benefitsOther long-term employee benefits concern the benefits included in the remuneration package, such as long-service awards, temporary leave and related benefits. All these benefits are long-term. The net liability relating to these benefits concerns the sum of the future benefits earned by employees in exchange for their services in the current and prior reporting periods. Actuarial gains and losses on other long-term employee benefits are directly added or charged to the income statement.

Redundancy arrangements involve liabilities on account of termination of employment of workers prior to their respective pension start dates. Redundancy payments are recorded if a reasonable case can be made that there is an obligation to terminate the employment of certain workers. Payments are recorded at present value. The liabilities are recorded as such and disclosed under provisions. For bonus and profit sharing schemes based on relevant performance regulations, a liability is included under short-term liabilities.

Provision for radioactive wasteThis provision has been formed for the costs of future treatment and storage of radio-active waste. The provision is stated at present value, and is increased by an annual interest rate of 5% to cover future price increases.

Provision for major maintenanceThe provision for equal distribution of charges due to major maintenance on buildings is determined based on expected costs over a series of years. The provision is usually set up according to the straight-line method. The provision is based on the findings of the Temid report published in 2006 following a survey of overdue maintenance and major main-tenance to be carried out over a period of 10 years. The maintenance performed is deducted from this provision.

Principles for determination of financial results

Operating incomeOperating income includes income from services and products supplied during the year under review, less the taxation of the turnover. Income from research projects is included in proportion to progress made. Costs for these research projects are recognised as incurred.

TaxesCorporate income tax is determined by applying the respective rate to the result for the financial year, taking into account permanent differences between profit calculations for financial reporting and tax purposes. Deferred tax assets (if any) are accounted for only insofar as their realisation is probable.

Share in income from participationsThe results of participations on whose business and financial policies the Stichting exercises significant influence are stated as the share in the profit of these participations to which the Stichting is entitled. This profit is determined in accordance with the prin-ciples for valuation and determination of the result applicable at Stichting ECN.Dividends from participations on whose business and financial policies the Stichting does not exercise significant influence are accounted for as income under the item ‘financial income and expenses’.

Principles for preparation of the consolidated cash flow statementsThe cash flow statement is prepared according to the indirect method. The cash in the cash flow statement consists of cash and cash equivalents. Cash flows in foreign cur-rencies are translated at an estimated average rate. Exchange differences relating to funds are shown separately in the cash flow statement. Profit taxes, interest received and dividends paid are included under the cash flow from operating activities. Interest and dividends paid are included under the cash flow from financing activities.

Notes to the consolidated balance sheet

FIxED ASSETS

Intangible fixed assetsDuring 2008, SunLab B.V. continued the development of the Sherescanner. The related development costs have been accounted for as investment costs. Also a prepayment relating to the period 2009-2012 for rights to storage space for radioactive waste at COVRA NV has been added to this item. In prior years, this item was accounted for under “Inventories”.

Intangible fixed assets can be specified as follows: Concession, permits and intellectual property Movements Total 2008 Total 2007Acquisition cost As at 1 January 1.389 134 1.523 1.476Investments 257 1 258 47As at 31 December 1.646 135 1.781 1.523

AmortisationAs at 1 January 0 0 0 0Amortisation for the year -155 0 -155 0As at 31 December -155 0 -155 0

Book valueAs at 1 January 1.389 134 1.523 1.476Investments 257 1 258 47Amortisation for the year -155 0 -155 0As at 31 December 1.491 135 1.626 1.523

Both the costs of intellectual property and the development costs are amortised in 5 years. The costs of the COVRA positions (1.234) are amortised based on the positions used.

1

Tangible fixed assets Land and Industrial Instruments Assets under Total 2008 Total 2007 buildings Installations and and machinery construction Acquisition cost fixturesAs at 1 January 48.037 42.088 51.936 3.595 145.656 141.562Investments 1.817 699 2.958 6.433 11.907 10.657Transfers 343 732 78 -1.153 0 0Disposals 0 0 0 0 0 -6.563As at 31 December 50.197 43.519 54.972 8.875 157.563 145.656

DepreciationAs at 1 January -30.988 -38.336 -45.311 0 -114.635 -116.710Depreciation for the year -2.030 -863 -2.267 0 -5.160 -4.382Disposals 0 0 0 0 0 6.457As at 31 December -33.018 -39.199 -47.578 0 -119.795 -114.635

Book valuePer 1 January 17.049 3.752 6.625 3.595 31.021 24.852Investments 1.817 699 2.958 6.433 11.907 10.657Transfers 343 732 78 -1.153 0 0Disposals 0 0 0 0 0 -106Depreciation for the year -2.030 -863 -2.267 0 -5.160 -4.382As at 31 December 17.179 4.320 7.394 8.875 37.768 31.021

2

66 67

Depreciation is on a straight-line basis using the following periods.• Buildings 20 years• Temporary buildings and site facilities 10 years• Industrial fixtures and fittings 10 years• Instruments, machinery, etc. 5 years• Computer hard- and software 3 years

The land was acquired from Staatsbosbeheer (the Netherlands National Forest Service) under a long-term lease in 1957. The long-term lease theoretically expires in 2031, but is expected to be renewed by 20 years in 2009.

