Impulse for sustainable energy
Land-based wind farms, solar energy, biogas production, small-scale biomass with the exception of liquid biomass and combined heat and power (CHP) are the categories which may be eligible for subsidies via the Stimuleringsregeling Duurzame Energie (SDE) [Sustainable Energy Incentive Scheme], which is expected to take effect as of 1 April 2008.
Minister of Economic Affairs Maria van der Hoeven announced the expected subsidy rates per category in a letter she sent to the Lower House accompanied by three ministerial decrees. These rates are based on an estimate of the development of the electricity and/or gas prices and can be adjusted on the basis of the actual development of said prices. This allows a flexible response to market developments and avoids oversubsidisation.
The subsidy rates are:
- Land-based wind power: 2.8 eurocents per kilowatt hour (kWh).
- Small-scale solar photo voltaic installations: 33 eurocents per kWh
- Biogas production: 7 eurocents per cubic metre.
- Combustion of solid biomass, composting of kitchen and garden waste and co-fermentation of sewage sludge: 5.3 eurocents per kWh.
The level of the subsidy rates is derived from the uneconomic ceiling determined by ECN, that is the difference in cost price between fossil and this sustainable energy production. As far as CHP is concerned, the uneconomic ceiling still has to be determined. No uneconomic ceiling for 2008 has been provided for a number of categories in the field of biomass combustion. As a result, the subsidy rate has been set to zero for the time being.
In her letter to the Lower House, Minister Van der Hoeven substantiates her decision to opt for these subsidy-eligible categories on the basis of three criteria, namely cost effectiveness, future prospects and innovativeness.
A lot is currently being staked on the most cost-effective option of land-based wind power. This year, new wind power equivalent to 500 Megawatt (Mw) is to be made eligible for subsidy. This corresponds to at least 200 to 300 new wind turbines.
This is an important step on the way to reaching the objective of 2,000 Mw of new land-based wind capacity during this cabinet period, as referred to in the Schoon en Zuinig [Clean and Efficient] work programme.
Solar photo voltaic power and offshore wind farms score high as regards future prospects and innovative capacity. In 2008, there is to be a 10 Mw incentive for solar photo voltaic power. The idea is to initiate the process of learning through implementation. The 10 Mw capacity corresponds to approximately 5,000 to 10,000 solar energy systems on homes per year, consisting of several dozen solar panels per roof (home). This is sufficient for approximately half the electricity consumption per home.
In the case of offshore wind farms, the objective is 450 Mw extra power during this cabinet period. Agreements have been made which will enable new licences to be granted for offshore wind farms in 2009. For this reason, the offshore wind farms category has not yet been opened up for this year, although this is going to happen for 2009.
As regards biomass options, the discussion on sustainability plays an important role. Due to the fact that no sufficiently developed certification system yet exists, Minister Van der Hoeven has opted to exclude liquid biomass.
As the Minister already pointed out in a letter to the Lower House dated November last year, the resources available for the SDE are going to increase from 10 million euro in 2008 to 336 million structurally in 2014. In total, the budget for this period is almost 1.4 billion euro. In view of the system on which the scheme is based, with the priority being long-term certainty for potential investors, spending of this amount will be lowest on a cash basis during the first few years. The SDE imposes subsidy ceilings on each category. The subsidy ceilings are also going to be higher than the amounts available each year.
Subsidy requests which fulfil the criteria are to be processed in the order in which they are received. The ministerial decrees are going to be published in their definitive form in March in the Government Gazette. SenterNovem is going to implement the SDE.