SecuritiesMovements in the portfolio were as follows: 2008 2007Balance as at 1 January 25.190 25.283• Less : Sales -3.857 -696• Less : Reclassification -7.186 0• Add : Purchases 127 995 • Less : Valuation differences -1.821 -12.737 -392 -93

Balance as at 31 December 12.453 25.190

The securities deposit has been pledged to the maximum value of the credit facility extended by ING Bank, for 15.000.The other securities are at the free disposal of ECN. The reclassification regards the book value of 2 bond loans that will be repaid during 2009. Therefore, they have now been included under the current assets.The bond portfolio has a face value of 19.250 (2007: 23.107). The commercial value amounts to 15.734 as at year-end 2008 (2007: 20.279).The commercial value of the share portfolio amounts to 3.859 as at year-end 2008 (2007: 5.594).

Movements in security portfolios by type: Bonds Shares TotalBalance as at 1 January 2008 20.226 4.964 25.190• Less : Sales -3.857 0 -3.857• Add : Purchases 0 127 127• Less : Reclassification -7.186 0 -7.186• Less : Valuation differences -580 -1.241 -1.821

Balance as at 31 December 2008 8.603 3.850 12.453

Other receivablesThis item includes the receivable from Covidien B.V. (formerly Tyco Mallinckrodt B.V.) regarding the payable lease terms for the Molybdeen building. The basis is an investment of 20.000 and a contract for 20 years. The interest was revised in 2006 under a con-tractual provision, based on which the lease price will be valued for the remaining terms (40 quarters).The outstanding receivable as at year-end 2008 was 5.544. In 2009, an amount of 684 will be repaid. This amount is included under current assets.

Movements in ‘Other receivables’ were as follows: 2008 2007Balance as at 1 January 5.544 6.420• Investments 0 347 • Disposals 0 -571 • Transfer to receivables

and prepaid expenses -684 -684 -652 -876

Balance as at 31 December 4.860 5.544

Specification of receivables according to term: < 1 year > 1 yrs. < 5 yrs. > 5 years total• Lease contract Covidien Molybdeen building 684 3.086 1.774 5.544

Financial fixed assetsMovements in the knowledge-based and other participations were as follows: 2008 2007

Balance as at 1 January 615 829• Less : Disposals 0 0 • Less : Included in the consolidation*) -18 0 • Add : Investments 18 714 • Add : Income from participations -559 -559 -928 -214 Balance as at 31 December 56 615*) NRG Nuclear Services B.V. is included in the consolidation effective 2008

Participations in knowledge-based enterprises Business ECN interests address as at year-end 2008 2007 % • Enatec B.V. Zevenaar 12,8 15 15• RGS B.V. Petten 30,0 0 545• Sundye B.V. Petten 100,0 16 16• Aster intellectual properties B.V. Veessen 20,0 0 0• Solsilc development company Trontheim 10,0 1 1• BO2 Energy Concepts B.V. Petten 92,78 12 15

Total as at 31 December 44 592

Other participations Business ECN interest address as at year-end 2008 2007 % • NRG Nucleair Services B.V. *) Arnhem 100,0 0 18• ToN2 B.V. Petten 100,0 12 5• Solar Academy B.V. Petten 100,0 0 0• Sulphcatch B.V. Petten 80,0 0 0

Total as at 31 December 12 23*) formerly DNC Nucleair Technology B.V.; included in the consolidation in 2008)

3

68 69

CURRENT ASSETS

Work in progress 2008 2007Work in progress 16.332 17.105Provision for work in progress* -948 -1.813

Balance as at 31 December 15.384 15.292*) This provision is included in the balance sheet under ‘Other provisions’.

Receivables and prepaid expensesThe receivables have been included at amortised cost, which may be equal to the face value, exclusive of provisions required. They expire within 1 year and are broken down as follows: 2008 2007Trade debtors 11.686 17.609Receivables from participations 569 495Other receivables 13.007 5.164

Balance as at 31 December 25.262 23.268

The decrease in accounts receivable is primarily due to the inclusion in the 2007 figures of a 5.727 receivable from the European Commission regarding the operation of the HFR. The other receivables include an item of 7.186, being 2 bonds that will be repaid in 2009.Movements in the total bad debt provision were as follows: 2008 2007Balance as at 1 January 398 220• Add : Addition 15 297• Less : Withdrawal -158 -15• Less : Release -50 -104

Balance as at 31 December 205 398

Cash and cash equivalentsCash is freely disposable, with the exception of 31.955 (see specification below). The bonds are pledged to the maximum value of the credit facility extended by ING Bank, which is 15.000. A credit facility of 4.500 is available at ABN AMRO, for which no security has been provided.

2008 2007Cash 7 5 ABN AMRO 19.093 21.927ING / Postbank 52.239 47.952

Balance as at 31 December 71.339 69.884

Not freely disposable:• ING Escrow account 25.690 24.626• ING 6th and 7th framework accounts 3.474 3.037• Sale and lease back obligation WEF BV 2.791 1.638

Total 31.955 29.301

Group equityReference is made to the notes on equity in the statutory financial statements.

ProvisionsThe provisions below mostly are long term.

2008 2007Provision for redundancy costs 8 130 390Provision for pension indexation 9 11.573 12.927Provision for compensation upon commencement of retirement 10 2.266 2.419Provision for Job-Related Discharge Regulation (RBF) 11 1.351 2.056Provision for long service awards 12 1.036 1.084Provision for radioactive waste 13 67.715 64.632Other provisions: • major maintenance 14 2.815 3.258 • WIP 15 948 1.813 • Miscellaneous 15 1.965 2.038

Total 8 - 15 89.799 90.617

Provision for redundancy costsThis provision was formed to cover costs of staff redundancies ensuing from reorganizati-ons. As in previous years, the annual interest addition was based on 5%.

Movements in this provision were as follows: 2008 2007Balance as at 1 January 390 736• Less : withdrawal -210 -337• Less : release -61 -44• Add : addition of interest 11 -260 35 -346

Balance as at 31 December 130 390

Provision for pension indexationThe (paid up) pension entitlements, accrued up to year-end 2006 by both active participants and former participants were deposited with Centraal Beheer Achmea (CBA), and will remain insured by the latter. Effectively, the pension obligation as presented has the character of “contributions to be paid to CBA”; this means it is not a self-administered pension obligation. With the exception of the pension rights based on the pension rules of 1964 (the pension rights with a fixed 3% annual increase), ECN and NRG will annually index the aforementioned pension rights. The indexation will be financed separately from the new pension regulation at ABP. The pension regulation aims at indexation at price index level, but is limited to what can be achieved in any year with the disposable financial resources. For this reason, the indexation provisions in the various pension schemes have been amended (unilaterally). This indexation method is applied to achieve a near market-level result within the limited financial means.

To finance the indexation, the following financing is available, and/or ECN/NRG will make the following financing available as from 2007:• For a period of 10 years, ECN/NRG will pay a fixed amount of 2 million into the deposit

each year.• For a period of 10 years, a preferential allocation of the result of 1 million will be paid into the

deposit each year. This allocation is conditional to sufficient positive result. If the positive result is smaller than 1 million, the full amount of the result will be transferred to the deposit.

• For a period of 10 years, 1/3 of a positive result between 1 and 4 million will be paid into to the deposit each year. This payment is conditional to the result being more than 1 million.

• For a period of 10 years, a payment of half of the positive result above 4 million will be paid to into the deposit each year. This payment is conditional to the result being more than 4 million.

• Result is defined as net consolidated result after taxes. Based on a discounted cash flow analysis, at 5% interest, 16,2 million was provided for at consolidated level in 2006 for the fixed annual payment of 2 million. The obligation for 2009 has been stated under current liabilities.

Movements in this provision were as follows: 2008 2007Balance as at 1 January 12.927 14.215• Less : reclassification -2.079 -2.000 • Less : release 0 0 • Add : addition 0 0 • Add : addition of interest 725 -1.354 712 -1.288

Balance as at 31 December 11.573 12.927

The reclassification of 2.079 relates to transfer of the current portion to current liabilities at year-end 2008. Interest at 5% has been added to the provision to enable adjustment to the future price level. In 2008, 3.513 at consolidated level was transferred to Centraal Beheer Achmea for the indexation. This enabled an indexation of 1,115 per cent. This amount of 3.513 includes 2.000 in defined contributions and an advance payment on the performance-linked payment for 2007 of 1 million. An advance payment of 1.000 was already made in 2007.

Provision for compensation on commencement of retirement Article 24, paragraph 7 of the transitional regulation as included in the pension regulation 1999 on the compensation on commencement of retirement continues to be effective. This com-pensation is based on a graduated scale linked to the years 2000 up to and including 2018 and generates 3 monthly salaries in 2000 to 1,25 monthly salaries in 2018 on commencement of retirement. Under the same tax limitations applying to anniversary and redundancy disburse-ments, this compensation is paid to employees who retire directly after employment.

2008 2007Balance as at 1 January 2.419 2.306• Less : withdrawal -267 -381• Less : release 0 0• Add : addition 0 379• Add : addition of interest 114 -153 115 113

Balance as at 31 December 2.266 2.419

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7

8

9

10

5

6

70 71

Provision for Job-Related Discharge Regulation (RBF) (formerly: FLO)Employees working in shifts were entitled to early retirement under the regulation on job-related discharge from service dictated by age (FLO) as from the age of 57.5. Due to changes in law, this regulation was no longer permitted as of 2006. A new regulation was agreed in consultation with the respective employees in 2006. This regulation became effective on 1 January 2007. Under the new Job-Related Discharge Regulation (Regeling Bezwarende Functies) a personal budget is granted for years of service in a strenuous job. With this budget, employees can accrue life-cycle savings under a life-cycle savings regulation, which can be withdrawn to finance life-cycle leave prior to the pensionable age. In addition, a transitional regulation has been provided for current employees. Under the transitional regulation, a personal budget is granted afterwards for years of service in a strenuous job until 2006. On top of this, the regulation provides for additional compensation in the form of extra leave entitlements per age cohort. A provision has been included in connection with this regulation. This provision is based on the assumption that the tax administration will consider parts of the transitional regulation inadmissible under tax law and impose penalties with respect to the leave entitlements granted of 26 per cent and 52 per cent, respectively.

The withdrawal from this provision consists of two parts: payments to the existing group of beneficiaries under the former FLO regulation, and payments to the present employees in the form of personal budgets under the new RBF regulation. Payments relating to the personal budgets were charged to the provision. Also the costs incurred for the existing beneficiaries during the year under review under the old FLO regulation were charged to the provision.

Movements in this provision were as follows: 2008 2007Balance as at 1 January 2.056 4.564• Less : withdrawal -728 -3.388 • Add : addition 0 844 • Add : addition of interest 23 -705 36 -2.508

Balance as at 31 December 1.351 2.056

Provision for long service awardsThis provision is formed for payment of future long service awards. Movements in this provision were as follows: 2008 2007Balance as at 1 January 1.084 1.048• Less : withdrawal -165 -24 • Add : addition 62 24 • Add : addition of interest 55 -48 36 36

Balance as at 31 December 1.036 1.084

The provision was revised at year-end 2008 based on the following principles:• The payroll as at 31-12-2008 and a retention rate of 74%;• addition of interest of 5% annually;• annual inflation of 2%.

Provision for radioactive wasteThis provision is intended for the costs of future treatment and storage of radioactive waste.

Movements in this provision were as follows: 2008 2007Balance as at 1 January 64.632 56.499• Less : withdrawal -2.990 -1.896• Add : addition 1.844 2.665• Add : third-party contributions 0 4.500 • Add : capitalised

decontamination commitment 1.000 0 • Add : addition of interest 3.229 3.083 2.864 8.133

Balance as at 31 December 67.715 64.632

In 2008, 2.990 was withdrawn from the provision. This largely regards costs incurred for the preparation of processing historic waste and the costs for decontaminating radiolo-gical laboratories. An additional 2.844 was credited to the provision. The main additions are the following: An amount of 1.063 has been added to cover higher costs of engineering for the design of a facility for splitting and packaging high and low radioactive waste in preparation of the transport to COVRA. Moreover, 1.000 has been added for the expected decontami-nation costs for a building at NRG.

Provision for major maintenanceMovements in this provision were as follows: 2008 2007Balance as at 1 January 3.258 3.319• Less : withdrawal -1.984 -1.261• Less : release 0 0• Add : addition 1.541 -443 1.200 -61

Balance as at 31 december 2.815 3.258

The provision for major maintenance serves to equalise the maintenance costs of the building over the years, based on an LT maintenance plan. In the past years, a backlog on this maintenance plan arose. Based on the findings of a report issued by DGV/TEMID in 2006 following a survey of overdue maintenance and (major) maintenance to be performed over a period of 10 years, the provision formed was revised critically. At year-end 2008, the provision was revised based on the data up to and including 2018 and this resulted in an extra addition of 1.541.

Provision for work in progress and other provisionsThe provision for work in progress serves to correct the value of the Work in progress account and to cover a possible risk of budget overruns of projects in progress. The item ‘Other provisions’ includes the provisions for ‘Renovation of Lead Cells’, ‘DWT sludge storage’ and other provisions. The provision for cleaning and maintenance of lead cells was formed for the lead cells in the Hot Cell Laboratories (HCL). The provision has the character of a provision for repair costs and is based on historical figures relating to the cleaning costs per cell. No fixed date has been set for the cleaning of the lead cells. The sludge basin contains 440 bar-rels of sludge from the waste treatment plant. Up to and including 2003, it was expected that these barrels could be processed in the near future. However, the currently available capacity is insufficient to process sludge from prior years. The part whose processing and transport has been delayed for several years has been accounted for under long-term provisions. At the current price level, transport to the COVRA would cost 582.

Other provisions: Work in Lead cells Storage DWT Other Total Progress 2008 sludge 2008 Balance as at 1 January 1.813 545 544 949 2.038• Less : withdrawal -865 -86 0 0 -86• Add : addition 0 0 38 344 382• Add : addition of interest 0 0 0 0 0• Less : release 0 0 0 -369 -369

Balance as at 31 December 948 459 582 924 1.965

Other provisionsThe item “other provisions; miscellaneous”, includes a provision for a correction of proceeds EU (KP6) projects in the amount of 830, regarding the years 2004 - 2008. The correction is the result of a request by the European Commission to test the claims for 61 projects against conflicts with the regulations of these framework programs, detected during an audit as at year-end 2007/early 2008 and, if necessary, to revise the claims.

Current liabilitiesCurrent liabilities are specified as follows: 2008 20071. Prepayments from third parties 34.098 26.3732. Accounts payable related to deliveries

and services from third parties 12.613 10.0813. Taxes and social security contributions

• Corporate income tax 245 157• VAT 0 2• Wage tax 2.768 2.813• Pension charges 4.905 16.973

4. Other social security charges and personnel costs • Other personnel costs 1.040 1.813• Reservation for holiday allowance and leave balances 7.503 6.714

5. Other liabilities and accrued expenses • Funds advanced for 6th framework accounts 3.474 3.037• Miscellaneous liabilities 2.353 2.535• Payable to co-contractors of projects 5.438 5.843

Balance as at 31 December 74.437 76.341

Current liabilities are settled within one financial year.

The main reason for the increase of the item “Prepayments by third parties” regards prepaid contributions of the Ministry of Economic Affairs for the High Flux Reactor (“HFR”). An amount of 3.000 has been received for an advance in respect of the addition to the Supplementary Program (“SP”). Said amount forms part of a commitment of 4.000 in the aggregate, of which 1.000 has been recognised in the 2008 result. Because an “SP” no longer existed as at year-end 2008, the Ministry of Economic Affairs, which had included the contribution to this “SP” for 2008 in the budget, has granted this contribution to NRG as a bridging finance facility. Of this 8.112 bridging finance facility 5.656 has been recogni-sed in the 2008 result. The remainder has been included on the balance sheet as prepaid contribution. Both items of the Ministry of Economic Affairs have been granted subject to the condition that an “SP” will materialise prior to 1 May 2009.

Financial instrumentsFor the notes to the primary financial instruments reference is made to the specific item by item notes. As at balance sheet date, ECN and its subsidiaries did not own financial derivatives. Below, the risks relating to financial instruments are explained.

• Currency exchange risks For most transactions with suppliers and buyers, ECN and subsidiaries apply the euro

as payment currency. As a result, the currency exchange risk of ECN and its subsidi-aries is limited to an insignificant number of transactions outside the eurozone.

• Interest risks The main interest risk that ECN runs at a consolidated level is a difference between

proceeds of investments and cash versus the required additions of interest to provisi-ons. Through active asset management we try to mitigate this risk as much as possible.

• Credit risks These are reduced as much as possible by doing business with third parties that have

a good creditworthiness and an active debtor management.

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Off-balance sheet commitments

Obligationsa) As a partner to the partnership firm NRG, Stichting ECN is jointly and severally liable

for the debts of this firm. In addition, as a wholly owned subsidiary of ECN, ECN Wind Energy Facilities B.V. is jointly and severally liable for the debts in its capacity of managing partner of ECN Windturbine Testpark Wieringermeer C.V.

b) In 2004, ECN received funds from the Ministry of Economic Affairs totalling over 15.800 and in 2006, it received an amount of 8.100 from the Ministry. Both payments served to defray the costs of work related to the disposal of radioactive waste. If due to circumstances, ECN is not able to perform the work itself, or commission the work to third parties under its supervision, it is obliged to repay the non-disbursed amount to the Ministry of Economic Affairs. The payments from the Escrow account that has been opened for this purpose may be solely be remitted, if the payment orders are signed by both parties (the Ministry of Economic Affairs and ECN).

c) The site was acquired in 1957 under a long-term lease from Staatsbosbeheer. In 2003, an application was prepared for an extension up to 2051. This application, however, was suspended and it is now expected to be followed up in 2009. On 1 January 2006, the annual ground rent was set at 204 per year and it will be indexed again based on the development of the consumer price index, all households series.

d) During the financial year 2003, ECN Windturbine Testpark Wieringermeer CV, wholly-owned by Wind Energy Facilities BV, itself a wholly-owned subsidiary of ECN, entered into a sale and lease-back agreement to finance a wind turbine testing field in which large wind turbines will be tested for offshore locations. The ensuing annual lease commitment is 1.632 from 2004 to 2012 (see also under f).

e) On 5 July 2007, ECN and NRG were summoned by the Association of Ex-Employees of ENC & NRG (OMEN). OMEN has applied for a declaratory judgement that ECN et. al. did not have the power to change the indexation provisions in the pension schemes rela-ting to the former employees of ECN. In 2006, the indexation provisions were changed for both active and non-active persons and indexation was made conditional following a previous court decision in which these provisions were regarded unconditional. The court decision could result in a financial emergency for ECN/NRG, since unconditional indexation under the applicable accounting principles requires recognition of a very sub-stantial expense. On 16 July 2008, the judge pronounced an interlocutory judgement. OMEN has lodged an appeal against this interlocutory judgement. OMEN’s main objec-tion against this interlocutory judgement focuses on the judgement of the court that in the event of significantly changed financial circumstances ECN and NRG would have had the authority towards their former employees to unilaterally change the pension plans as at 1 January 2007. This appeal is expected to take quite some time.

f) Specification of contractual commitments entered into:

Description < 1 year > 1 yr < 5 yrs > 5 yearRent for premises in Arnhem(NRG)/Amsterdam(ECN) 657 539 0 Lease of cars 191 195 0 NIB WEF lease commitment 1.632 4.895 0 ECN/WEF scale park lease 180 720 0 Repro services 180 180 0 Cleaning services 370 370 0 Capital expenditure commitments Building 31 750 0 0 Security 741 1.500 0

4.701 8.399 0

g) In response to an announced possible examination into to the extent in which ECN fulfils the concept of ‘entrepreneur’ within the meaning of the Turnover Tax Act, ECN is still convinced that it can fully qualify as entrepreneur. As yet no written confirmation about this assumed position has been received from the tax administration.

h) ECN has entered into a joint venture agreement with DHI Water and Environment and VanderBilt University for the development of LeachXS, a software application for reviewing the lixiviation behaviour of materials, residues and waste. Since 2008, this system has been applied in a project financed by US-DOE, while other projects have been entered into with industrial parties. On top of that a more freely accessible version (LeachXS Lite) will be developed, creating options to more specifically anticipate parties’ needs. A further expan-sion of users and applications is expected for 2009.

i) The item ‘miscellaneous’ in ‘other provisions’ includes a reserve of 830 for the financial con-sequences of the revised claims with the European Union (EU), including an estimate of the impact on projects in 2008. The revised claims for the period of 2004-2007 were filed with the EU in March 2009. As yet we have no certainty that the basic assumptions currently applied will be accepted by the European Commission.

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Bank guarantees providedAs at the balance sheet date, ECN had provided bank guarantees for an aggregate amount of 1.411 through ABN AMRO and ING. These bank guarantees have been provided prima-rily at the request of the EU for the KP6/KP7 projects.

Transactions with affiliated partiesDuring 2008, the possibility granted to NRG to conclude one or several subordinated loan(s) from ECN / ECN Nucleair B.V. to reinforce its equity and the cash flow positions was cancelled.

ECN and NRG perform work one for the other. These transactions are eliminated in the consolidated accounts and relate to services by ECN arising from a joint use of accom-modation, infrastructure (networks and telephone), security, accounting services and other services. NRG on the other hand, performs services in the area of decontamination of buildings and similar services. Fees and fixed rates are agreed per year and documented. In the financial year, the following transactions were effected between affiliated parties:

Between ECN and NRG for a total amount of 10.674 (2007: 9.629) • Transactions primarily relating to the charging-on of the joint use of infrastructure

(6.580 / 2007: 6.393), services from the E&S unit after directly placed orders (1.111/ 2007: 1.132), share in corporate staff services (1.094 / 2007: 911), share in project facilities (1.671 / 2007: 929), and orders placed directly by NRG (212 / 2007: 264).

• Transactions between ECN and WEF BV primarily relate to the costs of engaging managers for WEF and ECN and total 935 in 2008 (2007: 832).

• Transactions between ECN and SunLab relate primarily to the charging-on of the costs of joint use of infrastructure. In 2008, these costs totalled 196 (2007: 144).

• No transactions are concluded between ECN and Stichting EMVT• Transactions between ECN and Stichting Kenniscentrum Windturbine Materialen en

Constructies (WMC) primarily relate to supporting activities of management and the costs of seconding employees for specific projects and total 99 in 2008.

• Transactions between ECN and Solar Academy B.V. relate to support services for completing the fitting out of Solar Academy B.V. and amount to 47 for 2008.

Costs are charged on at the generally applicable rates for internal cost allocation within ECN.

At the end of the financial year, ECN had the following receivables from affiliated parties:between ECN and NRG: a total of 8.698 (2007: 7.198) • between ECN and WEF: a total of 113 (2007: 70).• between ECN and SunLab B.V.: a total of 51 (2007: 45).• between ECN and WMC: a total of 19 (2007: 45).• between ECN and Solar Academy B.V.: a total of 171 (2007: n.a.)

Notes to the consolidated statement of income

Operating income

Financing by the State of the Netherlands 2008 2007• Basic, Engine and Knowledge financing 13.612 13.708• Program and Cooperation financing 31.331 28.433

Total 44.943 42.141

The financing from the Ministry of Economic Affairs comprises subsidies from the Ministry of Economic Affairs, the Ministry of Housing, and the Ministry of Spatial Planning and the Environment granted in 2007. These subsidies are recognized in the financial year for which they were granted. The firm has to prove every year that the funds were spent lawfully. Based on the assessment of the respective ministries, part of the subsidies that have been granted may be deducted from future subsidies.The income received include the EZS funds received by NRG, totalling 9.362, the Knowledge and Program Financing received by ECN based on agreements made in 2005, totalling 33.182, and the funds received from the Ministry of Housing, Spatial Planning and the Environment (VROM) totalling 2.399 (2007: 2.578).

Assignments and other funds 2008 2007Third-party assignments 74.698 72.930Increase / decrease in work in progress -773 2.947 Provision for WIP 948 1.813 175 4.760Total 74.873 77.690

Third-party assignments include income from 100% third-party assignments, or the part performed by third-parties of joint assignments under partnership agreements. Third parties include the assignments commissioned by SenterNovem on behalf of the Ministry of Economic Affairs, assignments commissioned by the EU and other such assignments.

Specification of third-party assignments, including increase / decrease in work in progress, by client: 2008 2007Domestic trade and industry sector 25.587 27.758Domestic energy sector 1.533 2.567European Commission 19.601 19.520Foreign trade and industry sector 15.181 14.048Government agencies 3.922 2.564Technological institutes 1.713 1.698SenterNovem 7.336 9.535

Total 74.873 77.690

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Financial income and expenses 2008 2007

• Interest receivable and related income 3.388 3.080• Interest payable and related costs -6.400 -5.063

Total -3.012 -1.983

Interest receivable and related income 2008 2007Interest payments bonds 586 736Interest payments current account bank/giro 2.068 1.555Result on sale of bonds 0 93Other interest income 734 696

3.388 3.080

Interest payable and related costs 2008 2007Interest payable current account bank / giro 58 212Addition of interest provision for redundancy costs 11 35Addition of interest provision for radioactive waste 3.229 2.864Addition of interest provision for severance pay 114 115Addition of interest provision for long service awards 55 36Addition of interest provision Job-related Discharge Regulation 23 36Additional transitional law retirement regulation 725 712Impairment of securities 1.821 368Other interest payable 364 685

6.400 5.063

TaxesThe nominal tax rate in 2008 was 20% over profits up to 275 and 25,5% over higher profits (2007: 25,5%). The effective tax rate is 27,5% (2007: 15,0%). The difference between the nominal and effective tax burden arises from the exemption of corporate income tax applicable to ECN. The reported tax burden concerns the activities of ECN Wind Energy Facilities BV and SunLab BV.

Company balance sheet ECN – assets (x € 1.000)(before appropriation of profit) ASSETS Clarification 31-12-08 31-12-07

Fixed assetsIntangible fixed assets 257 0Tangible fixed assets 28.180 22.588Financial fixed assets:• Participations in group companies 26 10.430 10.603• Other participations 56 597• Securities 12.453 25.190• Other receivables 4.860 5.544Total financial fixed assets 27.799 41.934Total fixed assets 56.236 64.522

Current assetsWork in progress 12.204 10.987Receivables from group companies 7.302 6.398Receivables from other participations 569 495Trade debtors 7.571 6.683Inventories 233 210Other receivables and prepayments 12.019 4.433 39.898 29.206

Cash and cash equivalents 33.582 42.699

TOTAL 129.716 136.427

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Capitalised corporate productionCapitalized corporate production comprises operating expenses for work carried out by the company’s own staff and with its own operating assets, credited or debited to investments or provisions. 2008 2007Movable assets 774 323Immovable assets 686 212Provision for radioactive waste 2.303 1.476Major maintenance and other provisions 476 340

4.239 2.351

Other operating incomeOther operating income includes the income from the lease of the Molybdeen facility. This item progresses parallel with the depreciation on this facility in accordance with ECN’s accounting method. The difference between the charges to Covidien B.V. based on an annuities calculation (146), and the depreciation determined according to the straight-line method (19), is reported under financial fixed assets. This item also includes the proceeds of WEF from income received from the lease of prototypes and the re-delivery of energy to the public grid of Eneco plus the MEP subsidy via Enerq.

2008 2007• Royalties 1.102 743• Energy supply to Eneco and Enerq 4.696 5.136• Lease of prototypes 716 614• Rental income from lease contract with Covidien 147 146• Final settlement Ministry of Economic Affairs through 2005 0 1.992• Other 1.325 1.170

7.986 9.801

Operating expenses

Wages and salaries, social security and pension charges 2008 2007 1. Permanent employment

contract 46.743 44.4602. Other personnel charges 11.507 10.741 58.250 55.2013. Social security contributions 3.305 2.0614. Pension charges 7.294 11.316

Total 68.849 68.578 Average number of employees (FTEs): 2008 2007• Permanent employment contracts 747,7 727,7• Temporary employment contracts

(including doctoral students) 155,8 124,6

Financial year total average 903,5 852,3

The figures reported above do not include temporary employees through staffing agencies.

Depreciation of tangible fixed assetsThis item is specified as follows: 2008 2007• Buildings, installations, fixtures 2.893 2.570 and site facilities• Instruments and other inventory 2.267 1.812

Total 5.160 4.382

Other operating expensesThis comprises: 2008 2007• Projects 28.669 30.391• Cost centers 18.116 14.556• Staffing agency workers and seconded employees 4.106 3.979• Movement and release bad debt provision -35 183• Addition provision for major maintenance 1.541 1.200• Movement provision for radioactive waste 1.844 2.665• Release remaining provisions -596 5

53.645 52.979Specification audit fee:This item can be specified as follows: 2008 2007• Financial statement audit 142 236• Other audit engagements 257 177

399 413

During 2008, ECN faced an increase in audit fee due to an increase in the number of project audits (recalculation KP6 EU projects).

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Notes to the company financial statements of ECNThe statutory financial statements have been prepared in accordance with the provisions in Title 9, Book 2, of the Netherlands Civil Code.

Accounting principlesThe statutory financial statements have been prepared based on the accounting princi-ples disclosed in the notes to the consolidated financial statements.

Participations in group companies Movements in participations are as follows: 2008 2007 Balance as at 1 January 10.603 8.325Add : Income from participations 2.244 3.315Less : Dividends / payments received -2.417 -1.037

Balance as at 31 December 10.430 10.603

Equity

Signing of the financial statements 2008

Petten, 28 April 2009

Supervisory Board: Stichting Energieonderzoek Centrum Nederland

Prof. dr. R.F.M. Lubbers Dr. A.B.M. Hoff(Chairman of the Supervisory Board) (Chairman of the Board of Directors of ECN))

H.A.D. van den BoogaardDr. C.P. JongenburgerProf. dr. W.C. TurkenburgDr. ir. A. W. VeenmanDrs. G.H.B. Verberg

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Company balance sheet ECN – liabilities (x € 1.000)(before appropriation of profit) EQUITY AND LIABILITIES Clarification 31-12-08 31-12-07

EQUITY 27 Foundation capital 45 45Statutory reserves 135 561Other reserves 11.146 8.206Retained earnings 0 2.514 11.326 11.326

Provisions Provision for redundancy costs 130 390Provision for radioactive waste 61.854 60.074Provision for pension indexation 9.529 10.644Provision for compensation on commencement of retirement 2.266 2.419Provision for Job-Related Discharge Regulation (RBF) 349 458Provision for long service awards 664 751Provision for major maintenance on buildings 2.815 3.258Provision for work in progress 443 559Other provisions 924 949 78.974 79.502

Current liabilitiesAccounts payable 6.120 4.994Debts to group companies 1.219 1.748Taxes and social security contributions 1.826 1.678Prepayments from third parties 15.196 15.728Pension liabilities 3.766 11.325Other social security charges and personnel costs 5.324 5.234Other liabilities and accrued expenses 3.635 3.662 37.086 44.369

Debts to credit institutions 2.330 1.230

TOTAL 129.716 136.427

Company statement of income ECN (x € 1.000)

2008 2007 Operating income:Income• Funds from the State of the Netherlands 35.581 32.805• Assignments and other funds 31.862 29.655• Increase / decrease in work in progress 1.217 1.667• Income at group companies 9.387 9.008

78.047 73.135

Capitalised corporate production 4.064 2.350Other operating income 1.401 2.975

Total operating income 83.512 78.460

Operating expenses:Personnel costs: Wages 38.322 35.913 Social security charges 2.117 1.240 Pension charges 4.853 7.718Depreciation 3.800 3.555Other operating expenses 29.614 25.942Outsourcing to group companies 2.418 1.597

Total operating expenses 81.124 75.965

Operating result 2.388 2.495

Financial income and expenses -4.073 -2.368

Profit on ordinary operations before taxation -1.685 127

Taxation on result from ordinary operations 0 0

Profit on ordinary operations after taxation -1.685 127

Income from participations 1.685 2.387

Net result 0 2.514

Foundation Statutory Other Retained Total capital reserves reserves earnings equityBalance as at 1 January 2007 45 779 8.933 -945 8.812Allocation of 2006 result 0 0 -945 945 0Result after taxation 2007 0 0 0 2.514 2.514Composition of statutory reserve for participations 0 -218 218 0 0Balance as at 31 December 2007 45 561 8.206 2.514 11.326

Allocation of 2007 result 0 0 2.514 -2.514 0Composition of statutory reserve for participations 0 -426 426 0 0Result after taxation 2008 0 0 0 0 0Balance as at 31 December 2008 45 135 11.146 0 11.326

The statutory reserve is a reserve for ‘unallocated result of participations’.

Remuneration of (former) directors and Supervisory Board members 2008 2007Remuneration of directors, including pension charges 321 316Remuneration of Supervisory Board members 59 65

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COLOPHONPublished by: Energy Research Centre of the Netherlands

Text: Meno Jelgersma, Monique Tesselaar, Frans Stravers

Editors: Frans Stravers, Nico Wittebrood

Artwork & Graphic Design: Made in Haarlem

Printed by: RICOH

Portrait Photography: René Koster

Pictures:Stock.xchng, iStock, ECN-archive, Annebeth Leurs,Florentine de Maar

Other information

Auditor’s reportReference is made to the auditor’s report included on the right side.

Provisions in the Articles of Association regarding allocation of the resultAs generating a profit is not the primary aim of the Stichting Energieonderzoek Centrum Nederland, no provisions on profit appropriation have been included in the Articles of Association. The result realised in any financial year is therefore added to the other reser-ves of the Stichting.

Allocation of the result for the financial year 2007The 2007 financial statements were adopted by the Supervisory Board on 18 March 2008. The Supervisory Board determined the allocation of the result in accordance with the proposal.

Allocation of the result for the financial year 2008The result for the financial year 2008 is nil.

Post balance sheet eventsNo relevant material post balance sheet events have occurred.

Auditor’s report

Report on the financial statementsWe have audited the accompanying financial statements 2008 of Stichting Energieonderzoek Centrum Nederland, Petten, which comprise the consolidated and company balance sheet as at 31 December 2008, the consolidated and company profit and loss account for the year then ended and the notes.

Management’s responsibilityManagement is responsible for the preparation and fair presentation of the financial state-ments and for the preparation of the Director’s report, both in accordance with Part 9 of Book 2 of the Netherlands Civil Code. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with Dutch law. This law requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and dis-closures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonable-ness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements give a true and fair view of the financial position of Stichting Energieonderzoek Centrum Nederland as at 31 December 2008 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Netherlands Civil Code.

Report on other legal and regulatory requirements

Pursuant to the legal requirement under 2:393 sub 5 part f of the Netherlands Civil Code, we report, to the extent of our competence, that the Director’s report is consistent with the financial statements as required by 2:391 sub 4 of the Netherlands Civil Code.

Utrecht, the Netherlands, 28 April 2009, Deloitte Accountants B.V.drs. A.J. Heitink RA

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